SNAP Cuts Take $10bn Out of US Grocery: What Falling Volumes Mean for Food and Beverage Brands

I keep seeing the same ending. A food firm covers a soft year with price, books it as growth, then finds the shopper gone.

The cover has now run out in the US. Bain and NielsenIQ put June units down 1.8% on the year before. In June 2025 units rose 0.1%. Prices are still climbing 2% to 3%. Price rises can no longer hide the fact that shoppers are buying fewer packs.

A ten billion dollar hole in the food aid budget

Circana traced most of the drop to one change in the law. HR 1 passed in July 2025 and changed who qualifies for SNAP, the US food aid scheme. The new rules took effect on 1 February 2026 and checks began a month later.

Sign-ups fell fast. Circana counted a drop of about two million homes in the first quarter, close to 11% down on the year. Federal counts show 36.6m people on the scheme in May, against 42.2m a year earlier. Circana puts the lost EBT funds at about $10bn in 2026 against 2025.

The share figures are starker. Baskets paid with SNAP funds were about 10.4% of all US retail food and drink dollars two years ago. That is now 7.3%. Trip share fell from about 8% to under 6%. Three points of the whole US food and drink pool have left one payment type in two years.

The loss sits in a handful of aisles

One US-wide number hides where the money left. NIQ asked SNAP shoppers what they would change. 65% said they would buy less of at least one big shelf. That list runs through cookies, bakery, chocolate, frozen dinners, condiments, sweets and ready meals.

79% said they would buy more of at least one staple. That list is bread, eggs, milk, cheese, rice, cereal, water, fresh produce and poultry. Circana's basket read matches it. Fresh produce and chilled meat grew as a share of SNAP trips, while deli fell back.

The waiver states make the point sharper. Eight states blocked fizzy drinks from benefits. In those states the share of SNAP trips carrying that shelf fell nine points in a year. Spend per home dropped from $159 to $146. Of the $13 that moved, 81% went into food rather than other drinks.

The shopper has also changed store

This is the part that lands hardest on brand owners. FMI ran its 2026 shopper study in February. 37% of US shoppers now name a mass chain as their main food store, against 36% for a supermarket. Mass gained six points in a year. The two have drawn level for the first time.

Circana found mass chains take the biggest share of SNAP trips, with dollar stores next. Pure e-commerce grew SNAP spend by more than 31%, close to twice the rate seen elsewhere.

A mass chain carries a shorter shelf than a supermarket. So a brand losing units is also walking into a store with fewer slots. The tail of the range goes first.

Price has stopped working as a lever

Bain's shopper pulse says 80% of US shoppers are still trying to spend less. 28% are cutting back on food itself. Of those, 56% are trading down to cheaper brands. 49% are simply buying fewer packs, and 44% lean harder on deals.

Food prices are up 33% since 2019, so the shopper is counting. Every point of price now buys back a point of units. Circana's Sally Lyons Wyatt told the trade to build 2027 plans around a smaller, lower-benefit SNAP base. Her line was blunt. "This is really the new baseline," she said.

What operators and buyers should take from this

The useful part of this story is that it can be modelled. A slump is vague. A $10bn withdrawal with a start date, a state map and a shelf list is a forecast. A firm with heavy weight in sweets, biscuits, frozen meals or chilled deli can size its own hole this quarter.

Two moves follow from that. Price per trip matters more than price per kilo now, so entry packs and multipacks need a fresh look. And the shelf plan has to follow the shopper into mass and dollar. Slots there are fewer and own label is stronger. Any firm treating this as a dip will plan 2027 against a shopper base that has already gone.