By Jesse Newman and Owen Tucker-Smith

BATTLE CREEK, Mich. -- Executives from Italian food giant Ferrero hopscotched around the U.S. in late June, touring cereal factories at the center of one of the most unusual public-health controversies in years.

President Trump's top health official, Robert F. Kennedy Jr., had said the artificial dyes in WK Kellogg's Froot Loops, a fixture in grocery store cereal aisles since 1963, were poisoning America's children.

Ferrero had offered to buy the 119-year-old cereal business, which was struggling. But acquiring Kellogg meant stepping into a political mess. Kennedy had vowed to crack down on processed food, and was blasting big food companies for using the dyes and other additives.

After weighing Kellogg's financial and political problems, Ferrero cut its offer by about $75 million, according to a recent securities filing, agreeing to buy the company in a deal that valued it at about $3.1 billion.

The Trump administration's "Make America Healthy Again" agenda has shaken big food companies already reeling from shifting consumer preferences. States across the country have taken up the MAHA cause, passing laws to restrict the sale of certain foods and, in some cases, investigating food companies' health claims.

Executives at big processed-food makers are trying to determine how much of what Kennedy and MAHA want will actually happen, and how it could affect their bottom lines. Their challenge is to balance his push for what he sees as healthier food with their need to make products that consumers will buy.

Some companies have assembled special teams to navigate MAHA, drawing up lists and "heat maps" to track ingredients coming under scrutiny, and assessing which ones they might have to remove or label. Executives have compared dealing with MAHA to battling the mythical Hydra -- cut off one head and two more spring up.

"Every day I wake up to something new being proposed," said Darren O'Brien, chief corporate and government affairs officer for Oreo-maker Mondelez, which uses ingredients that Kennedy has criticized, including artificial dyes, emulsifiers and seed oils.

Beginning in June, a string of companies including Kraft Heinz, General Mills and Nestlé pledged to remove artificial dyes from their U.S. products. Candy-maker Mars said recently that it would offer some M&M's, Skittles and other sweets without the dyes next year. The Consumer Brands Association, a major industry trade group, encouraged food and beverage makers to nix the dyes by the end of 2027.

Makers of old-line brands like Lunchables, Twinkies and Trix were struggling long before Kennedy arrived in Washington to head the Department of Health and Human Services. Sales have slumped for many big food companies that sharply increased their prices in recent years. Climbing costs , soaring use of weight-loss drugs, heightened scrutiny over ultraprocessed foods and growing consumer demand for fresher, healthier fare are compounding the challenges.

An S&P index tracking packaged food and meat companies has fallen about 16% over the past year, while the overall market gained about 14%.

Food companies are making big moves to adjust. Kraft Heinz is preparing to split into two companies, following a big merger of brands a decade ago. Conagra and General Mills shed legacy brands such as Chef Boyardee and Yoplait. At least five major food companies have announced this year that they plan to replace their CEOs, setting up the highest C-suite turnover in at least a decade, according to JPMorgan Chase.

An HHS spokesman said that Kennedy values ongoing engagement with the food industry and is encouraged by the steps many companies are taking to improve nutrition and public health.

Corn Flake king to target

Since the early 20th century, Kellogg has been nearly synonymous with Battle Creek -- also known as Cereal City -- with its sprawling factory spreading the aroma of toasted grain around town.

Founded in 1906 as the Battle Creek Toasted Corn Flake Company, Kellogg pioneered vitamin-fortified cereal and produced K-rations for U.S. troops during World War II. Tony the Tiger and Toucan Sam, the mascots of Frosted Flakes and Froot Loops, were known to generations of children.

But Americans have fallen out of love with breakfast cereal, causing problems for Kellogg. The company had ballooned in size over the years, adding snack brands such as Pop Tarts, Pringles and Cheez-Its. In 2023, Kellogg Co. separated its North American cereal business from snacks, renaming it WK Kellogg -- and it has posted year-over-year sales declines in every quarter since.

Kennedy made Froot Loops an early target in his MAHA campaign. He chastised the cereal giant for using artificial dyes in the U.S., while selling cereal with naturally derived colors across the border in Canada.

Last fall, Kennedy confidante Vani Hari, a food activist who calls herself the Food Babe and has 2.3 million Instagram followers, led a protest outside Kellogg's headquarters, with demonstrators carrying signs that read "ditch the dyes" and "stop poisoning us."

Hari also took her fight to Capitol Hill and state legislatures. At hearings, she displayed different boxes of Froot Loops, and she has accused Kellogg of selling a less safe product to American children.

Hari has targeted Pilnick himself in social-media posts, such as one showing a fake package for a Pilnick Halloween costume, labeled as including "poisonous artificial dyes" and "cancer and obesity."

Pilnick, who is 60 years old, hasn't publicly pushed back. "Sometimes you would rather not be in the news," he said last year.

Kellogg and other food companies have said artificial dyes are safe and highly regulated. Kellogg has said that the vast majority of its sales come from cereals that don't contain artificial colors, and that it offered different versions of its products internationally because consumers' preferences vary across markets.

A Kellogg spokeswoman said that the company agrees with the Trump administration's focus on health and wellness, and that it has changed its cereals over time to suit consumers' changing tastes, such as offering more whole grains and fiber and less sugar and sodium.

Most of its cereals, she said, start with a grain that is puffed, toasted, flaked or shredded, and many contain just four ingredients plus vitamins and minerals, which the company has begun noting on some packaging.

For a product like Froot Loops, removing artificial dyes from the cereal sold in the U.S. wouldn't be simple.

In Canada, the dough for Kellogg's traditional Froot Loops is made at a plant in Belleville, Ontario, using coloring derived from carrots, watermelon and blueberries. (Its marshmallow version uses artificial dyes.) To switch to natural dyes in the U.S., Kellogg would need to secure huge quantities of new ingredients and retool parts of its plants, installing new pumps and other equipment.

Kellogg announced a decade ago that it would remove artificial colors and flavors from its branded cereals by the end of 2018. But naturally dyed Froot Loops didn't test well with consumers.

'Stages of grief'

Shortly after Trump's re-election, food industry lobbyists began mounting a defense on Capitol Hill. Early on, some focused on "MAHA-curious" lawmakers they thought might be sympathetic to the agenda, according to a person familiar with the matter. They told them the industry works to produce safe, convenient and affordable food, and in some cases they brought in-house scientists to explain what certain ingredients actually do.

CBA, the food-industry trade group, called for policies grounded in science and common sense. The group set up a meeting in March between Kennedy and the CEOs of major food companies.

Kennedy asked that Kellogg's Pilnick attend, according to people familiar with the matter. During the meeting, Pilnick sat at a conference table near the CEOs of Tyson Foods and J.M. Smucker. Kennedy made one of his top priorities clear: Artificial dyes must go. Pilnick posed for pictures with Kennedy.

Inside the Consumer Brand Association, food company executives were split over how to navigate the situation, according to people familiar with the matter. Some went through multiple "stages of grief" before deciding to remove artificial dyes from their products, one of the people said. Others have resisted any retreat, urging the group to mount a stronger defense.

Later in March, CBA brought Kennedy a proposal. The group said its members would work to phase out artificial dyes from foods, and asked for the administration's help on issues from natural dyes to tariffs, according to a document reviewed by The Wall Street Journal.

Atop CBA's wishlist was for Kennedy to help prevent a patchwork of state laws with different requirements on artificial dyes, food additives and other matters.

Kennedy hasn't done that. Instead, he publicly thanked the governors of states that have tightened food regulation, crediting them with giving HHS more leverage over food companies.

For Kellogg, the prospect of removing artificial dyes adds to financial pressures at a time when cereal, once a mainstay of American breakfast tables, is in decline. For more than a decade, consumers have been trading their cereal bowls for yogurt, bars, shakes and other such fare.

In the 12 months ending Aug. 9, U.S. consumers spent $197 million less on ready-to-eat cereal than they did in the year-earlier period, according to market-research firm NielsenIQ. In a 2023 survey, 39% of American adults reported that they eat heavily sweetened cold cereal such as Froot Loops, according to research firm Mintel. In this year's survey, that figure has fallen to 31%.

Cereal's lackluster outlook helped spur Kellogg Co.'s move to separate cereal from its larger and faster-growing snacks business, which it named Kellanova. That move effectively put a for-sale sign on the cereal business.

Ferrero, whose sprawling portfolio includes Nutella and Tic Tacs, approached Kellogg in April, according to the recent security filing. The two companies had done business before. In 2019, Ferrero bought Kellogg's Keebler cookie business and other brands for $1.3 billion.

The 79-year old, family-owned company has been scooping up other U.S. brands, including Butterfinger candy bars and Blue Bunny ice cream. Executive Chairman Giovanni Ferrero, grandson of Ferrero's founder, was behind a corporate overhaul that has led to the dealmaking spree.

Ferrero believes the cereal aisle has suffered from a lack of innovation, an area the company considers a strength, according to people familiar with the matter.

Over time, Kellogg's posture on artificial dyes changed. In April, Kellogg said it planned to remove dyes from products made for schools. The company also said that it would work with federal officials to ultimately remove them from all its products.

Ferrero executives ultimately determined that they could handle MAHA. Costs to reformulate Kellogg products appeared manageable, and executives felt reassured by their experience in Europe, where they have worked to comply with tighter regulations. They also don't see Kellogg's problems as unique -- much of the food industry faces the same pressures.

A private-equity firm also bid for Kellogg, according to people familiar with the matter. Early in the morning on July 10, Kellogg's board of directors agreed to sell the company to Ferrero for roughly $3 billion.

Later that day, Pilnick addressed employees in a town hall at Kellogg's headquarters. Executives said that Kellogg's planned investment in the local cereal plant would continue.

A week later, Kellogg said it would remove artificial dyes from all its products by the end of 2027.

"Froot Loops is finally following its nose -- toward common sense," Kennedy said on X. He called on more companies to follow suit.

Write to Jesse Newman at jesse.newman@wsj.com and Owen Tucker-Smith at Owen.Tucker-Smith@wsj.com

(END) Dow Jones Newswires

August 25, 2025 21:00 ET (01:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.