Republican states are leading the charge to restrict soda and candy purchases under the Supplemental Nutrition Assistance Program, aligning with Secretary of Health and Human Services Robert F. Kennedy Jr.'s “Make America Healthy Again” initiative.
12 State Waivers Approved
While the SNAP program doesn’t come under Kennedy’s department, he has worked alongside Agriculture Secretary Brooke Rollins to promote soda and candy bans as part of the nutritional assistance program, according to a report by The Hill.
Six months into the new administration, the U.S. Department of Agriculture (USDA) has approved 12 state waivers limiting SNAP purchases of sugary drinks, energy drinks, and candy.
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On this, Kennedy says, “We all believe in free choice, we live in a democracy… if you want to buy sugary soda, you ought to be able to do that. The U.S. taxpayer should not pay for it.” The current states with approved waivers include Arkansas, Colorado, Florida, Idaho, Indiana, Iowa, Louisiana, Nebraska, Oklahoma, Texas, Utah and West Virginia.
A Blue State Joins In
The movement is now gaining bipartisan traction, with Democrat-led Colorado joining in, and seeking a soda-ban waiver approved by the Department of Agriculture. It is also the only state seeking to expand SNAP benefits while limiting its scope.
Both Democrats and Republicans have expressed interest in eliminating soda from the SNAP program in the past, with the Trump administration being the first to encourage states to do so.
Impact On Food And Beverage Stocks
According to a 2016 study by the USDA, this policy shift could threaten an estimated $6 billion in annual SNAP-funded beverage sales.
Based on data analysed by Chicago-based Numerator, Post Holdings Inc. (NYSE:POST), Tyson Foods Inc. (NYSE:TSN) and Conagra Brands Inc. (NYSE:TSN) are the most exposed to SNAP benefits, with 10.6%, 8.4% and 7.7% of shopper trips using SNAP dollars, according to a report by the Supermarket Perimeter.
According to data from RBC Capital, nearly 5% of Coca-Cola Co.’s (NYSE:KO) U.S. sales come from SNAP purchases, with PepsiCo Inc. (NASDAQ:PEP) and Keurig Dr Pepper Inc. (NASDAQ:KDP) at 6%.
However, RBC analyst Nik Modi says these sales will not disappear by just removing them from the SNAP program, as consumers will likely substitute other expenditures to pay for soft drinks without using their benefits.
| Stock | SNAP Trips / Total Sales (%) | YTD Performance |
| Post Holdings Inc. (NYSE:POST) | 10.6% | -4.72% |
| Tyson Foods Inc. (NYSE:TSN) | 8.4% | -1.91% |
| Conagra Brands Inc. (NYSE:TSN) | 7.7% | -30.43% |
| Coca-Cola Co.’s (NYSE:KO) | 5% | +13.75% |
| PepsiCo Inc. (NASDAQ:PEP) | 6% | -3.33% |
| Keurig Dr Pepper Inc. (NASDAQ:KDP) | 6% | +8.38% |
Shares of Post Holdings were up 4.92% on Thursday, closing at $107.96. The stock scores poorly in Benzinga’s Edge Stock Rankings, with an unfavorable price trend in the short, medium and long terms. Click here to see how it compares with peers and competitors in the consumer packaged goods industry.
Photo Courtesy: Oleksiichik on Shutterstock.com
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