Marketing Nutrition: It’s Not What You Think

David R. Just

June 2011

Obesity– Over the last 40 years the

percentage of overweight adults has increased from 43.8% to 64.5% (NIH).

– 32% of adult males and 36% of adult females are obese

• Double the rate from 1980– Childhood obesity has increased

from 6% to 18% since 1980 – Total annual medical costs due to

overweight $147 billion.• Other costs from reduced life

expectancy, loss in productivity, etc., push total costs to $500 billion

The Response

• More information– Nutrition labels– Government

recommendations– Calorie posting

• Paternalistic interventions– Banning soda in school/on

SNAP– Soda/sugar/fat taxes– Banning happy meals

Are These Policies Effective?

• Nutrition Labels: – 30%-60% use nutrition labels regularly– Observation leads us to a number closer to 10%– Even among those who use them, a majority do

not understand them or use them ineffectively• Focus on one dimension (e.g., Fat)

– Can lead to backfire

• Difficulty understanding what RDA means• Difficulty with understanding per serving information

Are These Policies Effective?

• My Pyramid, etc:– Wonderful coverage and wide viewership– No impact on consumption

• Calorie Posting:– Three major studies

• Two find no effect on consumption– One finds dieters consume more with calorie information

• One finds that those who use the labels consume fewer calories

– Correlation not causation

Why?: Economics and Psychology

• One reason these policies fail is endogeneity– Those who overeat when

visiting a fast food restaurant do so because they like to

– They will be more resistant to information, or other policies

• Reactance – Rebelling against a threat to

freedom– Fat tax versus a thin subsidy– Limits on ketchup– Don’t press this button

Why?: Economics and Psychology• Another reason is an inability

to make reasoned decisions– Individuals make 200-300 food

decisions a day– Making deliberate decisions

for each would be impossible– We fall back on rules of thumb

and habit – What would happen if we did

rationally consider each decision?

– How could cognitively based policies engage the unthinking?

All-You-Can-Eat

►Rational: eat until the next bite of food provides no more enjoyment

►Individuals entering an AYCE pizza buffet were asked to participate– Half were given a coupon for a

free drink– Half were given a coupon for a

free drink and 50% off their meal

All-You-Can-Eat

►Rational: eat until the next bite of food provides no more enjoyment

►Individuals entering an AYCE pizza buffet were asked to participate– Half were given a coupon for a

free drink– Half were given a coupon for a

free drink and 50% off their meal

Pizza Eaten

00.5

11.5

22.5

33.5

44.5

Full Price Half Price

All-You-Can-Eat

►Rational: eat until the next bite of food provides no more enjoyment

►Individuals entering an AYCE pizza buffet were asked to participate– Half were given a coupon for a

free drink– Half were given a coupon for a

free drink and 50% off their meal

Don’t like it? Eat 0.5 slices morePizza Eaten

00.5

11.5

22.5

33.5

44.5

Full Price Half Price

What is normal anyway?

• Soda can – 12 oz• Starbucks – “Tall” 12 oz • McDonald’s soda – “child” 12

oz• McDonald’s coffee – “small”

12 oz• Consumers presented with

two sizes of items– Regular and Double– Half and Regular

• 140 more calories just by naming it smaller

What is normal anyway?

• Soda can – 12 oz• Starbucks – “Tall” 12 oz • McDonald’s soda – “child” 12

oz• McDonald’s coffee – “small”

12 oz• Consumers presented with

two sizes of items– Regular and Double– Half and Regular

• 140 more calories just by naming it smaller

Spaghetti Waste

Salad Waste

Pudding Waste

02468

101214161820

Gra

ms

What is normal anyway?

• Soda can – 12 oz• Starbucks – “Tall” 12 oz • McDonald’s soda – “child” 12

oz• McDonald’s coffee – “small”

12 oz• Consumers presented with

two sizes of items– Regular and Double– Half and Regular

• 140 more calories just by naming it smaller

Spaghetti Waste

Salad Waste

Pudding Waste

02468

101214161820

Gra

ms

Debit or Cash• Lunch items were chosen to balance “healthy”

and “unhealthy” choices in each category– Commonly offered in Cornell dining areas– Prices charged in Cornell dining areas

• Two treatments– Cash: Given $20 in cash– Debit Card: Given $10 in cash and $10 on a debit

card

Calorie Consumption

620.00

630.00

640.00

650.00

660.00

670.00

680.00

690.00

700.00

Cash Card

Healthy vs. Unhealthy

$2.60$2.70

$2.80$2.90$3.00

$3.10$3.20$3.30

$3.40$3.50

Cash Card

HealthyUnhealthy

Healthy and Unhealthy Calories

0.00

100.00

200.00

300.00

400.00

500.00

600.00

Cash Card

HealthyUnhealthy

What We Know About Food Decisions

• We have two decision-making mechanisms– Deliberative – Rational – Emotional – Naïve knee-jerk

reactions• Which takes over depends on

the level of cognitive resources available– Stress or distraction leads us to

eat more and eat worse– It takes effort and resources to

resist temptation

Hot vs. Cold Decisions

Cold State• We consider

– Prices– Health information– Logic

• We buy– Smaller portions– Moderate foods

Hot State• We eat for

– Taste– Convenience– Size– Visual effect– This decision is an exception

• We buy– Bigger– More hedonic

ConsumptionDecision

SocializationShape of containersVisceral FactorsMental food accountsCommitment

Cognitive(Low Impact)

Affective(High Impact)

PricePrice of Substitutes and ComplementsAttributes (calories, nutrients)Health Information

PreferencesWealth

EffortSalienceStructureSize of portionsHedonic (Salt, Fat, Sugar)DistractionsAtmosphereEffort/AvailabilitySize of portionFraming of portion

Habit

Individual Control

Primitive

Manufacturer Control

Consumption and Control: Restaurant Consumption

Sin and Virtue• The food environment responds to us

– Marketers have learned to sell sinful foods to those in a hot state

– Healthy convenience food is generally a flop

– Healthy fast food is a flop– Bad foods that are difficult to prepare

are also less successful• Healthy food and portions must be

sold where individuals are likely in a cold state

• The more distracted the consumer, the worse the food

Sin and Virtue

• Cognitive policies won’t impact hot state consumers– In a hot state, I don’t care how

many calories it has– I am not concerned with my

budget– I am concerned with my

hunger, taste and convenience• Policymakers must engage the

thoughtless decision-maker

Sin and Virtue

• Commit while in a cold state:– Control your future environment– Limit exposure to temptation

• Producers can sell commitment– Smaller portions at a premium– Would you like to cut 150 calories

by forgoing the side?– Less distracted eating

environments• Policymakers can use thoughtless

choice to public advantage

The Problem of Influencing Decisions

• Directly restricting choices leads to reactance– This is costly to any policy– Saps the effect, makes the beneficiary feel like they are worse

off• What about regulating subtle influences in the

environment that impact choice?– Simple example: Normative size labels– 12 oz is regular/medium– No restriction on choice

• Benefit from attribution– It was my choice, I will repeat it in the future

What of Endogeneity?

• Because both marketers and consumers respond to each other, well intentioned strategies backfire– Suppose a firm develops reduced fat potato

chips• When consumers are unaware of reduction in

fat, they consume the same amount of chips– This reduces fat consumption

• When aware, those who want to lose weight eat more

– Limits the benefits

• Some overvalue the reduction• Many sense a taste difference (even if there is

none)

What of Endogeneity?

• The producers decision– Differentiate the new product

• Can price discriminate• Higher price for low fat• New consumers for chips• Higher profit

– Don’t differentiate• Now new customers are sales

revenue• Could be higher costs

What of Endogeneity?

• The result– The firm differentiates– Consumers lose the benefits through

irrational reaction• Dieters overeat, maintaining fat consumption

and increasing calories, etc.• Health nuts pay too high a price• Those who think there is a taste difference

miss out on reduced fat– Endogeneity coupled with irrationality

creates a puzzle– Could other incentives be offered to firms

to innovate without differentiating?

What Does this Mean for Kids• Ever wonder why kids food is

generally less healthy?• Kids have not fully developed their

rational system– Very little understanding of long term

consequences– Developing understanding of the

marketplace– Almost like a hot state – all the time– Reactance to paternalism

• Fortunately most kids find some healthy foods to be appealing and acceptable– We can make some foods cool– We can lead them to make the right

choice

School Lunch Trilemma• Pressure to improve the nutrition of meals• Pressure to keep participation up• Pressure to balance revenue and cost

School Lunch Trilemma• Pressure to improve the nutrition of meals• Pressure to keep participation up• Pressure to balance revenue and cost

We are going to stop selling

chocolate milk

School Lunch Trilemma• Pressure to improve the nutrition of meals• Pressure to keep participation up• Pressure to balance revenue and cost

We are going to stop selling

chocolate milkI’m going to stop buying

School Lunch Trilemma• Pressure to improve the nutrition of meals• Pressure to keep participation up• Pressure to balance revenue and cost

We are going to stop selling

chocolate milkI’m going to stop buying

I’m going to drink three glasses of chocolate milk

when I get home

What Works

• Small inexpensive changes– Subtle nudges in the right direction– Reframing the decision of what to eat– Changes that kids will seldom even notice

• If they think it’s their choice it can form a habit

A Few Keys

• Keep it simple:– Line of sight– Convenience– Suggested social norms– Bottlenecks– POS questions

• Sound familiar?– Many of these tools are well understood in marketing– These same tools can be used by restaurants and food

manufacturers to build a reputation of selling health conscious food, without gutting sales

Line of Sight

Vitamin Water 125 cals

Iced Tea 120 cals

Water 0 cals

Example: Plattsburg SchoolsBefore:

Under a shelfFruit mixed – people had to dig

After: In an attractive basketEye level – by itselfSeparated

Convenience

• Small inconveniences can have a big impact– Moving vending

machines more distant locations (23%)

– Closing the lid to the on the ice cream cooler (14-30%)

Hot Lunch Line

Hot Lunch Line

Old Locatio

n for Salad Bar

Old Locatio

n for Salad Bar

Ala Cart ItemsAla Cart Items

Cash Register

#2

Cash Register

#2

Cash Register

#1

Cash Register

#1

New Locatio

n for Salad Bar

New Locatio

n for Salad Bar

Hot Lunch Line

Hot Lunch Line

Old Locatio

n for Salad Bar

Old Locatio

n for Salad Bar

Ala Cart ItemsAla Cart Items

Cash Register

#2

Cash Register

#2

Cash Register

#1

Cash Register

#1

New Locatio

n for Salad Bar

New Locatio

n for Salad Bar

Increased salad salesby 2 to 3 times

Suggesting Social Norms

Suggesting Social Norms

• Balancing demand with prevalence

• Self serve items and size– Larger tray sections means

more taken (30%)– Large serving spoons (14%)– A vat of mayonnaise with a

spoon • Single serving portions (jar

with a pump, packets)

Hot Lunch Line

Hot Lunch Line

Less Healthy Snack Items

Less Healthy Snack Items

Cash Register

#2

Cash Register

#2

Cash Register

#1

Cash Register

#1

Hot Lunch Items

Hot Lunch Items

Bottlenecks• Kids impulse buy

– At the register you have their attention

– What do you want them to buy?

• Remove snacks?– Gut revenue, lose customers

• Move the less healthy and add healthy snacks– Maintain revenues, preserve

customers

POS Questions

What to ask• Complete the meal

– Milk • Half finds its way into the

garbage– Fruit?

• Portable• Several studies have shown

effective

• Wait for an answer (30%)

How to ask

Debit Purchases

Debit purchases• Large national data set

shows– Eat more high calorie– Eat fewer of the high

nutrition

• Experiment– Even given the same pool of

money, they buy more brownies and soda

– Increase calorie consumption (70 cals)

Controlled Debit• Dramatically cuts calorie

content (130 cals)• Increases nutritional

content

Thank You

www.Smarterlunchrooms.org