Yeah, but without SNAP - Frito-Lay and Coca-Cola will go bankrupt.
Perhaps.
Removing SNAP (Supplemental Nutrition Assistance Program) benefits entirely would likely cause negative financial outcomes for food producers, distributors, and retailers, particularly those serving low-income consumers.
Here's a breakdown supported by data and economic logic, which I'd suggest that you start using.
1. SNAP Represents a Massive Revenue Stream
Annual SNAP spending is approximately $120–140 billion per year (USDA, FY 2023–2024). One hundred percent of SNAP benefits are spent on food, with roughly 80% redeemed at grocery stores and supermarkets. This serves as a guaranteed, high-velocity revenue channel for about 42 million low-income Americans.
2. Direct Impact by Sector
- Retailers (grocery stores, supercenters): They see over $100 billion in annual SNAP redemptions. Without SNAP, they would face severe revenue loss, especially in high-poverty areas. Chains like Walmart, Kroger, Aldi, and Dollar General rely on SNAP for 7–15% of U.S. food sales, with rural and inner-city stores potentially seeing 20–30% drops.
- Food Producers (CPG, meat, dairy, etc.): These would face a demand shock through reduced retail purchasing, leading to lower sales volume, reduced production, and either lower wholesale prices or layoffs. Packaged goods such as cereals, snacks, and canned items—often marketed to SNAP users—would be hit hardest.
- Distributors / Wholesalers: They would experience a volume collapse in low-margin, high-turnover items, resulting in reduced revenue from trucking, warehousing, and logistics.
3. Evidence from Past SNAP Fluctuations
The 2013 SNAP cuts of about $5 billion per year led to measurable declines in grocery sales, especially in rural areas, according to USDA studies. During COVID-era SNAP boosts (increases of 15% or more), grocers reported record food-at-home sales; the removal of these boosts in 2023 caused sharp sales drops, per Nielsen IQ data. State-level experiments, such as tightened eligibility in Missouri in 2016, showed immediate local retail sales dips.
4. Multiplier Effects
The USDA estimates that roughly 1 job is supported per $70,000 in SNAP spending, tying about 1.7 million jobs to SNAP demand. SNAP also has an economic multiplier of approximately 1.5–1.8 (USDA ERS), meaning $1 in benefits generates $1.50–$1.80 in broader economic activity, much of it in food retail.
5. Who Gets Hurt Most?
"Dollar stores" and discount grocers face high risk because they serve the highest percentage of SNAP users. Rural supermarkets are also at high risk, as they are often the only grocer in town and SNAP can account for 20–40% of sales. Meat, dairy, and bread producers face moderate-to-high risk due to heavy SNAP purchases in these staple categories. Premium and organic brands face low risk due to minimal SNAP penetration.
Bottom Line: Yes, food producers, distributors, and retailers would face significant negative financial outcomes without SNAP. The program is a core demand driver in the U.S. food economy. Removing it would trigger a supply-chain-wide contraction
Sources: USDA ERS, FMI, Nielsen IQ, CBO SNAP analyses (2020–2024).