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How Will Fast Food Adjust To Trans-Fat Ban?


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

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.