How Will Fast Food Adjust To Trans-Fat Ban?

Tuesday, 5 Dec 2006 | 4:55 PM ET

As we've reported--New York became the first city in the U.S. to ban trans fats in restaurant food. But the ban will affect companies with a reach far beyond the Five Boroughs. Wendy’s International , McDonald’s, Kraft and Kellogg will all have to adjust as a result – at least in the near term – at the expense of their P&L sheets.

Trans Fat Impact
A look at the impact NYC's ban on trans fats will have on fast food companies, with Farha Aslam, Stephens Food Analyst; Jonathan Feeney, Wachovia Securities Analyst; and CNBC's Dylan Ratigan.

Dylan Ratigan had two food analysts on “Closing Bell” to discuss the issue. Farha Aslam of Stephen’s said that companies like Kellogg and Tyson Foods are viewing the legislation as a chance to innovate, create value and offer a more healthy product.

According to Jonathan Feeney of Wachovia Securities – companies like Kraft are wondering how consumers will adjust to the new taste of popular foods such as Oreos – whose flavor is largely attributed to trans-fats. Feeney says that Kellogg – with its strong line of healthy products – is in the best position to endure the transition.

“Changing the formulation and taste of 50 100-year-old brands changes the brand equity,” Feeney said. He thinks the law change will definitely have investment implications for these companies.

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  • With almost 30 years experience in business television, Bill Griffeth is co-anchor of the 3 p.m. ET hour of CNBC's "Closing Bell."

  • Kelly Evans

    Kelly Evans is an on-air correspondent, reporting across CNBC's business day programming. She is co-anchor of CNBC's "Squawk on the Street."