Food in Crosshairs of New SNAP Payments Risk

By Jonathan Feeney and David Schick and David Katzman and Jack Hermann Published on October 28, 2025 PDF

Escalation of Benefits Risk. According to a current message on the USDA website with respect to SNAP; “the well has run dry. At this time, there will be no benefits issued November 1.” We still see several potential off ramps to this impasse, including a lawsuit filed earlier today by 25 states, but this rhetoric is a clear escalation. Any risk to November SNAP benefits would likely have immediate negative impact on the staples sector and its retailers. This comes against a backdrop of potential longer-term SNAP benefit reductions and work requirements already enacted.

Risk to ~ 9% of Food at Home Spending. SNAP is the largest federal food aid program and serves roughly 17% (22 million) of U.S. households (132.2 million). In 2024, SNAP benefits comprised $95 billion or roughly 8.7% of food at home spending of $1.1 trillion and likely comprise a similar portion today.

Figure 1: SNAP Benefits as % of Food At Home Spending

_{Source: USDA, Census Bureau via FRED, Optimal Advisory}

Yet Another Headwind for Mealtime Items. According to USDA data, SNAP household spending is roughly comparable in product mix to that of non-SNAP households, with centerplate categories like meat, poultry & seafood & frozen foods (e.g. CAG, KHC) a bit more heavily impacted by the headwinds.

Tough Timing with Inflation, Tariffs. Since 2021, the food & beverage industry has absorbed the twin blows of a (-330 bps) headwind from SNAP benefit reduction alongside 20%+ stacked inflation in that time. Looking forward, we also note the generally inflationary impact of tariffs and farm aid uncertainty highlighted on our 10/10/25 “Biggest Shutdown Risks from Farm to Table” call.

Favor Global & Items with Higher Income Skew. We see no clear winners from incremental U.S. food spending pressure. We continue to see more global companies & higher income skewing items like beauty, energy drinks, & premium spirits (e.g. EL, CELH, BFB, SAM) as having superior volume and/or pricing power to offset the current middle income U.S. consumer headwinds.

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