Sales of sugary beverages and candy plummets in states that prevent low income shoppers from using government nutrition assistance to buy select products legislators deem ‘unhealthy,’ according to new data from digital promotions platform Ibotta.
Beginning Jan. 1, Indiana, Iowa, Nebraska, Utah and West Virginia no longer allow Supplemental Nutrition Assistance Program funds to pay for a range of products considered ‘unhealthy’ as part of a pilot program promoted by USDA, which oversees the nutrition assistance program.
Across the first cohort of states to enact these waivers, purchases of sugary beverages and candy by SNAP shoppers declined at roughly twice the rate of SNAP purchases in non-restricted states after Jan. 1, according to Ibotta.
Ibotta tracked purchases across its full shopper base from November–December 2025 with January–February 2026. The data set compared how overall purchasing behavior by SNAP recipients changed in waiver states versus non-waiver states before and after the restrictions were put in place.
Ibotta’s performance network spans Walmart, Instacart, DoorDash and Dollar General, among other retail platforms, allowing the firm to measure digital and in-store purchases.
A 2x decline of sugary beverages and candy in waiver states
Sugary beverage purchases from SNAP beneficiaries in the first five waiver states declined approximately 15% compared with a 7.5% decline in SNAP purchases without restrictions, per Ibotta data. Candy followed a similar pattern, with SNAP purchases down 19.5% in waiver states versus a 9.5% decline nationally.
The significance of the decline reflects how SNAP policy changes are compounding challenges already threatening sugary categories, explained Chris Riedy, Ibotta’s chief revenue officer.
SNAP shoppers are buying less – not opting out entirely
While candy and soda purchases by SNAP shoppers are lower, they are not eliminated altogether, Riedy said. Instead, Ibotta’s data shows they are buying these products less frequently and in smaller volumes, especially in waiver states.
Nationally, broader shifts toward moderation and health-conscious consumption are correlated to a decline in sugary foods and beverages, per Ibotta. In waiver states, however, that decline is more pronounced, suggesting that the loss of SNAP eligibility is intensifying existing purchasing behavior rather than creating an entirely new one.
Brand loyalty weakens without value messaging
One of the more notable implications for CPG brands is how quickly brand loyalty erodes when SNAP eligibility is removed.
Ibotta’s consumer feedback shows that roughly 40% of SNAP shoppers say they would continue purchasing their preferred national brand without SNAP support. Approximately 60% report they would trade down to private label or seek alternative options to manage costs.
The growing competitiveness of private label products also attracts SNAP shoppers. Cleaner labels, sustainability claims and improved quality along with a lower price point are narrowing the sales and unit gap between store brands and national brands – especially when the price differences are wider between the two.
Price sensitivity alone does not fully explain the shift in purchasing behavior among SNAP shoppers, regardless of value driving their decisions in the store, Riedy said. Because consumers are becoming more health conscious, products that lean into “better-for-you” positioning are seeing stronger performance (even if those products are higher in price point), according to Ibotta.
Spillover effects: Powdered beverages and pack-size expansion
Substitutions are another behavior correlated with the waivers, according to Ibotta. In states where sugary beverages are no longer SNAP-eligible, Ibotta has recorded an increase in purchases of powdered beverage mixes, suggesting SNAP shoppers are actively seeking eligible alternatives, Riedy noted.
At the same time, shoppers who remain loyal to national brands are increasingly managing budgets by changing pack-size behavior. Larger multi-packs are gaining traction because they reduce the price per unit, allowing consumers to maintain brand preferences while adjusting to tighter constraints, he added.
How CPG manufacturers are responding
Manufacturers are responding in real time as they assess how best to stabilize demand. Pricing and pack architecture teams are reevaluating unit economics and testing new sizes and price points that align more closely with SNAP-ineligible shoppers’ budgets, Riedy explained.
“Everybody right now is trying to figure out what is the optimal price-slash-pack size equation,” he emphasized.
Promotions, particularly digital cash-back offers, have become a key lever to drive conversions. Roughly six in 10 of all shoppers now expect a digital offer when purchasing national brands, with conversion becoming less likely without it, according to Ibotta. Unlike packaging changes, promotions can be implemented quickly and adjusted in real time based on performance, Riedy noted.
Innovation and reformulation, albeit more time and cost-intensive, can play a role in capturing SNAP shoppers’ business. Brands that focus exclusively on price optimization risk weakening their positioning if they fail to respond to growing consumer interest in ingredient transparency and perceived health benefits, Riedy said.
What happens when larger states follow
While the first wave of waiver states offered an early indication of SNAP shopper behavior, their combined market size remains relatively small, Riedy said. Larger states such as Texas represent a far greater share of SNAP-related purchases.
Based on Ibotta’s observations, Reidy expects similar impacts among larger states for SNAP shoppers, which is roughly a double decline compared to national trends, though the absolute volume implications could be substantially larger. For manufacturers, the early SNAP waiver data provides clarity and urgency as additional states consider similar policy changes.
