THE MORNING RANT: PepsiCo (Frito Lay) Snack Sales Decline as SNAP Restrictions Kick In

Thanks to President Trump and Robert F. Kennedy, Jr., states have been empowered to restrict SNAP benefits (formerly known as “food stamps”) such that the benefits cannot be used to purchase junk food and sodas. As SNAP restrictions have rolled out, it has been a sucker-punch to the manufacturers of low-nutrition products.

PepsiCo has been hit especially hard, as its revenue is more reliant on snack products than is the case with Coca-Cola, which is weighted more toward beverage sales.

“PepsiCo’s Turnaround Stutters as Americans Rethink Snacking” [Reuters – 7/14/2026]

Sales in the Frito-Lay and Pepsi soda maker's North American food business slipped 2%, while volume was flat in the second quarter ended June 13, even after earlier price cuts of up to 15% on some of its biggest products including Lay's, Doritos, Cheetos and Tostitos.

For PepsiCo, whose food brands including Ruffles and PopCorners generate about 58% of its annual revenue, the shift threatens one of the key engines that has driven growth for decades.

Articles such as this Reuters piece linked above talk about diet drugs and shifts in consumer food choices as being primary reasons for the decline in snack food sales, but it doesn’t mention that the goal of making SNAP benefits be spent on healthier food is having an impact. Successfully weaning welfare recipients off of taxpayer-subsidized junk food is not a success story to Reuters and the left.

But that is what’s happening.

“SNAP restrictions could change what shoppers buy — and food giants are watching” [CNBC – 6/20/2026]

SNAP purchase restrictions are now approved in 23 states, affecting about one-third of recipients and potentially reducing food and beverage sales by up to $830 million this year.

That misleading statement from CNBC makes it sound like SNAP spending is being reduced by $830 million. That is not the case. There is a potential $830 million that won’t be flowing to PepsiCo and Coca Cola.

Companies including Hershey, PepsiCo, Coca-Cola and Kraft Heinz are closely monitoring shopper behavior as limits on soda and candy purchases expand.

PepsiCo has already had to respond once to the SNAP changes by cutting prices. When low-income consumers were forced to start using their own money to buy potato chips, rather than taxpayer money, many stopped buying premium-priced Frito-Lay products.

I’ll take this opportunity to restate what I previously wrote about the market distortion of taxpayer-subsidized junk food, from a piece from last February titled, “Following SNAP Restrictions on Junk Food, Pepsico Cuts Prices Due to Softening Consumer Demand.”

Some basic economic truths are playing out in the junk food market – the market where Pepsico engages in commerce. Much of its revenue has been in the form of redistributed taxpayer money, which passes through government to the recipients of what was once called “food stamps.” The recipients of SNAP benefits (Supplemental Nutrition Assistance Program) have historically spent considerable amounts of their federal food assistance on Doritos, Mountain Dew, and other low-nutrition foods sold by Pepsico.

It didn’t take long for Pepsico to feel the pinch. By early February, the company was finding itself needing to cut prices in response to slowing sales.

But a few months earlier when SNAP recipients were still spending government money, Pepsico was able to steadily increase prices. Now that those same consumers are forced to buy Fritos and Cheetos using their own money, they have suddenly become price conscious.

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When corporations and their executives made a hard-left political turn in the early 21st century it puzzled me, because the Democrats they allied with were not the party of free enterprise. But I’ve since come to realize that much of corporate America now rejects free enterprise too, and instead wants government to act on its behalf in redistributing money from taxpayers to corporations.

Be it SNAP benefits for junk food or EV credits for auto manufacturers, the Trump administration is putting an end to the corporatist business model and its parasitic attachment to taxpayer wallets.

With “affordability” such a visible political issue, and with the Pepsico case-study showing how consumer prices can be reduced, Republicans need to aggressively focus on cutting the government subsidies that result in higher consumer prices.

Other Stuff I’m Writing About

My latest piece at the The American Spectator has been published. “Natural Gas, AI, and the Industrial Boom Nobody Wants to Talk About” discusses the massive, ongoing industrial buildout going on in this country, focusing especially on the record orders and backlog for electricity-producing, natural gas turbines, and how this boom is cascading through the economy, resulting in an expansion of American manufacturing.

A subject I feel is important to keep covering, despite the puzzling disinterest of the political and media class, is the extraordinary industrial growth that is occurring in the United States. There is effectively a massive “stimulus package” of spending going on, and best of all, it is being privately funded. For once, taxpayers are benefiting from this vast “shovel-ready” stimulus, unlike recent government stimulus spending endeavors, in which money was simply redistributed from taxpayers to favored recipients.

This piece is not behind a paywall. I’d be honored if you’d give it a read.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

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