U.S. retail chain Walmart (WMT) has revealed that it is planning to get rid of synthetic food dyes and some preservatives from its food within the next two years. Its shares however, dropped nearly 2% in early trading.
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Cakes and Cheese
Walmart said it would remove the dyes and 30 ingredients including artificial sweeteners and fat substitutes from its store brands sold in the U.S. by January 2027.
The brands include Great Value, Marketside, Freshness Guaranteed and Bettergoods.
Walmart said its ingredient changes will affect products such as sports drinks, cake frosting and cheese dip, with some changes already showing up on its shelves. The retail giant plans to nix ingredients including titanium dioxide, a food coloring, and azodicarbonamide, used to help bread rise consistently.
It said it would work hard to ensure prices remained in check despite the changes.
Walmart said that it was responding to customer demand for more simple and natural ingredients.
Customer Tastes
“More than 50% of Walmart shoppers now flip over a food package to look at ingredients, he said. “The customer is just getting louder and louder on this,” Morris said. “We feel like we can continue to be a catalyst with that demand as well, so that we can get the cost proposition exactly where we want.”
Walmart will become the latest big food firm to make the move away from artificial ingredients in packaged goods. Others include Kraft Heinz (KHC), General Mills (GIS) and Tyson Foods (TSN), which last month pledged to stop using high-fructose corn syrup.
These moves are partly down to changing customer tastes but also pressure from Health Secretary Robert F. Kennedy Jr. He has called on food companies to remove all synthetic dyes as part of the “Make America Healthy Again” movement.
That’s important as legal, regulatory and political issues are a key risk all retailers and their investors need to keep on the menu.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 29 Buy ratings. Its highest price target is $129. WMT stock’s consensus price target is $114.89, implying a 13.47% upside.
