… Global / US Issues Facing Food Companies: Dongoski says numerous issues present a “tipping point” in global and US economies. Global conflicts—including Russia’s war with Ukraine—have impacted global commodity markets and wheat prices, in particular. US food processors also face new variables—including US tariff trade actions, a federal “Make America Healthy Again” program, GLP-1 weight loss drugs and even generational consumer behaviors shifts. Dongoski points to all of these as “sparks in a tinder box” that could restructure and systematically transform the food landscape during the next several years.

… Tariff Impacts on US Farming, Ingredients: Dongoski recognizes that food and beverage processors and their ingredient suppliers are “looking for certainties” in the midst of sweeping, uncertain tariff actions. He says most US foods in groceries and restaurants come from domestic ingredients although tariff actions will influence US corn, soy and wheat supplies and trade. For the moment, it’s hard to predict where or when the pendulum of tariffs will stop. Even so, he says agile, nimble companies can look to be opportunistic.

… Impacts and Implications for US Farming: Dongoski says federal activities will definitely impact farmers’ day-to-day lives. He notes that farm incomes—although cyclical—are low at the moment. Moreover, agriculture only accounts for approximately 2% of the nation’s workforce whereas that percentage was much higher even just 30 to 40 years ago. He adds that although automation and innovation have improved farming, most of the “best and brightest” young professionals are not going into agriculture. Moreover, programs such as immigration reform might be popular at a broad level but carry some impacts that are very acute in agriculture—particularly related to the sheer amount of manual labor needed to pull crops from the ground. Dongoski later notes that regulatory actions have increased the costs of farming by as much as 10% in some certain states. He asks that the US “stand up” and make it attractive to farm.

… Food Dyes and Sweeteners?: On January 15, 2025, the Food and Drug Administration (FDA) issued a ban on FD&C Red No. 3. Dongoski notes that this action trails more “progressive” synthetic color bans by the state of California, which is a “large economy by itself.” He adds that most food and beverage processors already were following California’s timelines. Meanwhile, it’s only a matter of time before more states institute similar rules. For example, West Virginia’s governor more recently signed a ban against as many as seven artificial food dyes. Meanwhile, there are as many as 20 to 25 more states “in the mix” for issuing similar bans and Dongoski says he would not be surprised if state regulators later shift and ban certain artificial sweeteners in favor to natural alternatives.

… GLP-1’s Impact on Wider Food, Nutrition Debate: Dongoski points to the rapidly shifting narrative of glucagon-like peptide-1 (GLP-1) and related drugs first developed to treat diabetes. He also cites the joint study by Cornell University and Numerator (consumer insights) that found that about 6% of the population is currently using GLP-1 medications and that these households also have cut grocery spending by about 6%. He notes that this spending drop could rapidly accelerate if GLP-1 drugs shift from expensive monthly injections to less expensive oral alternatives.

Looking at the impact on dietary behaviors, GLP-1 diets favor more protein, less sugar and sodium and reduced soda and alcohol consumption. He notes that Millennial and Gen Z consumers also are pursuing similar health goals and that the government’s “Make America Healthy Again” program also targets a similar nutritional profile. At the end of the day however, consumers’ actual buying behaviors will drive any sweeping change.

… Portfolio Strategy in the Wake of GLP-1: Dongoski regards GLP-1 discussion as another reason—for some companies—to re-evaluate business portfolio, product formulations and target consumers. If a processor’s target consumer is likely to be a GLP-1 user (for weight loss) and/or one focused on a more clean and natural diet, it’s time to assess the portfolio and decide if there are products that can be reformulated for GLP-1 guidelines or perhaps if the company needs to create a new brand altogether.

… Future Portfolio Strategy: Dongoski says big food, big name consumer products giants traditionally focus on $1 billion brands. “The question now is whether that’s the right target or perhaps if you’re better off to have 10, $100-million brands that are smaller in more targeted niche markets. The question is, “Can I get scale the same way with those brands as one $1 billion brand,” Dongoski says. “Candidly, those are the types of things we’re working on with our clients right now and we’re looking through their portfolios to see where [certain brands] fit long term…”