The Fight to Kick Soda Out of Food Stamps

0:05Laura, are you a soda drinker? Of course. Who doesn't drink soda, right? That's our colleague, Laura Cooper, who covers the beverage industry. Do you have a preference? I have an answer, but I don't know if I should say. It's a secret. We'll find out someday. Yes. When it comes to soda, Laura has recently been looking into a fight that's been brewing in one particular state, Arkansas. There's an effort there now to restrict what people can buy with food stamps, also known as SNAP, the Supplemental Nutrition Assistance Program. No more junk food for Arkansans on the taxpayer's dime. That's what Governor Sarah Huckabee Sanders is proposing.

0:45Sanders says people who receive supplemental food benefits, also known as SNAP benefits, should not be able to use those funds to purchase snacks, candy or desserts. Sarah Huckabee Sanders, who's the governor there, has been pretty clear that she is interested in amending what can be paid for by SNAP in that state. She said that there was a lot of diabetes and obesity in her state. And she thought that people using SNAP to buy things like sugary beverages or desserts or something like that, that would be a contributing factor to that. Here's Sanders making her case on Instagram. A recent study found that if we just cut out sugary drinks and soda from SNAP, we could prevent obesity in 141 ,000 kids and type 2 diabetes in nearly a quarter million adults.

1:41Over the past 20 years, states have tried to get sugary drinks out of the SNAP program. But those efforts have always fizzled. This time, though, Arkansas has a chance. Industry insiders told Laura that if this idea spreads across the country, it could be a real hit to company sales. And soda makers are gearing up for a fight. This has been something that has been looming on the horizon for a long time, the idea of soda being removed from Snap and what that might look like. So I think everyone is watching with great interest what happens in Arkansas to see if that could be a blueprint for other things that would happen across the country.

2:20Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, March 7th.

2:33Coming up on the show, the fight bubbling to get soda out of snap.

2:55And this administration today, here and now, declares unconditional war on poverty in America. That's former President Lyndon B. Johnson. Back in the 1960s, the U.S. government created a permanent food assistance program for low-income Americans. Today, those eligible for the program get a kind of preloaded debit card from their state through the U.S. Department of Agriculture. They can use that to pay for food at grocery stores, convenience stores, and farmers markets. And people can use it for all sorts of things, food, drinks. Things are exempt from this. For instance, you can't buy alcohol or cigarettes or pet food, but it is money that is given for low-income families to buy groceries.

3:43and it's used to buy a lot of soda. Almost 13 % of Americans rely on SNAP. And every year, the federal government spends over$100 billion on the program. But soda and other sugary drinks have been a point of tension in the program for decades. Public health experts and lawmakers have raised concerns over the nutritional impact of those kinds of beverages. Drinking soda is considered to be generally less healthy than, for instance, drinking water or something like that. And I think that there is concerns around diabetes and obesity. And some governors across the country have decided that is an issue in their state.

4:26And this is something that they want to work on specifically through limiting soda in SNAP, the SNAP program. Is it a problem to use SNAP to buy soda? Some would say it is a problem to buy soda on SNAP, though it is authorized and you are able to do it. The issue lies in whether the government should be paying for someone to consume that. In the past, when states like New York and Minnesota have tried to get soda removed from SNAP for their residents, they've gone to the USDA. But the agency rejected their requests, saying the restrictions were too complicated to implement. There are a lot of different kinds of soft drinks with different levels of sugar content, and it would be tricky to sort out what could and couldn't be bought with food stamps.

5:12The agency also said it'd be hard to gauge what kind of impact that effort would have on public health. But under the new Trump administration, the push to ban soda from Snap has been reignited. Robert F. Kennedy Jr., the new Secretary of Health and Human Services, has spoken out against sugary foods for a long time. As part of RFK's campaign to improve public health, what he calls Maha or Make America Healthy Again, he's specifically gone against soda for its high sugar content. You're much more likely to have kids who are in a learning atmosphere if they're not pumping up on sugar and all of these other poisons.

5:53We shouldn't be subsidizing people to eat poison. You ask about why it's so cheap, why it's so ubiquitous. It's because we subsidize the worst foods. RFK has been very clear since before he was even, you know, in this campaign at all, that he thought that SNAP should not cover sugary beverages. That was something that he wanted to happen.

6:23In an op-ed for The Wall Street Journal last September, Remember, RFK said as much, adding it contributes to poor health in America. He also wrote that it's, quote, nonsensical for U.S. taxpayers to spend tens of billions of dollars subsidizing junk. And Brooke Rollins, the head of the USDA, has indicated that she'd support taking soda out of SNAP. So when a taxpayer is putting money into SNAP, are they OK with us using their tax dollars to feed really bad food and sugary drinks to children who perhaps need something more nutritious? Even with growing momentum to take soda out of SNAP, there are still some hurdles, including from within the Republican Party.

7:06It's kind of where Maha and MAGA kind of disagree because some Republicans believe in choice. They believe in, you know, well, if you have SNAP benefits, you should be able to buy what you want to buy. And the government should not police what anyone can buy. But then, you know, Maha is in direct contrast to that saying, well, no, actually SNAP participants shouldn't be able to buy soda with their benefits. The president of the American Beverage Association, which represents soda companies, told us that Americans should be able to decide what's best for their families. He also said that these proposed changes would not, quote, improve health or save taxpayer dollars.

7:46How the soda companies are fighting back? That's after the break.

8:06In Arkansas, Governor Sarah Huckabee Sanders is poised to send a request to the USDA to restrict sugary items from SNAP, potentially including candy, desserts, and soda. Companies like Coca-Cola and PepsiCo are now on high alert, and it's in part because the battle over soda in the SNAP program comes as these companies have been trying to keep up with changing consumer habits. Even though I still drink soda, there are a lot of people who don't. You know, people are thinking about their health and they're looking for healthier options. And full sugar sodas, CSDs as we call them, carbonated soft drinks, are kind of flat on sales.

8:44They continue to happen, but they're going a bit flat. It's so funny when you say like soda companies are flat. Yeah. I recently wrote about Gut Pop prebiotic soda like Olipop and Poppy that's really getting a following. The future of soda is now. And it's called Poppy.

9:09All the soda companies carry Dr. Pepper, Coca-Cola, PepsiCo. They've all been diversifying into different things, energy drinks, milk, seltzer, all sorts of things to continue to keep people coming in. Coca-Cola, for instance, fully acquired the milk brand Fairlife in 2020. In the past few years, PepsiCo also bought SodaStream and invested in Celsius energy drinks. As the companies move away from traditional sodas, they're also pushing back against the efforts in Arkansas. To do that, they're trying to appeal to one of America's most famous soda drinkers, President Donald Trump. The man is a huge Diet Coke fan.

9:49He even has a button for people to bring it to him throughout the day. So that's also part of the interesting thing here. So the American Beverage Association, which is a trade group that represents Dr. Pepper, PepsiCo, Coca-Cola, they have commissioned polling that showed that nearly 60 percent of the people who voted for Trump last year support allowing soda purchases with food aid. So that is something that I think that they're trying to make clear. And I also think they are trying to appeal to Trump himself. He's a big soda drinker, you know. I think that they're trying to appeal to Trump with polling.

10:28Laura says that the president has been skeptical of banning things his supporters like, telling his advisors that bans are unpopular. Beyond that polling, the American Beverage Association also launched an ad campaign. It highlighted that more than half the products Americans buy from soda companies are low or zero sugar drinks. The soda companies are working really hard to remind people of the zero and low sugar options that they offer to continue to keep their consumers coming back. And they would say that they are creating options for other people to meet them where they are. If you want a full sugar Pepsi, go for it.

11:03If you want, you know, Diet Coke, that's available to you too. And if there's one thing I've learned on this beat, it is that Americans love their Diet Coke. They love their Coke Zero, their Pepsi Zero sugar. And they say it tastes just like the original.

11:23So if Arkansas does manage to remove soda from SNAP, what will it mean for the people who use that program? It would mean that SNAP recipients could not buy soda with their benefits. It would mean if you usually buy Coke, you could not. If you usually buy Dr. Pepper, you could not. I think that there are a lot of places in the country where fresh food and different kinds of drinks are not available. And, you know, this is something that people generally buy to feed their families, you know. For instance, we have some lawmakers talking about Arkansas and how it would be great to be able to buy more nutritious foods.

12:00But sometimes that's not what's available to people across the country. Laura says it could also cause some of the complications that the USDA has referenced in the past, because it's unclear what does and doesn't count as an unhealthy soda. And I'm very curious to see, does that mean diet Dr. Pepper? Does that mean zero Coke? What does that mean? We've spoken to a lot of grocery stores as well, small mom and pop, and it just seems like it's also going to be hard at the checkout counter for people. Because right now, if you have SNAP, they know you can't buy alcohol, cigarettes, certain things.

12:38But for so long, people have been able to buy soda. So it's also going to be a little bit of a bottleneck at the actual checkout. If Arkansas succeeds, Laura says that it could open the door for other states to do something similar. Honestly, I think we'll see more of them from other states. It's also states that maybe previously had tried to do something with soda. New York was one. So I think we will see also some not Republican states. I mean, Arkansas is pretty deep red. But I think we'll see other states kind of want to do this as well. How worried would you say soda companies are about what's going on?

13:20I would say they're concerned and they're watching with great interest. That being said, again, they've been here before on many different other paths that haven't gone anywhere. But I do think this is probably the closest we've ever gotten, especially with the buy-in from the executive branch. And I think that that's also been a big thing for everybody to think about. So do you think you'll be grabbing a soda with your lunch after this? You know, I have a reusable water bottle that I always fill. Stick to water. I'll be sticking to water. Nice, neutral water.

14:03Before we go, we wanted to tell you that we're exploring a live event. Tell us what you want to see by taking our survey. There's a link in our show notes. And for updates on our plans, please leave us your email address. That's all for today, Friday, March 7th. The Journal is a co-production of Spotify and The Wall Street Journal. The show is made by Catherine Brewer, Pia Gedkari, Rachel Humphreys, Sophie Codner, Ryan Knudsen, Matt Kwong, Kate Linebaugh, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alessandra Rizzo, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singhe, Jivika Verma, Lisa Wang, Catherine Whalen, Tatiana Zamis, and me, Jessica Mendoza.

14:48with help from Trina Menino. Our engineers are Griffin Tanner, Nathan Singapok, and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Katherine Anderson, Marcus Begala, Billy Libby, Bobby Lord, Nathan Singapok, Griffin Tanner, and Blue Dot Sessions. Fact-checking by Mary Mathis.

15:11Thanks for listening. See you on Monday.