MAHA SNAP restrictions on junk food could change spending

The growing push to restrict Americans from using federal food aid to buy certain processed or sugary products is creating a new challenge for some of the biggest U.S. food and beverage companies.

The U.S. Department of Agriculture as of May had approved food restriction waivers for Supplemental Nutrition Assistance Program benefits in 23 states, affecting roughly one-third of all SNAP participants, according to Numerator. The research firm estimates the restrictions could reduce food and beverage sales by as much as $830 million this year as consumers either shift spending to approved products or cut back overall.

Kroger CEO Greg Foran said on the company’s first-quarter earnings call on Thursday that customers remain under pressure in part due to reduced SNAP benefits, as well as higher gas prices, “squeezing budgets.”

“Customers are managing spend carefully and shopping with real intent,” Foran said.

Most waivers focus on limiting consumption of sugar-sweetened beverages and confectionery products, signaling a targeted approach rather than broad food restrictions. As the movement spreads, it’s forcing major packaged food companies to monitor shopper behavior and assess whether they need to remake product lines — though many of them have already been changing what they offer after consumer habits shifted in recent years.

Iowa recently became the first state to codify elements of the “Make America Healthy Again,” or MAHA, movement into law, approving legislation that targets artificial food dyes, ultra-processed foods in school and purchases made through SNAP.

“Altogether, this bill advances the health and wellness for every Iowan today and for generations to come,” said Iowa Gov. Kim Reynolds when she signed the measure last month.

She added the law 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.

At a Goldman Sachs conference in May, Hershey said it has researchers in Texas conducting in-store interviews with shoppers who receive SNAP benefits to understand how purchasing behavior is shifting under new restrictions in the state.

“We’ve observed some consumer uncertainty at the register as new restrictions take effect,” a Hershey spokesperson told CNBC. “We anticipate this will improve as store execution…