Investing.com — The nomination of Robert F. Kennedy Jr. as the new Secretary of Health and Human Services (HHS), pending Senate approval, could have major implications for the U.S. food sector.
Kennedy’s outspoken stance against “Big Food” and his call to remove chemicals from the U.S. food supply indicate potential challenges for the industry. His proposal to declare a national emergency for chronic diseases underlines an aggressive regulatory approach that could reshape policies affecting packaged food companies.
Major concerns include school lunch programs, which may have stricter guidelines for sugar, sodium and trans fats.
“Although trans fat levels have been largely reduced to de minimis levels per serving, many foods, including sugary cereals, processed meats, soups and yogurt, may be affected,” Bernstein analysts said in a note.
“That said, it is notoriously difficult to establish a firm definition of ‘processed foods,’ and the industry has a track record of responding to specific tightenings of dietary guidelines with incremental changes that keep their products within scope. ”
Another point of interest is Kennedy’s advocacy for the reduction of synthetic food dyes, such as Red 40 and Yellow (OTC:) 5, which are already restricted in Europe. Companies such as PepsiCo (NASDAQ:), W. K. Kellogg (NYSE:) Co (NYSE:), General Mills (NYSE:), and Kraft Heinz (NASDAQ:), whose products often contain these dyes, could face increased scrutiny.
Meanwhile, the beverage sector could be affected by Kennedy’s interest in limiting Supplemental Nutrition Assistance Program (SNAP) benefits for the purchase of processed foods and sugary drinks.
A USDA study found that 10% of SNAP benefits are spent on sweetened beverages, making them a likely target. However, it could be challenging to define exactly which foods should be excluded from SNAP coverage,” Bernstein analysts said.
Broader regulatory shifts could include programs to promote healthier eating, building on international models such as Europe’s sugar taxes or the UK’s High Fat, Sugar, and Salt Initiative.
There could also be improved front-of-pack labeling, increasing consumer awareness and potentially dampening demand for highly processed foods.
Kennedy’s appointment comes amid continued inflationary pressures on the food supply chain, exacerbated by labor shortages and possible immigration crackdowns. Tougher agricultural subsidy policies could also drive up food prices while promoting healthier crop production, changing the competitive landscape for processed food producers.
Even if legislative changes are limited, increased media coverage of Kennedy’s “Making America Healthy Again” agenda could influence public perception, drawing parallels to previous shifts following GMO labeling debates.
Previous national media coverage of this debate has significantly influenced consumer behavior. This awareness extended to things like artificial flavors and colors and the use of hormones and antibiotics in meat and dairy. The result was a decline in demand for heavily processed foods and an increase in the number of cleaner brands.
“We wonder if we could see a similar effect this time,” analysts asked.
However, they also warn that Kennedy’s efforts could face resistance. Particularly among Trump voters, resistance to the perceived overreach of personal food choices could limit the impact of such initiatives and potentially shorten Kennedy’s tenure at HHS.
