Worsening global trends in diet-related disease burden and obesity demonstrate that improving diet is immensely difficult. The Australian Dietary Guidelines underpin all evidence-based dietary advice provided in Australia. However, as a public health tool to drive healthy eating, getting consumers to follow the Guidelines has proven extremely difficult. Very few Australians follow the Guidelines, with overconsumption of ‘discretionary’ food and drink a major barrier. A paradigm shift using level-of-processing to convey the health risks associated with ultra-processed foods and drinks may be an effective communication strategy to improve diet quality. A nationally representative online survey of 1505 Australians (aged 18 years and over) was undertaken to test whether consumers’ understanding of dietary risk improves when using an innovative level-of-processing approach compared to the recommendation in the Australian Dietary Guidelines to limit discretionary foods. Results indicated that the level-of-processing format was generally perceived as more effective than the dietary guidelines infographic at communicating dietary risk. Curbing overconsumption of unhealthy foods and drinks is a global priority. Conveying dietary risk using a level-of-processing approach that focuses on reducing ultra-processed food and drink consumption offers a path forward. It does this through simplified messaging and a framework for policy action.