Demand is moving in ways you can’t forecast, and tariffs keep repricing your inputs overnight. Fixed headcount has become the riskiest bet on the plant floor. Here’s how flexible labor hedges both.
Key takeaways:
- GLP-1 medications are cutting how much households buy, softening your demand. And 2025 tariffs pushed food prices up 2.8%, spiking your costs.
- Fixed full-time headcount turns that uncertainty into un-hedged risk. Every permanent hire is a bet on a demand curve that won’t sit still.
- Contingent labor lets you flex output without slowing lines or carrying severance exposure. Federal jobs data shows manufacturers already making the move.
The demand signal you can’t forecast anymore
Your volume forecast has a new variable, and it’s pharmaceutical. GLP-1 drugs like Ozempic, Wegovy, and Zepbound suppress appetite, and the people taking them are buying less food.
Within six months of starting a GLP-1, households cut grocery spending by an average of 5.3%. Higher-income households cut more than 8%. Savory snacks dropped about 10%, with similar declines in sweets, baked goods, and cookies.
And the trend is already mainstream. Circana reported in November 2025 that 23% of US households already use GLP-1s, and it projects those households will account for 35% of US food and beverage units sold by 2030. J.P. Morgan Global Research projected an annual revenue reduction of $30 to $55 billion for the food and beverage industry by 2030 to 2034.
But planning for these changes is difficult. OC&C Strategy Consultants calls GLP-1s a structural volume drag of roughly 0.2% per year through 2031, but the effect swings by category and by whether users stay on the drugs. Protein, yogurt, and fresh produce are gaining, while indulgent SKUs are losing. So demand is moving between categories, not simply falling, and that’s harder to forecast.
Tariffs turned cost planning into guesswork
In addition, trade policy moved faster than most annual budgets could absorb.
The average US tariff rate rose from 2.6% to 13% over 2025, and about 90% of that cost fell on US firms and consumers, not foreign exporters. For food specifically, The Budget Lab at Yale found 2025 tariff actions raised food prices 2.8%, with fresh produce up 4.0%.
Packaging got hit directly. The Can Manufacturers Institute reported that the steel tariff doubled from 25% to 50% in 2025, and domestic can makers import roughly 80% of their tin mill steel because US production capacity has fallen 75% since 2018. When the input tariff changes mid-year, so does the cost of every can on your line.
Combine those two forces, and you’re staffing a plant where demand is drifting down in some categories and up in others, while your input costs reprice on policy timelines you don’t control.
Why fixed headcount is now your riskiest line item
A permanent hire is a fixed cost you commit to for years, priced against a demand forecast you can no longer trust.
When volume drops, that cost doesn’t. You carry it, or you run layoffs and eat the severance, the morale hit, and the rehiring bill when demand rebounds. And you can’t quietly right-size through attrition, because people aren’t leaving. The quits rate in nondurable goods manufacturing, which includes food and beverage, sat at just 1.6% in May 2026. Low turnover is usually good news. In a volatile-demand environment, it also means your headcount stays stuck at whatever level you set it.
So the cost of guessing wrong runs both directions. Overstaff, and you’re paying for output you can’t sell. Understaff, and you’re leaving lines short when a category spikes. Neither is a place you want to be locked into.
The shift is already in the data
Manufacturers aren’t waiting for certainty. They’re building flexibility into the workforce itself, and the federal numbers caught it.
Nondurable goods manufacturing payrolls have been falling for months (-11,000 in May 2026), according to the Bureau of Labor Statistics, while temporary help services added 9,000 in June. So the strategy is to shed fixed headcount and add flexible capacity. The staffing infrastructure to support it is large and mature. The American Staffing Association reports that staffing firms placed about 2.2 million temporary and contract workers per week in 2024, and industrial work is the single largest segment at 36% of all staffing employees.
How to build the hedge without slowing lines
Flexibility only works if quality and throughput hold. The goal isn’t a revolving door. It’s a deliberate mix.
Start by splitting your workforce into a stable core and a flex layer. Keep full-time headcount for the skilled, hard-to-replace roles that run your lines and protect food safety. Size that core to your reliable baseline demand, not your peak. Then cover the swing volume with contingent workers you can scale up or down as categories move.
Cross-train the core so a smaller permanent team can absorb variation without breaking. Pick a staffing partner that specializes in food or industrial placements, one that understands GMP, allergen control, and your audit requirements, so flex workers arrive ready rather than raw. And treat onboarding as a fixed process, not an afterthought, so a temporary worker hits standard on day one instead of day five.
Done well, the hedge protects margin when demand softens and throughput when it spikes. In a market where you can’t forecast volume or lock your costs, the workforce is the one variable you can actually make flexible.
Q&A for food industry executives
How are GLP-1 drugs affecting food demand? GLP-1 medications suppress appetite, and users buy less food. Households cut grocery spending an average of 5.3% within six months of starting the drugs, with savory snacks down about 10%. The effect varies by category, with protein and produce gaining while indulgent products decline.
How much did tariffs raise food costs in 2025? 2025 tariff actions raised food prices 2.8%, with fresh produce up 4.0%. Packaging costs also rose as the steel tariff doubled to 50%.
Why use contingent labor instead of hiring full-time? Contingent labor lets you match staffing to demand you can’t forecast, without the fixed cost or severance risk of permanent headcount. Temp help employment is growing while manufacturing payrolls shrink, a sign manufacturers are already shifting.
