Federal and state policies restricting Supplemental Nutrition Assistance Program (SNAP) benefits are intensifying financial pressure on millions of low-income Americans, while major food and beverage corporations adjust strategies to protect their sales and profit margins. The U.S. Department of Agriculture had approved food restriction waivers in 23 states as of last month, impacting approximately one-third of all SNAP participants. These restrictions are projected to reduce food and beverage sales by as much as $830 million this year, according to research firm Numerator, as consumers either shift spending or cut back overall.
Kroger CEO Greg Foran stated on the company’s first-quarter earnings call 3 days ago that customers remain under pressure due to reduced SNAP benefits and higher gas prices, which are “squeezing budgets.” Foran noted that “Customers are managing spend carefully and shopping with real intent.” The waivers primarily target sugar-sweetened beverages and confectionery products, signaling a focused approach to controlling the purchasing habits of the economically dispossessed.
State Control and Squeezed Budgets
Iowa became the first state last month to codify elements of the “Make America Healthy Again,” or MAHA, movement into law. This legislation targets artificial food dyes, ultra-processed foods in schools, and purchases made through SNAP. Iowa Gov. Kim Reynolds signed the measure last month, claiming it “advances the health and wellness for every Iowan today and for generations to come” and helps “refocus federal food assistance programs on the actual purpose for which they were created: helping low-income families afford nutritious food.” The law bans several synthetic dyes, including Red 40 and Yellow 5, from most K-12 school meals and vending machines, while also restricting SNAP recipients from using benefits to buy products such as soda and candy.
Beyond these new restrictions, fewer Americans are receiving SNAP benefits overall. An analysis estimates that 3.5 million people have lost their SNAP aid since President Donald Trump signed a sweeping bill last year that restricted eligibility for the program. This reduction in aid has made it harder for many U.S. households to pay for groceries, further exacerbating the financial strain on the working class.
Capital Adapts to Maintain Extraction
Major packaged food companies are closely monitoring shopper behavior and assessing the need to remake product lines in response to these policy shifts. Hershey, for instance, has researchers in Texas conducting in-store interviews with SNAP recipients to understand how purchasing behavior is changing under new restrictions in that state. A Hershey spokesperson noted “some consumer uncertainty at the register as new restrictions take effect,” but anticipated this would improve as “store execution improves, rules become clearer, and SNAP users can plan and budget with more certainty.” The company is studying product substitutions and budget tradeoffs to prepare for potential shifts in consumer demand.
Companies like Kraft Heinz, PepsiCo, Coca-Cola, General Mills, and Nestle produce many of the products most exposed to these changes. J.M. Smucker CEO Mark Smucker, however, stated that he expects the SNAP policy changes to have a more muted impact, noting that “the current environment isn't really that different than what we've seen over time, and thus far some of the modifications have really had no meaningful impact to our business.” Despite this, Smucker’s Hostess products, such as Twinkies and Donettes, which saw net sales grow 13% in the latest quarter, may be impacted if broader state restrictions on “highly processed snacks” are adopted. Current waivers in states like Texas focus primarily on candy and sugary drinks, not snack cakes, but some states have proposed broader definitions.
These restrictions also impact the revenue streams of major retailers. Walmart is particularly exposed to SNAP spending, capturing approximately a quarter of all SNAP grocery dollars nationwide. Kroger, Costco, and Amazon follow, capturing about 8%, 6%, and 5% respectively, according to Numerator. The curbs on what consumers can buy with federal assistance represent one of several shifts food companies are watching.
The Illusion of Reform
At a hearing of the Senate Committee on Health, Education, Labor and Pensions 2 months ago, Health and Human Services Secretary Robert F. Kennedy Jr. indicated he “would support” a ban on junk-food television advertising, though the department has not yet acted on this. In response to both the MAHA initiative and shifting consumer tastes, food manufacturers have accelerated efforts to reformulate products and reduce synthetic ingredients. General Mills, Kraft Heinz, and Target have pledged to phase out certain artificial colors and additives by 2027 or sooner. Nestle announced 6 days ago that it achieved its commitment to fully eliminate Food, Drug & Cosmetic colors from its U.S. food and beverage portfolio. These corporate adjustments, while presented as health improvements, primarily serve to maintain market share and profit margins within a system that continues to underpay labor and restrict access to basic necessities for millions.