Walmart says it will remove synthetic food dyes and several other additives from all of its store brands by 2027. That includes private labels like Bettergoods and Great Value, the most popular in-store brand in America. The mega-retailer joins food companies like Kraft-Heinz, Hershey, General Mills and Conagra (which reports earnings today) in pledging to eliminate artificial coloring from food products. 

Earlier this year, Health and Human Services Secretary Robert F. Kennedy Jr. pressured the industry to phase out synthetic food dyes but stopped short of an outright ban. Walmart said 90% of its products are already free of these additives, but even a 10% change for a retailer as massive as Walmart can have a big effect on the industry.

Walmart dominates grocery sales in the U.S., and its competitors aren’t even close. The retailer gobbles up almost a quarter of the market share, said analyst Arun Sundaram at CFRA Research.

“So, there's a pretty large gap between Walmart and the rest of the grocery industry,” Sundaram said.

He said their private labels have been a driver of growth in recent years as inflation-weary consumers hunt for deals, so any changes to those products are sure to make waves.

“It's a sign of where consumers are heading, where grocery retailers are heading. And you're probably going to hear other retailers follow suit,” said Sundaram.

Walmart has transformed the food landscape before, like when it leaned into organics in the mid-2000s. Phil Lempert at Supermarket Guru said Walmart helped bring that once-niche market mainstream.

“It blew it up. Now, about 80% of all consumers buy some organic foods, and a lot of them are buying it from Walmart,” Lempert said.

But the surge in demand for organic products also blew up the supply chain of what had been mostly smaller scale farms, said Marion Nestle, professor emeritus of nutrition and food studies at NYU. 

“Well, it became industrialized, and the big producers pushed the Organic Standards Board to relax requirements,” Nestle said.

The sudden switch to natural food colorings could also challenge supply chains said David Schoneker, a food industry consultant and former president of the International Association of Color Manufacturers.

Take for instance carmine, a natural substitute for synthetic red dye used in sauces and baked goods.

“Carmine is made from the cochineal, the female cochineal insect that only grows on cactuses in Peru, the Canary Islands and a little bit in Mexico,” Schoneker said. “OK, there's only so many of those cactuses.”

He says more competition for natural dyes like carmine, could mean higher prices for red velvet cake.