• Under Robert F. Kennedy Jr., President-elect Donald Trump’s choice to head Health and Human Services, the FDA could undergo major shifts. It would affect industries far beyond pharmaceuticals—including food manufacturing, retailing and healthcare.
• With RFK Jr.’s focus on food additives and weight-loss drugs, companies may need to adapt to new, health-conscious offerings, potentially reshaping how products are developed, marketed and consumed.
• As the FDA reexamines decades-old policies, companies will face unpredictable challenges and opportunities—with implications for stock valuations. 

If the Senate confirms Robert F. Kennedy Jr. as secretary of Health and Human Services, his stance on food additives and weight-loss medications could cause tectonic philosophical shifts at the U.S. The Food and Drug Administration. The tremors might could reverberate through the biotechnology and pharmaceutical industries for years.

The FDA might embark upon a wave of regulatory changes that ripple across the economy, changing how products are developed, marketed and consumed. As part of the process, the FDA is expected to revisit and reassess long-standing policies, forcing companies in food manufacturing, healthcare and retail to adapt. And to navigate this evolving landscape, many businesses will need to reinvent some of their offerings.

Today, we break down the potential market effect of these changes and explore how they could reshape the future for companies and investors alike.

RFK’s FDA: new opportunities, new challenges

One of the most pressing decisions on the FDA’s horizon is whether to ban certain food dyes, most notably Red No. 3, which has raised concern because of its potential carcinogenic effects in animal studies. Reviewed multiple times since its approval in 1969, the crimson dye remains a target of advocacy groups pushing for its reassessment and possible removal from the market. RFK’s criticism  of food additives and chemicals, along with growing public concern about their health implications, has intensified calls for regulatory action.

The FDA is expected to make a decision on Red No. 3 in the coming weeks, and if the ban is implemented, the impact on food manufacturers—especially makers of candy, snacks and beverages—could be significant. Companies in those sectors, which rely heavily on artificial dyes to enhance their products’ visual appeal, may face costly reformulations, potential brand disruptions and supply chain challenges as they scramble to adjust their offerings.

Looking beyond the Red No. 3 issue, RFK Jr.’s leadership at the FDA could bring broader shifts across corporate America. The agency’s review of safety regulations could extend well beyond artificial additives, affecting a variety of industries, including manufacturing, supply chains and retailing. While the specifics remain unclear, it’s evident that his approach will likely involve a reevaluation of long-standing regulatory standards. As details emerge, we will explore how these decisions could reshape industries and influence stock valuations in the weeks ahead.

Food dyes under the microscope

As the FDA nears key decisions on food additives like Red No. 3 and other synthetic dyes, the ripple effects will extend across the food manufacturing and beverage industries. Some companies will face challenges, while others will uncover new opportunities. 

In the near term, food and beverage giants that rely on synthetic additives for product appeal are likely to face the strongest headwinds. Reformulating products to comply with potential FDA bans could be costly and time-consuming.

And these companies may need to invest in research and development to find natural substitutes that maintain the same visual appeal without compromising taste or shelf life. However, natural ingredients often come at a premium, thus raising production costs. And in some cases, natural substitutes may not perform as well as synthetic dyes, potentially causing issues with consistency and quality control, and ultimately damping demand for the product in question. 

Beyond reformulation costs, some companies are also likely to encounter operational disruptions. For example, adjusting production lines, sourcing new ingredients and updating packaging can create supply chain challenges and delays. Additionally, companies will probably face increased marketing and consumer education costs as they work to maintain the trust of their customer bases. Some of the companies exposed to possible forthcoming changes may include the following: 

• Kellogg’s (K): With its iconic Froot Loops and other brightly colored cereals, Kellogg’s relies heavily on synthetic dyes like Red 40. If the FDA moves to ban these additives, the company could face challenges in maintaining the same vibrant product appearance, potentially altering customer perceptions. The cost of switching to alternative ingredients or reformulating products could also increase costs and eat into profit margins. 
• General Mills (GIS): The maker of Lucky Charms, which also contains red 40, will face similar obstacles. Reformulating its products to replace artificial colors with natural alternatives could be expensive and time-consuming, potentially leading to production delays and product recalls, in addition to higher costs and reduced profits. 
• PepsiCo (PEP) and Coca-Cola (KO): With popular products like Gatorade, Mountain Dew and Fanta, both of these beverage giants rely on synthetic dyes to achieve the bold colors that consumers associate with those brands. A ban on certain additives could force them to reformulate their products, which could negatively affect their brand identity, and dampen demand. 
• Mars: Known for its colorful candies like M&Ms and Skittles, which often rely on Red 3, Mars could face considerable challenges if the dye is banned. The company, one of the largest privately owned firms in the country, might have to find alternatives to maintain the visual appeal of its products, and such a shift could be costly and negatively affect consumer loyalty. 

Retailers prepare for ripple effect

The looming decisions from the FDA could also affect the retailing industry, including companies like Walmart (WMT) and Target (TGT). However, the degree of disruption will depend on how the changes affect their suppliers. For example, if major food manufacturers can easily reformulate their products, retailers may experience minimal problems. In this scenario, changes to their inventory could be relatively negligible, and consumer behavior may remain largely unchanged. 

On the other hand, if reformulation leads to noticeable disruptions—such as supply chain delays, product shortages or a shift in consumer preferences—retailers could face more substantial challenges. For instance, consumers might become more sensitive to the products affected by the FDA’s changes, driving a surge in demand for natural, organic or dye-free alternatives.

Retailers like Walmart and Target, which are accustomed to dealing with shifting consumer preferences, would likely need to realign their offerings to meet this shift in demand. In turn, this would probably involve sourcing new inventory, updating product displays and adjusting marketing strategies to highlight cleaner, healthier options. While this adjustment may involve temporary setbacks, it could also present long-term opportunities.

In contrast, companies specializing in natural or organic products, such as Whole Foods (a part of Amazon, AMZN) and The Hain Celestial Group (HAIN), are well-positioned to benefit from a consumer pivot toward cleaner, dye-free alternatives. As consumers become more aware of the potential risks associated with synthetic additives, these companies could see a surge in demand. Whole Foods, for example, with its strong focus on organic and minimally processed offerings, is already aligned with food and beverages made from natural ingredients. With other companies scrambling to adjust, Whole Foods could gain market share. 

Similarly, Hain Celestial Group, with its portfolio of iconic organic and natural brands, is poised to benefit from a potential shift in consumer values. The company doesn’t merely follow naturally focused trends; it shapes them. As a pioneer in this space, Hain is home to trusted brands like Celestial Seasonings and Earth’s Best—both of which have become synonymous with wholesome, authentic food. And if an increasing number of consumers turn to these nourishing options, Hain is sure to grow its market share.

Weight-loss drugs: another hurdle for the food industry

Another crucial dimension of the FDA’s evolving narrative, particularly under the potential guidance of RFK Jr., is the push to address obesity. Kennedy’s “Make America Healthy Again” platform, which aims to confront the root causes of chronic disease, has placed particular emphasis on obesity. As part of this initiative, he has been vocal in his criticism of weight-loss drugs like Ozempic and Wegovy—both developed by Novo Nordisk (NVO)—which belong to the rapidly expanding class of GLP-1 drugs.

These medications have gained traction because of their ability to suppress appetite, and projections suggest the GLP-1 class could become the dominant drug category in coming years, eclipsing the lucrative PD-1 inhibitors used in cancer treatment. Global sales of GLP-1 drugs are expected to surpass $120 billion by 2029, highlighting their growing influence on consumer behavior as more consumers around the world turn to these treatments for weight management. However, RFK has championed better nutrition as a solution to the obesity epidemic, as opposed to GLP-1s. As the FDA navigates these complex issues, the implications for the healthcare and food industries are profound. 

The rising use of GLP-1s is already having a noticeable affect on consumer habits, particularly when it comes to food consumption. These drugs help individuals reduce their appetite and calorie intake by as much as 30%, and food companies are starting to feel the effects. The snack and junk food sectors are especially vulnerable, with users of GLP-1s reporting a noticeable reduction in their consumption of calorie-dense foods. Hershey’s (HSY), Mondelez (MDLZ), Campbell Soup (CPB) and Conagra (CAG) could face long-term pressure as consumers cut back on sugary snacks, salty chips and sodas. 

Further evidence of this trend is already apparent, with GLP-1 users spending less at restaurants (illustrated below), underscoring a broader shift in consumer behavior that could throttle growth in the food industry. And as adoption rates of GLP-1s increase, the ripple effects could spread across the entire food supply chain, from production to retail.

Conversely, this pivot toward healthier eating presents an opportunity for companies offering more nutritious options. Cava (CAVA), Chipotle (CMG) and Sweetgreen (SG), as well as brands like Simply Good Foods (SMPL) and Vital Farms (VITL) that focus on weight-management products, are well-positioned to capitalize on the growing demand for healthier alternatives.

That said, the future of GLP-1s remains uncertain, particularly as RFK Jr.’s position on these medications could spark policy changes that limit their accessibility and use. In much the same way food manufacturers might need to adapt to potential FDA decisions on banning synthetic dyes, other sectors in the food industry will need to navigate these shifting dynamics carefully, potentially adjusting their offerings to meet the complex demands of GLP-1  users. 

A new era for the FDA, and the corporate sector

As the FDA braces for transformative shifts under RFK Jr.’s possible leadership at HHS, the potential for far-reaching changes in the food and drug industries is undeniable. RFK Jr.’s outspoken positions on issues like synthetic food additives and obesity are laying the groundwork for sweeping regulatory reform, poised to redefine long-established industry standards. In this new business environment, flexibility and responsiveness will be the keys to survival.

Manufacturers will face the immediate need to comply with evolving rules, while other companies will be forced to adapt to shifting consumer preferences. In the most extreme scenarios, these changes could trigger realignment of the food industry—fundamentally altering how products are created, marketed and consumed by an increasingly health-conscious public. With such high stakes, the trajectory of many companies—and their underlying shares—could be reshaped in profound ways in the months ahead.

Andrew Prochnow has more than 15 years of experience trading the global financial markets, including 10 years as a professional options trader. Andrew is a frequent contributor Luckbox magazine.

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.