Despite disappointing results in its first year, supporters of a program designed to get Supplemental Nutrition Assistance Program (SNAP) shoppers to buy more low-fat and non-fat milk hope that an expansion of the program will yield better results and lay the groundwork for continued investment in the next farm bill.

Following in the footsteps of the successful incentive programs to expand fruit and vegetable consumption, the Healthy Fluid Milk Incentives pilot was established in the 2018 farm bill to encourage consumption of unflavored and unsweetened low-fat or non-fat fluid milk by SNAP participants.

In its first year, USDA's Food and Nutrition Service awarded $1 million to the Baylor Collaborative on Hunger and Poverty to test methods at four local stores in west Texas in 2020 and awarded them another $1 million in 2021 as the program expanded to eight stores in New Jersey and one Jubilee store in west Texas.

Every SNAP dollar spent on qualifying fluid milk earned one dollar in incentives that could be redeemed at a subsequent trip for eligible milk and dairy products. The Baylor project provided incentive dollars issued as coupons printed on the bottom of transaction receipts, which expired 30 days after issuance for additional dairy products.

“If we can get to the scale and predictability and have the pilots out there that are working and demonstrating results, we’re very optimistic about future growth and expansion of this program,” said International Dairy Foods Association President and CEO Michael Dykes, who downplayed the significance of the limited launch.

In its first year, a recent Food and Nutrition Service report on the program showed a 2% redemption rate: SNAP shoppers redeemed 22 coupons valued at $89 out of 1,156 coupons valued at $4,054 during the 12-month pilot period across all four stores.

But researchers highlighted opportunities to improve the program going forward. 

Jeremy Everett, executive director of the Baylor Collaborative on Hunger and Poverty, said two of the initial barriers included a small retail footprint and limitations of the paper coupon.

Baylor’s project provided a paper coupon redeemable on a future visit to a SNAP participant if they used their SNAP card when purchasing milk. Everett said if a retailer was able to offer the incentive digitally or provide free milk at the point of sale, it could greatly increase participation.

Everett said diversifying retail establishments within a targeted area offers another opportunity to improve redemption rates. He said SNAP recipients likely visit two or three different stores for their grocery shopping -- some located within walking distance and others accessible by bus or another transportation mode. “In all those cases, you really want them to have the same incentive program in all those stores,” he explained.

The four stores in west Texas two stores in Lubbock, one in Littlefield, and one in San Angelo – are part of a regional supermarket chain called Food King owned and operated by Lowe’s Supermarkets. The coupons could not be redeemed at the other 20-plus stores also owned by Lowe’s in the area but had to be redeemed at the initial store of purchase. Everett said this could have been another limiting factor in redemption.

FNS said the fiscal 2021 HFMI project is underway. Baylor's BCHP has partnered with eight Wakefern Food Corp stores in New Jersey and the Jubilee Food Market in Waco, Texas. "These stores are providing dollar-for-dollar incentives in the form of paper coupons for future use to SNAP households on qualifying fluid milk purchases with SNAP EBT," the FNS report said.

In its third year, fiscal year 2022, $3 million was awarded to Auburn University’s Hunger Solutions Institute to dramatically expand the footprint of stores and target regions with high SNAP usage. The project will kick off in the next several months at 116 retailers in Alabama, California, Georgia and South Dakota.

Kara Newby, federal grants coordinator for the Hunger Solutions Institute, said they’ve targeted these states and regions to diversify the program, with urban areas represented by Los Angeles and Atlanta, rural locations in Alabama, and others near Indian reservations in South Dakota.

“Our strategy was how can we diversify the program enough to really see what’s working in different areas and have it be as effective as possible,” Newby said.

Data is important to determine program effectiveness. Newby said their research team, which includes an ag economist, plans to do soft releases of monthly reports ahead of an annual report to educate legislators on their expanded program.

“We understand the urgency of the farm bill and making wise, informed decisions moving forward with the program,” she said.

Milk incentives.jpgThe Auburn program will continue to use a coupon model. Newby said she does not believe the coupon model is a hindrance, as the Double Up Food Bucks’ coupons in some of their same targeted regions resulted in a 30-60% redemption rate.

For stores with even higher adoption rates, Newby credits interaction between cashiers and customers.

Fruit and vegetable incentive programs find success if a cashier points to the receipt, identifies the coupon and encourages the customer to return. “As long as that initial point of contact is really interacting with the customer, to us that's what really makes a huge difference in our double-up and we think in our milk as well,” Newby said.

Newby said they’re also testing in South Dakota use of a loyalty app to provide the free milk, and a 50% off model at a small, urban store in Atlanta. Newby said retailers are a very important piece of the equation in making the incentive program work, which also includes marketing in-store to encourage education and adoption.

IDFA and the National Milk Producers Federation (NMPF) were both supportive of HMIP’s establishment in the last farm bill and want to see the pilots expanded and improved upon in the next one. The farm bill authorized $20 million, but Congress has appropriated just $9 million in the last four fiscal years, with $4 million of that coming in the FY 23 omnibus bill. That money likely will be awarded this summer.

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Dykes believes that providing mandatory funding in the farm bill will provide predictability for grant recipients and momentum moving forward. 

Some other incentive programs require matching funds, which Dykes said could be a way to expand the reach of the program. “If we get mandatory funding in the farm bill, we’ll get to the scale where those kinds of opportunities will present themselves,” Dykes said.

Claudia Larson, NMPF senior director of government relations, said the pilots are important to identify where changes can be made to improve the program. “Reasonably expanding the program to broaden the scope of eligible dairy products and to increase the number and variety of SNAP locations providing access to the program would help provide the additional data needed to assess more fully the program’s strengths and areas for improvement,” she said.

Dykes also believes the program can be improved by expanding qualifying purchases beyond just fluid low-fat milk to all milk, cheese and yogurt. IDFA also wants to prioritize stores with the highest percentage of SNAP customers.

In addition, improvements are needed to make it easier at checkout to redeem the incentives. “A lot of stores aren’t equipped to manage the EBT cards and the electronic couponing,” Dykes said. More can be done with funds from Congress, USDA and the industry to improve point-of-sale systems and streamline the checkout process that doesn’t stigmatize SNAP recipients.

Many major retail chains are members of IDFA, and most of them manufacture their own dairy case. There’s a keen interest to see this succeed, Dykes said, especially as only 10% of Americans receive the daily recommended three servings of dairy. 

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