A landmark lawsuit filed by the San Francisco City Attorney’s Office against some of the United States’ largest food manufacturers is poised to create ripple effects across the global retail sector.
The legal action targets companies such as Kraft Heinz Company, Mondelez International, The Coca-Cola Company, PepsiCo, Nestlé USA, General Mills, Kellogg Company, Mars, Incorporated and ConAgra Brands, accusing them of producing and marketing “ultra-processed foods” (UPFs) in a way that misleads consumers and contributes to public health burdens.
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The case, the first of its kind by a U.S. municipality, seeks civil penalties, restitution and an injunction against deceptive marketing practices.
What are ultra-processed foods — and why they matter for retailers
Ultra-processed foods are industrially manufactured items that contain additives, preservatives, and ingredients seldom used in home cooking. They typically offer long shelf-life, convenience and low cost compared with fresh or minimally processed foods.
Health research, increasingly cited by regulators and litigators, links high UPF consumption to obesity, type 2 diabetes, cancer and other chronic diseases.
For retailers, UPFs have long formed a significant portion of store inventory. Their long shelf life, high margins and strong consumer demand have made them staples of supermarket, convenience store and grocery-chain sales.
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By GlobalDataA shift in regulation or consumer perception could upend that model: retailers may need to adjust product mix, stocking practices or sourcing strategies to remain compliant and responsive to changing demand.
Implications of the lawsuit for retail supply chains and merchandising
The lawsuit argues these firms engaged in “unfair and deceptive acts” when marketing UPFs, especially to vulnerable groups including children and low-income communities.
If the court rules in favour of the plaintiffs, companies may face restrictions on packaging, marketing claims (e.g. “healthy snack”) and distribution practices.
Retailers sourcing from those companies might find themselves under new regulatory obligations — such as removing certain products, reorganising shelf placement, or reformulating supply contracts.
Manufacturers may reformulate products (reducing additives or reworking recipes), or shift their portfolio toward less-processed items. Retailers could take the opportunity to expand ranges of minimally processed or “clean-label” alternatives — potentially affecting overall product mix and profitability.
Changing consumer sentiment and long-term retail trends
Public awareness of UPF health risks has surged recently, driven in part by a widely reported scientific review linking UPFs to damage across major organ systems.
As consumers — especially in health-conscious markets like Europe — become more cautious about additives and processed foods, demand may shift toward fresh, minimally processed, or locally sourced products.
Retailers that adapt early to this shift could gain competitive advantage, while those heavily reliant on UPF sales might face reputational and sales pressure.
In regions where labelling systems exist or emerge — for instance via voluntary schemes like Nutri-Score — retailers may also need to align with new transparency standards.
Though the lawsuit originates in the US, its implications extend beyond national borders. Retailers across Europe and globally should monitor developments closely — legal rulings, regulatory changes and shifting consumer preferences could transform how processed foods are marketed, stocked and sold.
