Ultraprocessed Food Labels Could Cost Industry $14B a Year

Front-of-package labels for ultraprocessed foods would cost the U.S. food industry an additional $14 billion a year, according to a University of Chicago study.

The estimate breaks down into two parts. Companies would spend $9.5 billion annually to reformulate products. Higher ingredient costs would add another $4.5 billion. The study says a labeling mandate would apply to 72% of packaged foods and cover 51% of consumers' grocery spending.

The analysis landed two months after the FDA submitted a proposed definition of ultraprocessed foods to the White House. The proposal is not legally binding. It remains under review.

What is driving the push for a definition?

Defining ultraprocessed foods has become a focal point of Health and Human Services Secretary Robert F. Kennedy Jr.'s "Make America Healthy Again" initiative. 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. The letter urged the administration to release its ultraprocessed food definition.

The experts argue a definition would guide consumer choices without imposing costs. "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 states. "It would, however, give families, businesses, and other stakeholders a common standard to inform their decisions."

How did researchers define ultraprocessed?

The University of Chicago study used a definition from Healthy Eating Research, an organization with backing from major nutrition and health experts. That definition relies on the Nova classification system, introduced by Brazilian researchers in 2009.

Under this approach, ultraprocessed foods are identified by specific ingredients that serve as markers for ultraprocessing. Items that qualify as part of a healthy diet under the FDA's "healthy" claim criteria are exempt from the label.

What costs does the $14 billion figure exclude?

The estimate leaves out litigation entirely. Researchers also looked beyond the food industry itself.

A mandatory label would cost domestic agriculture $1 billion a year in lost revenue, the study found. Food imports would rise by up to $9.7 billion a year.

The study is part of the university's Initiative on Enabling Choice and Competition in Health Care. It identifies an "underlying core problem" for regulators: "there is no clear relationship between processing and nutritiousness."

Researchers warned that rules written without industry understanding can backfire on the consumers they aim to protect. "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 said. "This could mean UPF regulations raise the cost of eating well while regulators claim a public health victory."

For food marketers, the stakes are now concrete: a labeling mandate covering three-quarters of packaged foods would reshape formulation budgets, ingredient sourcing and import volumes across the grocery aisle — and the number could grow further once litigation risk enters the picture.