Target Takes On Artificial Dyes In Major Grocery Reset | Fast Five Shorts

Target last week announced that it will only carry carry cereals made without certified synthetic colors at its stores by the end of May, putting itself ahead of most major food brands on the artificial dye removal timeline.

According to the Wall Street Journal, Target cited sales data and customer research showing a meaningful consumer shift towards food without artificial additives.

The move aligns with the broader Maha Make American healthy movement, with HHS Secretary RFK Jr having pushed to strip synthetic food dyes from the American diet.

Major manufacturers are already moving, but on longer timelines.

Kraft Heinz, for example, by the end of 2027.

W.K.

kellogg by also by the end of 2027.

And General Mills targeting summer of 2026 for its U.S. cereal portfolio.

Target's May deadline means it is not waiting for brand commitments.

It is pressuring brands to accelerate.

Said Chief Merchandising Officer Kara Sylvester.

Quote, we know consumers are increasingly prioritizing healthier lifestyles and we're moving quickly to evolve our offerings to meet their needs, end quote.

Joanna, you're going to start us off today.

Scale of 1 to 10, how much do you like this move from Target?

Oh, Chris, I'm going to go with, I know a scale of 1 to 10.

It's so hard depending on the dimensions, but I'll put a stake in the ground.

I'll.

I'll probably give this about a seven.

Okay.

And here's why.

I think on the surface, it's a strong signal.

You know, we're planting a flag, putting a stake in the ground, positioning Target in a clear stance on ingredient transparency and responding to, you know, their consumer demand for cleaner ingredients.

It also strategically aligns, it seems, with Target's broader effort to sharpen their merchandising and being more intentional about the assortment that it carries.

And that's something that Target's leadership has emphasized in their new growth strategy, which they released literally yesterday as they were, as they were talking about it.

They said in that release we want to lead with trend forward assortments that will help position us in our unique lean in retail.

And as they outline their 2026 growth strategies, the number one on the list was to lead with merchandising authority, having a differentiated and culturally relevant assortment.

And so it seems like based on those things, this is a step towards fulfilling that.

And being aggressive in the timeline is just trying to advance that.

And that puts them ahead of the timeline that Walmart had publicly come out with, which was early 27 for that requirement.

So, you know, adding a little, a little bit of pressure.

That having been said, I do think that execution risks are real here.

As we think about the reformulation, it does take time.

That's why companies you mentioned have, you know, 2026 summer or 2027 in their horizons because reformulation does take time.

And so even with this may deadline, there is a real possibility of sort of near term assortment gaps that may exist.

And Target will either have to provide substitute SKUs or lean further into their own private label in order to fill the aisle while the transition is occurring.

And cereal, as we know, is a pretty brand loyal category, especially for families.

And so if current legacy brands are sort of missing from the aisle or temporarily disappear, then Target needs to sort of carefully manage that, that shopper and at least keep them in the store for other, other things.

Now I do have a couple additional thoughts, but Chris, it sounded like you had something to add.

Yeah, no, I mean, I mean there's a, there's a lot to take in with this story.

I think.

You know, I think that's the key thing here.

And like, you know, I, I'm curious, I'm interested to hear you gave it a seven.

And I'm curious, like, because I've been, I've been debating what score I would give it to and just, and to steal the thunder, not to steal the thunder here, but to give an idea of like where my head is.

I went anywhere from like a five to an eight on this story.

And I'm curious, did you do the same thing, Joanna?

Was your like mind kind of going back and forth or like, were you originally lower?

You gave it a seven, Were you like a nine?

You brought it down to a seven.

Like talk us through the thought process here in terms of what are some of the considerations that you have in terms of liking this or not liking this or giving this above, above average grade, so to speak.

Yeah, I did, Chris.

I oscillated basically up and down the entire scale with the exception of 1 in 10.

Right.

And I did.

And I think, you know, I mentioned in my intro I'm an operations person.

So, you know, at heart I start thinking about the execution of it, what that means, how they're going to keep the aisles full while they transition.

Conversely, you know, the market tends to love brands that have a strong perspective and know what they stand for.

And that's something that we've seen Target kind of experiment a lot with a variety of initiatives over the past several years trying to sharpen their positioning.

I think that's an important question here is whether or not this is another experimentation or if this is really a strong stake in the ground as part of their growth.

The other thing, Chris, is, is it, is cereal the starting point or is it an exception?

And if we start walking the aisles, you know, are we going to start to see this come in as a rather fast follow?

Because now they're going to have to potentially stand behind it and say, we're going to make this a standard for our snack aisle.

We're going to do this in beverage.

Are we going to get out of grocery and do it in beauty and say we only carry clean beauty brands?

And so where does it end?

I'm not sure.

So, but I think as a starting point and trying to put pressure on a timeline that was already kind of out there, that was already being worked towards, was a moment to try and grasp at.

We are trying to pivot our merchandising assortments to, to something that some customers are saying is, is extremely important.

Yeah, you're bringing up really great points because when I first read this headline, I was like, I love it.

I love it.

From a differentiation perspective.

It keys in on the mom, the family, the healthy eating, like the demographic that Target has traditionally, you know, over indexed in.

But then as I got to thinking about, I got to think about your points.

Like, I'm like, but you're talking out of both sides, your mouth.

The snacks, the candy aisles are still there.

Like, what are you doing there?

And then the point for me, which, Cassie, I want to get you in here too, is like, I was like, is this actually going to be a traffic driver or is it going to be a traffic eliminator?

Because now I know I can't get the Fruit Loops or stuff that my family traditionally wants on my trip for the One Stop Shop.

And I don't, I don't actually know the answer to that question.

So, Cassie, what do you think?

Yeah, I've been thinking about that.

So I did read somewhere that I think about 85% of their sales are already clean for cereal.

So it feels a bit that there's an authenticity flag here that could be at risk.

So they're getting the credit for being this wellness leader.

But, you know, 85% are already supposedly clean.

But I mean, Chris, you brought up Fruit Loops.

That might be something that I know is put beyond their.

I think it's a 27 play that they're going to actually be clean if someone is coming in.

Joanna made the point that cereal is very specifically, you know, people are brand loyal.

If someone can't get their Fruit Loops, is that going to be something that they, you know, are going to choose Walmart instead for their groceries rather than doing Target.

But I think there is less of a risk here that they already are going to be able to have a significant portion of what's in their aisle.

Right now.

I don't know if it's actually going to be driving much traffic because once people come in for their first time, they see what most of what they can get already is already there.

They're not seeing much of a play.

But I think that authenticity risk is there.

It seems a bit performative in some ways, you know, if you don't extend it to other aisles.

You know, we brought up candy already that has a lot of dye in it.

So if they're not going to continue this, I think, you know, they'll get headline credit at first.

But, you know, is it a long term conversation?

I don't know.

And Cassie, to that point, is it serial also a declining category nationally?

Like, aren't people eating less and less cereal as well?

So that's part of this story too.

Yes, it's an easy first win.

It's kind of less at stake, I think.

But again, and they get that headline and I mean, it's great that they're starting to move and maybe this is a great way for them to test it out and see the impact there before they, they move on to categories that maybe are bigger drivers.

Wow.

Yeah, wow.

Cassie, Riding, going, bringing in some intel and some insight.

Wow, that's really good stuff.

Yeah, I never, I didn't even think about the performative nature of this announcement in the degree that you, you just described it.

The one thing I will say though is I think, you know, Joanna, you mentioned Michael Fedel's, you know, earnings investor day yesterday, basically.

And the one thing I did like is he said we are not going to try to be the everything grocer, which I think people have pressured Target to be for a long time.

So I'm glad to hear them finally say that because I've said on the show many times, I think that's a red herring of an idea.