The Trump administration has ushered in a number of cuts and restrictions to the Supplemental Nutrition Assistance Program (SNAP) this summer, and grocery retailers and CPGs will likely need to adapt as the 42 million Americans who receive SNAP benefits could shift their spending.
The passage of the One Big Beautiful Bill Act earlier this summer cut $186 billion in federal funding to SNAP over the next 10 years, while shifts in work requirements also mean about 2.4 million Americans could lose their benefits, according to analysis by the Congressional Budget Office.
Meanwhile, Health and Human Services Secretary Robert F. Kennedy, Jr. has been pushing states to limit how shoppers can spend their SNAP benefits under his “Make America Healthy Again” agenda. Twelve states, including Florida, Texas, Colorado, and Iowa, have had waivers approved that restrict consumers from using SNAP benefits to purchase items like candy and soda.
SNAP households are a core pillar in consumer spending, accounting for 12% of grocery sales, per the National Grocers Association, and 20% of total CPG sales, according to Circana. They also make 29% more trips to grocery stores and spend 11% more per trip than other consumers. The SNAP changes, therefore, add “a level of complexity” for all CPGs and retailers to navigate, Sally Lyons Wyatt, global EVP and chief advisor of consumer goods and food service insights at Circana, told Retail Brew, bringing spending changes they can’t ignore.
A big cart to play: CPGs and retailers will need to “refine” their SNAP strategies in several ways, Wyatt said. The bill’s passage cut funding for SNAP-Ed, a federally funded nutrition education program that will now end at the conclusion of the fiscal year, leaving a significant gap in nutritional education for consumers. Now, Wyatt said, “retailers will have to really carry that and provide the guidance,” suggesting CPGs partner with retailers to further educate consumers about their products. And that education can extend to meal planning for SNAP shoppers too, with promotional efforts advertising, for example, a recipe for a $10 family meal that shoppers can add to their carts in one click, Wyatt said.
Retailers must evaluate their product assortment and CPGs, their innovation strategies, she said. This is especially true for retailers and brands selling in the mass and dollar channels, where SNAP households shop the most. Walmart accounts for 25.8% of SNAP shoppers’ annual grocery spend, per Numerator, while CPG brands most purchased by SNAP recipients, like Post, Tyson, Conagra, General Mills, and Frito-Lay could be most affected by SNAP changes.
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Brands need to identify the potential risk or tailwind from state SNAP waivers, which vary from state to state, with implementation dates spanning from January to July 2026. While most so far largely focus on sugary beverages and candy, a few are more restrictive. Iowa’s includes all taxable food products, which includes dried fruit leathers, fruit and nut products made with natural or artificial sweeteners, and granola bars, while Arkansas’s includes low- and no-calorie soda, and fruit and vegetable drinks that contain less than 50% natural juice.
While some brands, products, and categories could see less spending in those categories due to state waivers, some could see more spending as recipients allocate more money elsewhere, Wyatt noted. Both considerations “have to go into the strategy conversation” for brands and retailers, she said. That strategy should include looking at prices and product sizes offered, who is buying those products, and identifying the consumers they want to retain and attract.
Brands should look to new innovation to meet SNAP consumers’ changing needs, but that doesn’t necessarily mean launching new value-focused products. CPGs going toe-to-toe with lower-priced private label products “would not be a good idea,” Wyatt said, but brands should instead zero in on premium, healthier products with various price tiers and smaller pack sizes that can appeal to SNAP shoppers. This allows consumers to stay with the brand or product they enjoy, but can’t afford in a larger size—especially for the loyal cohort of SNAP shoppers, as Circana found last year that 81% of SNAP dollars are spent on national brands.
Ultimately, affordability is going to be a core topic in the grocery industry for the next 12–18 months, Wyatt said.
“It’s still a challenging time, and with the challenging times, consumers are having to make difficult choices, and now SNAP has just [been] hit with a couple of extra headwinds that getting help from manufacturers and retailers would be greatly appreciated from that consumer set,” she said.