Considerations from the MAHA Report for Better For You Brands

In the initial Make America Healthy Again report, ultra processed foods (UPFs) were a main target. In the second release, Make America Healthy Again Strategy Report, ultra processed foods moved to the backburner and were only mentioned twice with the focus on simply defining the category. With the amount of attention paid to UPFs in the first report, it was a surprising development when they were barely mentioned in the strategy report, but it is our opinion that they will continue to be scrutinized, and action will come (or already has started) either from the federal government or the state level. With the overall market movement towards "better for you" foods, many companies have already started adding new or reformulated products to their portfolios. Below we talk about the market action being taken and strategies companies have deployed to appeal to this new movement.

 Regulatory Action

 While most regulatory action related to "better for you" foods has come at the state level, the federal government has not sat idle waiting for bills to pass or resolutions from the MAHA releases. The FDA has begun revoking certain dyes, starting with Red Dye No. 3, and has proposed revoking Orange B and Citrus Red No. 2. At the state level, California has banned synthetic dyes and additives. Texas will require warning labels on products containing any of 44 ingredients banned internationally. West Virginia has passed a law like California’s, and many other states are considering bills affecting school food. Relating to federal programs, more states are requesting waivers to restrict purchases of sugar-sweetened or processed foods under the Supplemental Nutrition Assistance Program, known as SNAP.¹

Strategies

With all the conversations coming out of the MAHA reports, companies are left to their own judgement to decide how to move forward as they await federal and state action. Below we list out areas that companies can consider starting moving their products in the direction it seems to be headed.

Reduced Sodium

Excess sodium intake has long been linked to elevated blood pressure and negative outcomes. The stance by the MAHA commission is not a new one but due to sodium being linked to UPFs and shelf stability, it will likely continue to be a target of the movement. While the MAHA commission more broadly focuses on reducing food additives and chemicals, sodium wasn't specifically singled out since there is already a lot of scientific evidence supporting sodium reduction to better health outcomes. Shelf stability is one main reason to include sodium in a product and the other main reason is it is used as a flavor enhancer. Companies looking to enhance flavor can look to other ingredients but unfortunately it is unlikely to be a one for one substitute. Some strategies companies can deploy are using potassium chloride, utilizing yeast extracts, hydrolyzed vegetable proteins, nucleotides, fermented or culture ingredients/bases, or using other natural flavors that can enhance salt perception.

Reduced Sugar 

Sugar reduction is a growing priority in product development as consumers seek to address concerns related to sugar consumption. These concerns primarily include potential health effects, particularly for individuals with diabetes or other conditions for which sugar intake is detrimental, but also overall calorie intake. However, removing sugar from a formulation presents several challenges beyond just replacing its sweetness. Companies looking to reduce sugar but not lose sweetness can look to deploy a few strategies: replacing sugar with one or more low- or no-calorie sweeteners such as stevia, monk fruit, acesulfame-K or even sugar alcohols. One area to watch out for here though is that many of these alternative sweeteners are self-affirmed GRAS so they could come under the scope of MAHA or the federal government later.

Cleaner Labels

Driven by consumers, the clean label movement has been one of the bigger developments the food industry has seen in the past decade. Consumers have been demanding more transparency and simplicity in the products they buy which has led many companies to create, reformulate or buy companies that add said products to the portfolio. The area with the most traction in the MAHA report is in this category as artificial colors are already being targeted by federal agencies. Consumers are looking for products with fewer ingredients, more whole foods and more freshness (less preservatives). This can be seen on products with "free from" claims.

Increasing Nutrient Density

We have seen many trends over the past few decades that come and go which are usually tied to a new diet trend. Low carb, carnivore, high fiber, among others. What's interesting about the period we have now entered is the consumer sentiment isn't just looking for one thing anymore, they are looking for more nutrient dense solutions that satisfy more than one macro nutrient demand. They want high fiber, high protein, low fat, and low-calorie items to work into their diets. This may be even more true for consumers that are taking medications like GLP1's. With many consumers now eating less, it's even more crucial for food items to be packed with nutrients or they will become malnourished and need to supplement through other means.

 Path Forward

 The "better for you" food movement appears to be one that will stick around for quite some time for two reasons: regulatory action and consumer preferences. Companies have begun adding new products to their portfolios, reformulating existing products and engaging in M&A to acquire smaller companies that have a growing customer base.

Consumers have clearly spoken that they desire cleaner labels and healthier products so the momentum will likely only gain from here, not slow down. Companies interested in appealing to the changing consumer demands, or ensuring they stay in line with any new regulations, would be wise to look at the above strategies to not lose ground in this ever-changing marketplace, though it remains to be seen if the regulatory action will force their hand sooner, rather than later.

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References

¹https://www.fns.usda.gov/snap/waivers

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