PepsiCo’s health pivot is a wake-up call for every brand adding claims

The company has publicly committed to transforming its product range in response to growing consumer demand for health and wellness options. Across brands including Lay’s, Quaker, Gatorade and Doritos, the focus is shifting toward fewer artificial ingredients, reduced sugar and sodium, and more functional additions – fibre, protein, whole grains, and hydration-focused formulations.

This is not a minor reformulation exercise. It is a signal about where the market is heading. And for smaller food brands watching from the sidelines, it is worth paying close attention, not just to the strategy, but to what it means for compliance.

The consumer shift is real, and the regulatory risk that comes with it is equally real

Consumers are no longer primarily seeking indulgence. The data increasingly shows that people want foods that offer something beyond taste, functional benefits like sustained energy, gut health support, or adequate protein. PepsiCo’s pivot reflects that reality at scale.

But here is what the marketing narrative tends to overlook: the moment a brand starts making claims about fibre, protein, reduced sugar or any other functional attribute, the compliance obligations change. Significantly.

In Australia, health claims and nutrition content claims on food labels are tightly regulated under Standard 1.2.7 of the Food Standards Code. A claim like “high in protein” or “good source of fibre” is not simply a marketing choice; it is a regulated statement with specific eligibility criteria, including nutrient thresholds that must be met per serve or per 100g, depending on the claim type.

Getting that wrong does not just create a legal risk. It creates a recall risk, a retailer rejection risk, and a reputational risk that can be very difficult to recover from.

What “better-for-you” claims actually require

The category of nutrition content claims is broader than many brands realise. Under the Food Standards Code, claims referencing the presence or absence of a nutrient, including comparative claims like “reduced sugar” or “more fibre”, trigger specific obligations around how the claim is worded, what conditions must be met, and what additional information must appear on the label.

For comparative claims in particular, there are requirements around the reference food, the quantified difference between the claimed food and the reference food, and how that comparison must be disclosed. A product labelled “25% less sodium” needs to identify what it is being compared to and disclose the actual numerical difference in sodium content between the two products,  not simply flag that a comparison exists.

Protein claims carry their own complexity. Under the Food Standards Code, a general protein claim, one that references protein without using a specific descriptor, requires at least 5g of protein per serve. A “good source of protein” claim requires at least 10g per serve. There is no “high protein” descriptor prescribed under the Code; brands using that phrase need to ensure it does not constitute a claim they cannot substantiate, or that it is not being treated as a nutrition content claim requiring a specific threshold that does not exist in the framework.

Fibre claims are similarly prescriptive. “Good source of dietary fibre” requires at least 4g per serve. “Excellent source of dietary fibre” requires at least 7g per serve. It is worth noting that “high fibre” is not a prescribed specific descriptor under the Code; brands using that language on pack should take advice on whether it constitutes a nutrition content claim and, if so, how it is being substantiated. These figures need to be verified against actual analytical data, not estimated from ingredient inputs.

The reformulation trap

There is a particular compliance risk that emerges specifically in the context of reformulation, and it is one that catches brands off guard more often than it should.

When a product is reformulated to meet the threshold for a nutrient content claim, other aspects of the nutritional profile may shift, creating new problems. Adding a fibre ingredient, for example, may affect carbohydrate labelling. Increasing protein content may change the energy value per serve. Using a different cooking oil may alter the saturated fat content in ways that affect eligibility for certain claims.

Labels are a system, not a collection of independent statements. A change in one place has flow-on consequences elsewhere, and every claim on a reformulated product needs to be reassessed from the ground up, not just the new one.

This is also where the Health Star Rating calculation becomes relevant for products that carry one. Reformulation can change a product’s HSR score, sometimes improving it and sometimes not. If a product carries an HSR calculated on the old formulation and the reformulation has not triggered a recalculation, the rating may no longer be accurate, which is itself a compliance issue.

What the PepsiCo pivot means for smaller brands

Large companies like PepsiCo have regulatory affairs teams, legal counsel, and nutrition scientists dedicated specifically to navigating these obligations. They are not immune to compliance errors, but they have significant infrastructure to catch and correct them.

Smaller and emerging food brands typically do not have that infrastructure. And yet the compliance obligations are identical.

The current trend toward functional, better-for-you positioning is creating real commercial opportunity for smaller brands. Consumers are actively seeking out products that offer something beyond indulgence, and the market is not yet crowded in many functional categories. But the compliance framework has not relaxed to match the pace of market innovation.

If anything, the increasing prevalence of better-for-you claims is drawing greater regulatory attention, from FSANZ, from the ACCC, and from retailers who are increasingly requiring evidence of label compliance before listing.

The bottom line

PepsiCo’s health pivot is a clear signal that the better-for-you trend is not a passing moment. Functional ingredients, fibre, protein, whole grains, and reduced sugar are becoming table stakes across the snack and beverage category.

But consumer appetite for functional products and regulatory tolerance for non-compliant claims are two very different things. The second a brand starts adding nutrition content claims to its packaging, it steps into a compliance environment that requires precision, evidence, and ongoing review.

Understanding what those claims actually require, before the label goes to print, is not overcautious. It is the minimum standard for operating in this space defensibly.

The better-for-you trend is creating real opportunity, and real compliance risk. If your product carries fibre, protein, reduced sugar or any other nutrition content claim, it is worth making sure those claims are watertight before they appear on a label. Download the free checklist, ” Six of the Most Common Label Errors on Better-For-You Products, and check your label before it becomes a problem.