How Will Fast Food Adjust To Trans-Fat Ban?
Web Editor, "Mad Money"
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.
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.