David Just presentation at 2011 Access to Healthy Foods Summit

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David Just's presentation about behavioral purchasing as it relates to foods. Presented at the 2011 Access to Healthy Foods Summit in Seattle, WA.

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David Just presentation at 2011 Access to Healthy Foods Summit

  1. 1. Marketing Nutrition: It’s Not What You Think<br />David R. Just<br />June 2011<br />
  2. 2. Obesity<br />Over the last 40 years the percentage of overweight adults has increased from 43.8% to 64.5% (NIH).<br />32% of adult males and 36% of adult females are obese <br />Double the rate from 1980<br />Childhood obesity has increased from 6% to 18% since 1980 <br />Total annual medical costs due to overweight $147 billion.<br />Other costs from reduced life expectancy, loss in productivity, etc., push total costs to $500 billion<br />
  3. 3. The Response<br />More information<br />Nutrition labels<br />Government recommendations<br />Calorie posting<br />Paternalistic interventions<br />Banning soda in school/on SNAP<br />Soda/sugar/fat taxes<br />Banning happy meals<br />
  4. 4. Are These Policies Effective?<br />Nutrition Labels: <br />30%-60% use nutrition labels regularly<br />Observation leads us to a number closer to 10%<br />Even among those who use them, a majority do not understand them or use them ineffectively<br />Focus on one dimension (e.g., Fat)<br />Can lead to backfire<br />Difficulty understanding what RDA means<br />Difficulty with understanding per serving information<br />
  5. 5. Are These Policies Effective?<br />My Pyramid, etc:<br />Wonderful coverage and wide viewership<br />No impact on consumption<br />Calorie Posting:<br />Three major studies<br />Two find no effect on consumption<br />One finds dieters consume more with calorie information<br />One finds that those who use the labels consume fewer calories<br />Correlation not causation<br />
  6. 6. Why?: Economics and Psychology<br />One reason these policies fail is endogeneity<br />Those who overeat when visiting a fast food restaurant do so because they like to<br />They will be more resistant to information, or other policies<br />Reactance <br />Rebelling against a threat to freedom<br />Fat tax versus a thin subsidy<br />Limits on ketchup<br />Don’t press this button<br />
  7. 7. Why?: Economics and Psychology<br />Another reason is an inability to make reasoned decisions<br />Individuals make 200-300 food decisions a day<br />Making deliberate decisions for each would be impossible<br />We fall back on rules of thumb and habit <br />What would happen if we did rationally consider each decision?<br />How could cognitively based policies engage the unthinking?<br />
  8. 8. All-You-Can-Eat<br /><ul><li>Rational: eat until the next bite of food provides no more enjoyment
  9. 9. Individuals entering an AYCE pizza buffet were asked to participate</li></ul>Half were given a coupon for a free drink<br />Half were given a coupon for a free drink and 50% off their meal<br />
  10. 10. All-You-Can-Eat<br /><ul><li>Rational: eat until the next bite of food provides no more enjoyment
  11. 11. Individuals entering an AYCE pizza buffet were asked to participate</li></ul>Half were given a coupon for a free drink<br />Half were given a coupon for a free drink and 50% off their meal<br />
  12. 12. All-You-Can-Eat<br /><ul><li>Rational: eat until the next bite of food provides no more enjoyment
  13. 13. Individuals entering an AYCE pizza buffet were asked to participate</li></ul>Half were given a coupon for a free drink<br />Half were given a coupon for a free drink and 50% off their meal<br />Don’t like it? Eat 0.5 slices more<br />
  14. 14. What is normal anyway?<br />Soda can – 12 oz<br />Starbucks – “Tall” 12 oz<br />McDonald’s soda – “child” 12 oz<br />McDonald’s coffee – “small” 12 oz<br />Consumers presented with two sizes of items<br />Regular and Double<br />Half and Regular<br />140 more calories just by naming it smaller<br />
  15. 15. What is normal anyway?<br />Soda can – 12 oz<br />Starbucks – “Tall” 12 oz<br />McDonald’s soda – “child” 12 oz<br />McDonald’s coffee – “small” 12 oz<br />Consumers presented with two sizes of items<br />Regular and Double<br />Half and Regular<br />140 more calories just by naming it smaller<br />
  16. 16. What is normal anyway?<br />Soda can – 12 oz<br />Starbucks – “Tall” 12 oz<br />McDonald’s soda – “child” 12 oz<br />McDonald’s coffee – “small” 12 oz<br />Consumers presented with two sizes of items<br />Regular and Double<br />Half and Regular<br />140 more calories just by naming it smaller<br />
  17. 17. Debit or Cash<br />Lunch items were chosen to balance “healthy” and “unhealthy” choices in each category<br />Commonly offered in Cornell dining areas<br />Prices charged in Cornell dining areas<br />Two treatments<br />Cash: Given $20 in cash<br />Debit Card: Given $10 in cash and $10 on a debit card<br />
  18. 18. Calorie Consumption<br />
  19. 19. Healthy vs. Unhealthy<br />
  20. 20. Healthy and Unhealthy Calories<br />
  21. 21. What We Know About Food Decisions<br />We have two decision-making mechanisms<br />Deliberative – Rational <br />Emotional – Naïve knee-jerk reactions<br />Which takes over depends on the level of cognitive resources available<br />Stress or distraction leads us to eat more and eat worse<br />It takes effort and resources to resist temptation<br />
  22. 22. Hot vs. Cold Decisions<br />Hot State<br />We eat for<br />Taste<br />Convenience<br />Size<br />Visual effect<br />This decision is an exception<br />We buy<br />Bigger<br />More hedonic<br />Cold State<br />We consider<br />Prices<br />Health information<br />Logic<br />We buy<br />Smaller portions<br />Moderate foods<br />
  23. 23. Consumption and Control: Restaurant Consumption<br />Preferences<br />Wealth<br />Cognitive<br />(Low Impact)<br />Primitive<br />Price<br />Price of Substitutes and Complements<br />Attributes (calories, nutrients)<br />Health Information<br />Effort<br />Salience<br />Structure<br />Size of portions<br />Hedonic (Salt, Fat, Sugar)<br />Distractions<br />Atmosphere<br />Effort/Availability<br />Size of portion<br />Framing of portion<br />Manufacturer Control<br />Consumption<br />Decision<br />Individual Control<br />Affective<br />(High Impact)<br />Socialization<br />Shape of containers<br />Visceral Factors<br />Mental food accounts<br />Commitment<br />Habit<br />
  24. 24. Sin and Virtue<br />The food environment responds to us<br />Marketers have learned to sell sinful foods to those in a hot state<br />Healthy convenience food is generally a flop<br />Healthy fast food is a flop<br />Bad foods that are difficult to prepare are also less successful<br />Healthy food and portions must be sold where individuals are likely in a cold state<br />The more distracted the consumer, the worse the food<br />
  25. 25. Sin and Virtue<br />Cognitive policies won’t impact hot state consumers<br />In a hot state, I don’t care how many calories it has<br />I am not concerned with my budget<br />I am concerned with my hunger, taste and convenience<br />Policymakers must engage the thoughtless decision-maker<br />
  26. 26. Sin and Virtue<br />Commit while in a cold state:<br />Control your future environment<br />Limit exposure to temptation<br />Producers can sell commitment<br />Smaller portions at a premium<br />Would you like to cut 150 calories by forgoing the side?<br />Less distracted eating environments<br />Policymakers can use thoughtless choice to public advantage <br />
  27. 27. The Problem of Influencing Decisions<br />Directly restricting choices leads to reactance<br />This is costly to any policy<br />Saps the effect, makes the beneficiary feel like they are worse off<br />What about regulating subtle influences in the environment that impact choice?<br />Simple example: Normative size labels<br />12 oz is regular/medium<br />No restriction on choice<br />Benefit from attribution<br />It was my choice, I will repeat it in the future<br />
  28. 28. What of Endogeneity? <br />Because both marketers and consumers respond to each other, well intentioned strategies backfire<br />Suppose a firm develops reduced fat potato chips<br />When consumers are unaware of reduction in fat, they consume the same amount of chips<br />This reduces fat consumption<br />When aware, those who want to lose weight eat more<br />Limits the benefits<br />Some overvalue the reduction<br />Many sense a taste difference (even if there is none)<br />
  29. 29. What of Endogeneity? <br />The producers decision<br />Differentiate the new product<br />Can price discriminate<br />Higher price for low fat<br />New consumers for chips<br />Higher profit<br />Don’t differentiate<br />Now new customers are sales revenue<br />Could be higher costs<br />
  30. 30. What of Endogeneity? <br />The result<br />The firm differentiates<br />Consumers lose the benefits through irrational reaction<br />Dieters overeat, maintaining fat consumption and increasing calories, etc.<br />Health nuts pay too high a price<br />Those who think there is a taste difference miss out on reduced fat<br />Endogeneity coupled with irrationality creates a puzzle<br />Could other incentives be offered to firms to innovate without differentiating?<br />
  31. 31. What Does this Mean for Kids<br />Ever wonder why kids food is generally less healthy?<br />Kids have not fully developed their rational system<br />Very little understanding of long term consequences<br />Developing understanding of the marketplace<br />Almost like a hot state – all the time<br />Reactance to paternalism<br />Fortunately most kids find some healthy foods to be appealing and acceptable<br />We can make some foods cool<br />We can lead them to make the right choice<br />
  32. 32. School Lunch Trilemma<br />Pressure to improve the nutrition of meals<br />Pressure to keep participation up<br />Pressure to balance revenue and cost<br />
  33. 33. School Lunch Trilemma<br />Pressure to improve the nutrition of meals<br />Pressure to keep participation up<br />Pressure to balance revenue and cost<br />We are going to stop selling chocolate milk<br />
  34. 34. School Lunch Trilemma<br />Pressure to improve the nutrition of meals<br />Pressure to keep participation up<br />Pressure to balance revenue and cost<br />We are going to stop selling chocolate milk<br />I’m going to stop buying<br />
  35. 35. School Lunch Trilemma<br />Pressure to improve the nutrition of meals<br />Pressure to keep participation up<br />Pressure to balance revenue and cost<br />I’m going to drink three glasses of chocolate milk when I get home<br />We are going to stop selling chocolate milk<br />I’m going to stop buying<br />
  36. 36. What Works<br />Small inexpensive changes<br />Subtle nudges in the right direction<br />Reframing the decision of what to eat<br />Changes that kids will seldom even notice<br />If they think it’s their choice it can form a habit<br />
  37. 37. A Few Keys<br />Keep it simple:<br />Line of sight<br />Convenience<br />Suggested social norms<br />Bottlenecks<br />POS questions<br />Sound familiar?<br />Many of these tools are well understood in marketing<br />These same tools can be used by restaurants and food manufacturers to build a reputation of selling health conscious food, without gutting sales<br />
  38. 38. Line of Sight<br />Vitamin Water 125 cals<br />Iced Tea 120 cals<br />Water 0 cals<br />
  39. 39. Example: Plattsburg Schools<br />Before:<br /> Under a shelf<br /> Fruit mixed – people had to dig<br />After: <br /> In an attractive basket<br /> Eye level – by itself<br /> Separated<br />
  40. 40. Convenience<br />Small inconveniences can have a big impact<br />Moving vending machines more distant locations (23%)<br />Closing the lid to the on the ice cream cooler (14-30%)<br />
  41. 41. Ala Cart Items<br />Hot Lunch Line<br />New Location for Salad Bar<br />Old Location for Salad Bar<br />Cash Register #2<br />Cash Register #1<br />
  42. 42. Ala Cart Items<br />Hot Lunch Line<br />Increased salad sales<br />by 2 to 3 times<br />New Location for Salad Bar<br />Old Location for Salad Bar<br />Cash Register #2<br />Cash Register #1<br />
  43. 43. Suggesting Social Norms<br />
  44. 44. Suggesting Social Norms<br />Balancing demand with prevalence<br />Self serve items and size<br />Larger tray sections means more taken (30%)<br />Large serving spoons (14%)<br />A vat of mayonnaise with a spoon <br />Single serving portions (jar with a pump, packets)<br />
  45. 45. Hot Lunch Line<br />Less Healthy Snack Items<br />Hot Lunch Items<br />Cash Register #2<br />Cash Register #1<br />
  46. 46. Bottlenecks<br />Kids impulse buy<br />At the register you have their attention<br />What do you want them to buy?<br />Remove snacks?<br />Gut revenue, lose customers<br />Move the less healthy and add healthy snacks<br />Maintain revenues, preserve customers<br />
  47. 47. POS Questions<br />What to ask<br />Complete the meal<br />Milk <br />Half finds its way into the garbage<br />Fruit?<br />Portable<br />Several studies have shown effective<br />Wait for an answer (30%)<br />How to ask<br />
  48. 48. Debit Purchases<br />Debit purchases<br />Large national data set shows<br />Eat more high calorie<br />Eat fewer of the high nutrition<br />Experiment<br />Even given the same pool of money, they buy more brownies and soda<br />Increase calorie consumption (70 cals)<br />Controlled Debit<br />Dramatically cuts calorie content (130 cals)<br />Increases nutritional content<br />
  49. 49.
  50. 50. Thank You<br />www.Smarterlunchrooms.org<br />

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