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Whole Grains: Policy and Economics
- 1. INCREASING WHOLE GRAIN CONSUMPTION: POLICY AND ECONOMICS Laurian Unnevehr Professor Emerita, Agricultural and Consumer Economics University of Illinois at Urbana-Champaign Whole Grains Summit 2015 Portland, OR June 25
- 2. Overview Drivers of change and lessons from other markets Progress towards dietary recommendations Intake, purchases, demographics Product Introductions Relative cost Labeling and response to information Policy impacts Prospects for progress
- 3. Data and Research from Economic Research Service, USDA Maintain and report multiple sources of data regarding consumer purchases, food intake, food prices, market trends Whole grains reports use data ending about 2007-2010, so don’t know most recent situation Whole grains often reported as part of larger study of dietary quality Following slides draw heavily on ERS reports published during past 10 years
- 4. Drivers of change Policy WG health claim under DLEA 2005 Dietary Guidelines WIC (2007) and School Lunch standards (2012) Economics Consumer response Cost and Availability Retail venue Labeling
- 5. Past experience with health attributes Increase in consumer awareness and change in behavior among some consumers Labeling, media, education Increase in product offerings Industry motivated to capture market share, enhance brand reputation Widespread market change with benefits for all consumers Example: Trans fat reductions in food products since 2003 label regulation reflected in lower transfat in blood samples from 2009 NHANES
- 6. Overview: WG market response to 2005 DG WG purchases increased, mainly in grocery store purchases of WG bread and cereals WG price declined relative to refined grain products, but still average 20 to 60% higher More products introduced with WG claims Consumers appear to have been motivated by both information and price change to increase purchases Little WG consumption away from home
- 7. How close to WG recommendation of 50 percent of total grains? Population Group Total Food Intake Food at Home Food Away Total 12 16 3 Children 10 13 3 Adults 13 17 4 Low Income 11 14 3 High Income 13 17 3 Whole Grain Intake as Percent Total Grain Intake Source: 2007-10 National Health and Nutrition Examination Survey (NHANES). Data obtained from Economic Research Service, USDA.
- 8. How close to WG recommendation of 48 grams/ day intake? Population Group Total Food Intake Food at Home Food Away Total 46 43 4 Children 37 33 4 Adults 49 46 4 Low Income 40 37 3 High Income 50 46 4 Source: 2007-10 National Health and Nutrition Examination Survey (NHANES). Data obtained from Economic Research Service, USDA. Whole Grain Intake as Percent of 48 grams
- 9. Which progress measure relevant? Total grain consumption by average U.S. consumer is nearly double the recommended amount Whole grain intake has been increasing in both absolute quantities and relative to total grain Purchase data show more relative progress and intake data may underestimate whole grains due to lags in conversion factors Should diet messages be in shares or absolute amounts?
- 10. Grocery store sales of WG products increased with Dietary Guidelines
- 11. Increases in WG purchases are the only area of progress
- 12. Expenditures at grocery stores are still far from recommendations
- 14. Source: USDA/ERS analysis using Nielsen data.
- 16. Demographics High income consumers purchase and eat more whole grains than low income consumers Whites consume more whole grains than blacks or Asians; Hispanics consume the most. Whole grains consumption likely to be more important to those who follow other health- oriented behaviors. Source: USDA/ERS
- 17. How do consumers identify WG? WG health claim FDA guidance 2006 Whole Grain Stamp 2 kinds of stamps: 50% and 100% WG Food assistance program standards follow FDA guidance Evidence of confusion over different kinds of grain content claims
- 18. Confusing labels in my own pantry 6 breakfast cereals 3 Post; 1 General Mills; 2 Quaker 5 have Whole Grains Council stamp, but every box has the stamp in a different location and a different size 1 has no stamp but claims on front “100% of day’s whole grains” Why not put stamp in same position on product? Why do stamps reference “grams” when no other metric info on labels?
- 19. Research on consumer response Consumers more price responsive for WG products than RG products Prices found to be more important than information in influencing WG demand Lower prices for WG associated with lower rates of CVD regionally Sources: Mancino and Kuchler (2012); Lin et al. (2014); Rahkovsky and Gregory (2011)
- 20. Standards in USDA Food Assistance WIC and WG 8.6 million participants 2007 interim rule revised WIC package 2009 implementation; 2014 final 2 pounds WG bread/ month/ small child Standards for participating retailers to carry recommended foods Research has shown: increased availability of WG products in low income neighborhood stores Increased consumption of WG among WIC participants
- 21. Standards in USDA Food Assistance School Lunch and Breakfast Program 31 million children 2012 standards More F&V, more WG, low-fat milk, fewer calories 2014-15 all grains must be 50% WG Competitive foods must also meet WG standard Estimated increase from F&V addition is about 9 cents over the average cost of $1.04 / lunch Congressional proposals to roll back WG standard Captive market = Low quality?
- 22. Prospects for progess Clear progress in spite of challenges in communication and cost One of only a few areas of widespread progress in dietary quality Challenges to long run progress High cost relative to refined grains Negative media attention to school lunch issues Little or no WG in FAFH Need for better labeling in both FAH and FAFH
- 23. Lin, B.H., S. Yen. 2007. The U.S. Grain Consumption Landscape. ERR 50, USDA/ERS. Guthrie, J., C. Newman. 2013. Eating Better at School: Can New Policies Improve Children’s Food Choices? Amber Waves, USDA/ERS, September. Mancino, L., F. Kuchler. 2012. Demand for Whole-grain Bread Before and After the Release of Dietary Guidelines. Applied Economic Perspectives and Policy, 34(1): 76–101. (also Amber Waves, Dec 2012) Martinez, S. 2013. Introduction of New Food Products With Voluntary Health- and Nutrition-Related Claims, 1989-2010. EIB 108, USDA/ERS. Olivera, V., E. Frazao. 2015. The WIC Program: Background, Trends, and Economic Issues, 2015 Edition. EIB 134, USDA/ERS. Todd, J., E. Leibtag, C. Penberthy. 2011. Geographic Differences in the Relative Price of Healthy Foods. EIB 78, USDA/ERS. Volpe, R., A. Okrent. 2012. Assessing the Healthfulness of Consumers’ See www.ers.usda.gov for more information. Bibliography
Editor's Notes
- the 2010 Dietary Guidelines recommends Americans consume at least 3 ounces of whole grains for a diet of 2,000 calories per day, or 1.5 ounces of whole grains for each 1,000 calories. However, intake surveys from 2007-10 reveal that Americans age 2 and older consumed an average of 0.4 ounces of whole grains for each 1,000 calories consumed.
- Intake data may also have a number of problems– conversions not up to date with new product formulations, for example.
- Using Nielsen Homescan data, ERS researchers found that in 2001, whole grain products accounted for 11.1 percent of all pounds of packaged grain products purchased in grocery stores (excluding flours, mixes, and frozen or ready-to-cook products). By 2006, whole grains' share of total grain product purchases was 17.9 percent. ERS researchers found whole-grain breads accounted for 6 percent of all pounds of bread purchases in 2001 and rose to 20 percent by 2007. Over this same time period, whole-grain cereals jumped from 30 percent of all cereals purchased to 46 percent. Follows 1990’s observation that most WG consumption at breakfast
- The healthfulness of the average consumer food shopping basket did not improve noticeably between 1998 and 2006. Households shifted from refined grains toward whole grains, but allocate less of their food budgets to fruits and vegetables and more toward processed and packaged foods.
- The researchers noted that the average number of new whole-grain products jumped from 4 per month in 2001 to 16 in 2006. In 2004, General Mills, the Nation’s second-leading breakfast cereal producer, announced that it would begin producing all cereals with whole grains (Horovitz, 2004). The move followed a Federal advisory panel recommendation that refined grains be replaced by whole-grain products to reduce risks of heart disease and other conditions. Following the General Mills announcement, Nestle announced a new Lean Cuisine line made with 100-percent whole-grain rice and pastas as sales of frozen meals were also limited by the “low-carb” craze (Thompson, 2004).
- Whole grains were more expensive than refined grains across the United States, with prices ranging from 23 percent higher (San Fran- cisco) to more than 60 percent higher (nonmetro Pennsylvania and New York) than for refined grains. From 1998 to 2006 Whole grains became relatively less expensive over time; the relative price decreased 5 percentage points, on average.
- monthly purchases in the US over five years, from January 2003 through December 2007. Demand analysis by ERS, which separated the impact of the Dietary Guidelines from other economic factors affecting purchase decisions, shows that falling relative prices of whole-grain bread accounted for much of the shift toward whole-grain bread purchases. Nonetheless, after accounting for relative prices, changing consumer incomes, seasonality in bread demand, and regional differences in food preferences, there are additional changes in purchasing behavior that can reasonably be attributed to the Dietary Guidelines. The 2005 Guidelines appear to have encouraged Americans to reduce purchases of refined-grain breads by 3 percent and increase purchases of whole grain bread by 14 percent. After accounting for price effects and other factors influencing demand, ERS finds that the 2005 Guidelines were responsible for households with incomes above 185 percent of the Federal poverty level increasing their whole-grain bread purchases by 19 percent (from 0.66 to 0.79 pounds per month) and decreasing refined-grain purchases by 5 percent (from 3.13 to 2.98 pounds per month). When looking at lower income households, there was no evidence that the Dietary Guidelines provided much of a nudge. While lower income households also increased their purchases of whole-grain bread, this was found to be almost entirely due to declining relative prices of whole-grain bread.
- According to Mintel, a market research organization, the introduction of the Whole Grains Council stamp in 2005 was a driving force behind the rapid rise in whole-grain claims (Scott-Thomas, 2010). The Whole Grain Stamp program gave manufacturers the opportunity to signify the level of whole grain in their products as consumer recognition of the symbol increased. Companies must be members of the Whole Grains Council, file information about each qualifying product with the Council, and sign a legal agreement that they will abide by all requirements of the Stamp program. Such services strengthen the credibility of voluntary labeling (Golan et al., 2007). In 2006, the FDA issued guid- ance to the food industry about what the agency considers “whole grain” to mean, and to assist manufacturers with food label statements related to “whole grain” content (U.S. Department of Health and Human Services, 2006). The guidance contains recommenda- tions that are not legally enforceable.