Mandatory Ultraprocessed Food Labels Would Cost Industry $14 Billion a Year

A mandatory front-of-package label for ultraprocessed foods would cost the U.S. food industry an additional $14 billion annually, according to a University of Chicago study that puts the first full price tag on a proposal still under White House review.

The breakdown is concrete. Companies would spend $9.5 billion a year reformulating products, and ingredient costs would rise by $4.5 billion annually. The labeling mandate would reach 72% of packaged foods on shelves and cover 51% of consumers' grocery spending — a scope that touches nearly every category a food distributor handles, from snacks and beverages to frozen and shelf-stable goods.

What does this change for suppliers and distributors?

The short answer: cost pressure well before any rule takes effect. The study's $14 billion figure excludes litigation exposure, meaning the total financial risk to manufacturers — and, by extension, to the suppliers who must pass through reformulated ingredients and reworked SKUs — is likely higher. A reformulation of that scale would force inventory turns down temporarily as old formulations clear the channel and new ones ramp up, and would raise per-unit costs across a majority of packaged-food lines.

The study also quantifies second-order effects that reach beyond packaged-goods makers. A mandatory label would cost domestic agriculture $1 billion a year in lost revenue and increase food imports by up to $9.7 billion annually — a shift that would redirect sourcing volume from domestic commodity channels to importers and international suppliers.

The regulatory timeline behind the numbers

The analysis lands two months after the FDA submitted a proposed definition of ultraprocessed foods to the White House. The proposal would not be legally binding and remains under review. Defining ultraprocessed foods has become a focal point of Health and Human Services Secretary Robert F. Kennedy Jr.'s "Make America Healthy Again" initiative, though recent efforts to advance a definition have slowed following industry pushback.

Last week, more than 100 nutrition and medical experts signed an open letter to the Office of Management and Budget urging the administration to release its definition. "Releasing the proposed definition would not, on its own, impose new requirements on food producers or retailers, restrict the foods Americans can buy, or raise food prices," the letter stated. "It would, however, give families, businesses, and other stakeholders a common standard to inform their decisions."

Which definition drives the cost model

The University of Chicago team based its cost analysis on a definition put forward by Healthy Eating Research, a framework backed by major nutrition and health experts. That definition uses the Nova classification system, introduced by Brazilian researchers in 2009, which identifies ultraprocessed foods by the presence of specific ingredient markers of ultraprocessing. Products qualifying as healthy under the FDA's existing "healthy" claim criteria are exempt.

The distinction matters commercially. A marker-ingredient test exempts some products a blanket category rule would capture, which shapes exactly how much of the 72% of packaged foods a mandate would actually touch.

What the researchers concluded

The study, part of the university's Initiative on Enabling Choice and Competition in Health Care, identified what it called the "underlying core problem" in regulating ultraprocessed foods: "there is no clear relationship between processing and nutritiousness."

The researchers were blunt about the regulatory risk. "Consumer protection regulations like those intended for UPF are often well-intentioned but, because regulators lack an understanding of the regulated industry, often harm consumers," they wrote. "This could mean UPF regulations raise the cost of eating well while regulators claim a public health victory."

With the FDA proposal still pending at the White House and expert pressure mounting for its release, food manufacturers and their distribution partners face a decision point: begin reformulation planning against a $14 billion annual cost estimate, or wait for a definition that may arrive with no binding force at all.