Advertising fast food to children

Leading fast food companies have pledged to follow specific advertising guidelines under the Children's Food and Beverage Advertising Initiative (CFBAI), a project of the Council of Better Business Bureaus (BBB).

These voluntary pledges remain quite weak. One recent summary of the argument that these pledges are insufficient [note: slight edit for clarity Apr 5] comes from the Rudd Center for Food Policy and Obesity at Yale University. The companies describe the pledges in shorthand, saying loosely that they now advertise only healthy food to children. In truth, more precisely, the companies still advertise both unhealthy and healthy food choices to children.

For example, a company pledge may claim to show only children's meals with comparatively healthy sides and beverages (such as apple slices and milk) and not less healthy options (such as french fries and sugary soda). Even with no further deception, the advertisements for the healthy meals help build brand awareness with children, increasing probability of generating a purchase occasion. Once the child and guardian are in the restaurant, the company heavily markets apple slices and french fries, milk and soda, whatever it takes to make the sale. The CFBAI guidelines address advertising on television and the web and do not prevent marketing of unhealthy options at the point of purchase, so the unhealthy options remain a large fraction of actual revenues for children's meals.

And, in any case, there is further deception. New research supported by the Robert Wood Johnson Foundation finds that most children who view Burger King advertisements showing apple slices think the advertisement is showing french fries. The apple slices look like french fries, and the children overlook a small apple symbol on the package.

I do not believe the confusion is accidental. Reason Magazine's Hit and Run blog credulously accepts an account in which the children's misunderstanding merely shows that Burger King is effectively marketing apples by presenting them in an "apple fries" format, but that sounds like spin to me.

You can judge for yourself. Here is the actual video from the research team, led by James Sargent, MD, co-director Cancer Control Research Program at Norris Cotton Cancer Center. Ask yourself, is Burger King advertising only apples (as the company's CFBAI pledge claims), or is Burger King also in practice advertising french fries to children (in which case the company's CFBAI pledge is dishonest)?

I'm enough of an economist that a fast food company's marketing fails to outrage me. I expect Burger King to market burgers and fries as vigorously as it can, subject to the dual limitations of government rules and social norms. What bothers me instead is that organizations that purport to be independent referees serving the public interest -- such as CFBAI -- pretend that the fast food companies really have voluntarily ended their advertising of unhealthy food to children. It is admirable to seek market-oriented business-friendly solutions to social problems, but let's not deceive ourselves by claiming that marketing unhealthy food to children is a problem we already have under control.

New research on breakfast in the classroom

Educators and school nutrition personnel in recent years have been discussing and debating the merits of serving breakfast in the classroom at the start of the school day, rather than in cafeterias. Participation is higher for breakfast in the classroom, leading to high hopes for increased impact on beneficial health and learning outcomes, while at the same time raising concerns about over-consumption for children whose in-class breakfast is their second meal of the morning.

New research in the Journal of Policy Analysis and Management uses a "difference in difference" design before and after implementation in a large urban school district in the southwest, finding that breakfast in the classroom rather than the cafeteria has a positive effect on test scores. It is possible that the benefits are due to improved performance on the day of the test (perhaps because the kids were less hungry that morning) rather than longer term learning, but the favorable results are still notable.

This research, and related research, is discussed in a new video from ChildObesity180, an initiative led by Christina Economos and many colleagues here at the Friedman School at Tufts. This video, which briefly summarizes both sides of the debate before arguing in favor of breakfast in the classroom, is part of an extensive video series on school breakfast issues.

Economists and the restaurant industry offer input on the minimum wage debate

With support from the Obama administration, Congress is contemplating an increase in the minimum wage, in small annual steps to $10.10 per hour by 2016. After that, the minimum wage would rise automatically with inflation.

A group of several hundred economists signed a letter of support sponsored by the Economic Policy Institute. The letter said the proposal would help 17 million workers directly, and perhaps another 11 million workers by boosting wage expectations at the low end of the labor market. The letter said the weight of recent research shows "that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market."

A competing group of several hundred economists signed a letter of opposition. The letter says the consequence of the minimum wage proposal is "that business owners saddled with a higher cost of labor will need to cut costs, or pass the increase to their consumers in order to make ends meet. Many of the businesses that pay their workers minimum wage operate on extremely tight profit margins, with any increase in the cost of labor threatening this delicate balance."

In my own profession, several leading agricultural and applied economists signed each letter.

The New York Times this week pointed out that the letter of opposition was not really written by Vernon Smith, the lead signatory, who is a Nobel-winning economist. The letter was circulated by a firm hired by the National Restaurant Association (NRA), which has much to lose from the new minimum wage proposal. Smith is quoted saying he hadn't known who originated the statement, but he didn't mind that it turned out to be the restaurant industry, because the content of the letter is what mattered.

I asked a couple of my favorite agricultural and applied economists who had signed each letter if they wanted to respond to the controversy. One who signed the letter of support just confirmed that he supported the proposed minimum wage increase, but preferred not to say more.

Dan Sumner, a leading food policy thinker and economist at UC Davis, who signed the letter of opposition, gave this response. I had asked him if he felt "ill-used" by the restaurant industry. His email tackles the concern that the NRA support was non-transparent, discusses anti-poverty policies he judges superior to the minimum wage, and casts the minimum wage unfavorably in the context of other governmental efforts to set prices.

Parke:

I just assumed the min wage letter was developed and circulated by an interest group. Interest groups are the ones with enough interest to organize such an effort.

But, like Lucas and Smith, the proposition and argument itself is what matters to me. I have no connection with fast food places.

I put the minimum wage in the category with farm subsidies as a silly policy ill-targeted and worse than worthless for three reasons.

a. It uses policy resources, effort and attention, that would be better spent doing effective things to help the poor, such as earned income credits or targeted education programs or quality day-care or ...

b. It sends the signal that government price fixing is good policy more broadly. I know from my own specialty that government-set prices are generally bad policy. Thinking we can fix labor market problems or ill-trained workers or any other problem by having members of Congress set some favored price based on what their favorite lobby says it should be just encourages shoddy thinking.

(You will recall that is my problem with the press and the Congress continuing to act as though food stamps had anything to do with food. The reason I like the SNAP program is that is is unrelated to nutrition and the nanny notion that the feds should tell people how to spend their money, even charity.)

c. Minimum wage is so ill targeted as a poverty program and really does make it harder for some poor gal with very little to offer to get that first job. If I have to pay $10 anyway I can turn her away and hire only her sharper cousin, who already had a leg up.

Anyway, that's my off the cuff thinking.

By the way, the interest groups I have least time for are the ideological lobby groups and NGOs that seem to be very loose with the facts and analysis. These range from Heritage to HSUS to the Union of Concerned Scientists. My sense is these folks are just as likely to have an underlying bias to everything they do, and they pretend they act in the "public interest" relative to firms and groups of firms who have clear financial motivations.

Dan

USDA estimates that 31% of the food supply is lost and uneaten

A new report from USDA's Economic Research Service finds:

In the United States, 31 percent—or 133 billion pounds—of the 430 billion pounds of the available food supply at the retail and consumer levels in 2010 went uneaten. The estimated value of this food loss was $161.6 billion using retail prices. For the first time, ERS estimated the calories associated with food loss: 141 trillion in 2010, or 1,249 calories per capita per day.

The food policy of Hampton Creek's "Just Mayo"

"Just Mayo" from Hampton Creek is a vegetable oil spread offering a new vegan egg-free alternative to traditional mayonnaise. For people who follow food policy, it generates a pile of interesting things to think about, including: (1) food industry innovation, (2) nutrition content, (3) food labeling for people who care about animal welfare and the environment, and (4) standards of identity. 

I heard about Just Mayo from a recent Friedman School alum, who works in marketing for the company and who now has hired some current students on her marketing team. Josh Balk, from the Humane Society of the United States, who spoke at the Friedman School last year, is one of the founders.

(1) In part because of interest from Bill Gates in alternatives to eggs, Just Mayo has been heavily covered in the business and technology press. According to Forbes in December, Gates backs Hampton Creek as one of a handful of companies that may transform the food system. The New York Times last year described the investment of venture capitalists in the start-up. Bloomberg BusinessWeek in October focused on Just Mayo's recent success in getting shelf space in Whole Foods.

(2) Part of the consumer motivation for choosing an egg-free product is likely to be nutrition goals. Like traditional mayonnaise, Just Mayo is a high-fat high-calorie vegetable spread. Its role in a healthy diet likely depends heavily on how the consumer chooses quantities and also on what foods the product complements (in reasonable quantities, mayo in cole slaw complements tasty vegetable consumption and serves as a gateway salad, while mayo on fried potatoes Belgian-style is a high-energy occasional treat).  I am not a dietitian, but I would think of Just Mayo's nutrition profile as neither better nor worse than mayonnaise.

INGREDIENTS: Non-GMO Expeller-Pressed Canola Oil, Filtered Water, Lemon Juice, White Vinegar, 2% or less of the following: Organic Sugar, Salt, Apple Cider Vinegar, Pea Protein, Spices, Garlic, Modified Food Starch, Beta-Carotene.

(3) Many other consumers may seek an alternative to mayonnaise for animal welfare or environmental reasons. Both Just Mayo and traditional grocery store mayonnaise are processed food products, with similar transportation and packaging issues. For animal-friendly consumers at a loss to navigate confusing cage-free and free-range egg labels, Just Mayo certainly makes things easier by simply avoiding the use of eggs as an input. As a rule, plant food sources exhaust less of the planet's land and energy resources per unit of food energy produced. For these consumers, Just Mayo would be an improvement over traditional mayonnaise.

(4) As a product name, "Mayo" was close enough to "mayonnaise" to prompt me to look up the standard of identity for mayonnaise [Edit Feb 13: this sentence toned down from an earlier version saying Just Mayo "flirts with violating" the standard of identity]. A standard of identity is the federal government's official definition of a food. Sometimes, having a standard of identity protects consumers, by forbidding the sale of foods that are adulterated with fillers. At other times, a standard of identity may become outdated, preventing healthful or environmentally sound innovations. For example, there have been major controversies over whether the word "milk" can be used in the label for "soy milk."

The presence of eggs in mayonnaise is almost an archetypal example of a standard of identity. The Congressional Research Service glossary of agriculture policy terms (.pdf) specifically mentions mayonnaise under the heading for "standards of identity." According to the standards of identify in the Code of Federal Regulations, which are accessible on the Food and Drug Administration (FDA) website, "mayonnaise" includes eggs. 

The label for Just Mayo uses the slang "mayo" rather than "mayonnaise" in the product name. A favorable review on a vegan website calls the product "vegan mayonnaise," while a Whole Foods press release goes instead with "vegan mayonnaise-style product." In a similar fashion, Kraft Mayo or low-fat Hellmann's may use the term "mayo" or "mayonnaise dressing" without observing complete agreement with the standard of identity for mayonnaise [Edit Feb 13: sentence added]. The American Egg Board, a semi-public federal government checkoff entity, has begun a campaign to address the labeling of egg substitutes. It has a related white paper appealing for a "clean label" to oppose some of the egg labeling alternatives that may implicitly or explicitly be critical of traditional industrial egg production.

There may be some legal fireworks before the labeling of vegan alternatives to mayonnaise is settled.

USDA reports on pizza consumption and on dairy checkoff program initiatives to increase pizza demand

USDA's Agricultural Research Service (ARS) today released a new report on the role of pizza in American diets. ARS researcher Donna Rhodes and colleagues found that an astonishing 13% of the U.S. population consumed pizza on any given day, based on the most recent years of the National Health and Nutrition Examination Survey (NHANES).

For this large population -- more than 1 out of 8 Americans -- who consumed pizza in a particular day:

• Pizza accounted for 25% (among kids) and 29% (among adults) of daily food energy intake. More than a quarter of all calorie intake was pizza.
• Pizza accounted for 33% (among kids) and 39% (among adults) of daily saturated fat intake. Compared with foods in general, pizza is much heavier in saturated fat.
• Pizza accounted for 33% (among kids) and 38% (among adults) of sodium intake. Compared with foods in general, pizza is much heavier in sodium.

In recent years, USDA's dairy checkoff program has spent many millions of dollars to increase pizza consumption among U.S. children and adults. Using the federal government's taxation powers, the checkoff program collects a mandatory assessment of 15 cents on every hundredweight of milk that is sold for use as fluid milk or dairy products. The total mandatory assessment in 2011 was $104 million for fluid milk and $98 million for other dairy products, according to the most recent annual USDA Report to Congress. These expenditures are many times greater than federal spending on promoting fruits and vegetables, whole grains, or any of the other foods for which the Dietary Guidelines recommend increased consumption. Each semi-governmental checkoff program is managed by a board of producers appointed by the Secretary of Agriculture, and all expenditures are approved by USDA's Agricultural Marketing Service (AMS). Much of the actual activity is carried out by Dairy Management Inc. (DMI), a dairy industry organization. The checkoff program goal is to provide increased economic demand for dairy producers.

The USDA Report to Congress found that the economic payoff to producers is greater for cheese marketing efforts than for fluid milk marketing efforts. The report concluded:

• For every $1 that the checkoff program spends on increasing demand for fluid milk, farmers get $3.95 in increased revenue.
• For every $1 that the checkoff program spends on increasing demand for cheese, farmers get $4.43 in increased revenue.

That differential payoff is unsurprising. During the recent years of checkoff program operation, the USDA report charted the following trend in fluid milk consumption:

Meanwhile, the USDA report charted the following trend in cheese consumption:

Pizza accounts for a large fraction of the increased cheese consumption, so the Report to Congress emphasized the value for producers of partnering with fast-food restaurant chains, especially Domino's Pizza:

On average, expenditures on marketing and cheese promotion were $12.0 million during the period. Owing to partnerships with the pizza industry, notably Domino’s Pizza, expenditures on cheese increased from the fourth quarter of 2008 to the end of 2011.

DMI spent over $35 million over three years in partnership activities with Domino’s. The Domino's relationship accounted for nearly three-quarters of DMI’s overall promotion expenditures in the cheese category over the 2009 to 2011 period.

According to the Report to Congress, Patrick Doyle, President and CEO of Domino's Pizza, explained why the support from the federal government's dairy checkoff program was so beneficial to the company, as follows:

“DMI support has allowed us to focus some advertising dollars on areas we would not have considered otherwise. The Wisconsin 6 Cheese pizza has twice the cheese of a regular pizza, but we had neither developed nor advertised such a product. DMI helped fund the research and media to launch this product”

The Report to Congress argued that the USDA-supported dairy checkoff program's pizza partnerships increased cheese consumption:

The promotional activities with Domino’s included new product lines, use of more cheese than had been provided on similar items in the Domino's chain before the partnership, and the introduction of specialty cheeses into the company’s recipes. In short, the assistance of dairy dollars was instrumental in positively affecting the pizza category, a category that is very important to the dairy industry.

Every dairy checkoff partnership must be approved by USDA. Every marketing message has official legal standing as "government speech" (because, otherwise, courts would see the mandatory assessment as a misuse of the federal government's taxation powers). The checkoff partnerships undermine USDA's standing as a credible voice in promoting dietary guidance for Americans, and they must be a terrible embarrassment for the many people at USDA who seek to promote healthful eating.

Many Americans find pizza to be an enjoyable treat, but, from a nutritional perspective, it is a dreadful choice of major food staple. It is understandable that food companies may promote pizza with their own money, but it is a travesty that the federal government should contribute so heavily to this effort, while neglecting other important nutrition goals.

How grains and oilseeds flow through the U.S. food economy

The U.S. Bureau of Economic Analysis (BEA) recently (in December 2013) announced the once-every-five-years release of benchmark national input-output accounts, showing how resources flow from one industry to the next in the U.S. economy.

For people interested in the economics of the food system, some graduate students and colleagues and I last year developed a tool in Tufts' Visual Understanding Environment (VUE) for interactively illustrating such input-output flows. A working paper (#44) describes the tool. A previous blog post shows an example. The visualization tag at this blog collects other posts about interesting food policy data illustrations.

In this video, I use the new BEA benchmark input-output data to describe how grain and oilseeds flow through the food economy. Before making the video, I rounded the numbers to the nearest billion dollars and deleted some negligible small resource flows, so serious students of these data will want to refer to the original files from BEA. Because the numbers likely will be illegible in the video player embedded in the blog post, I've included a link to the original video, which you can download and play with higher resolution on your computer's own video program (such as Windows Media Player or the Mac equivalent).