Financial Impacts of Nutrition Standards for Snacks Sold in Schools

The Kids’ Safe and Healthful Foods Project’s recent health impact assessment (HIA) revealed that updating national nutrition standards for snack foods and beverages sold in schools could help students maintain a healthy weight and help schools increase their food service revenue. Project director Jessica Donze Black (JDB) and lead economic analyst Neal Wallace (NW) discuss the findings and what they mean for schools’ bottom lines.

What do the data show in terms of budgets and snack food and beverage policies?

NW: We found that food service revenues and school meal participation increased in states that implemented nutrition policies for snack foods and beverages. The HIA looked at school food service revenue and school meal participation for all 50 states and the District of Columbia from 2003 to 2008. We compared changes in earnings and participation levels for states that adopted these policies during this period both before and after the standards were instated, and compared these changes to states that did not implement a policy. This allowed us to develop a reasonable estimate of the net effect, or the fluctuations in income and participation, that occurred specifically due to snack guidelines.

JDB: This is really important because one of the negative arguments we keep hearing is that strong rules for snack foods and beverages cause districts to lose money. In looking at the data, we learned that is not the case and that after implementing such policies, district budgets stayed the same or even increased. This means that nutrition standards are good for both students’ waistlines and schools’ bottom lines.

Can you walk us through an example of how schools can make the snack food environment healthier without losing money?

NW: The data indicate that when healthier standards are in place, students may spend less on snacks, but they then spend more on meals. And when students buy school meals, the school gets additional reimbursement from the United States Department of Agriculture (USDA). This suggests that schools that make the switch to healthy snack food and beverages tend to see any reduction in sales of snacks more than made up for by increased revenue in the school meals program.

JDB: This explains how thousands of schools around the country that have been working to improve the nutrition of the snacks sold were able to do so in a financially sound way. School districts that have had the most success making the foods sold in schools healthier have done so by making kids part of the process. In particular, including students in the selection of healthier snack foods and beverages via surveys, focus groups, and/or taste tests, as well as talking to them about the reasons for changes, can lead to improved student acceptance and consumption of the healthier items.

Can you give us an example of a school district that is doing a good job with making snacks healthier? What was the financial impact of these changes?

JDB: Cincinnati public schools have made tremendous improvements in this area. The School Food Service Director, Jessica Shelly, worked with district administrators and the school board to implement Ohio’s nutrition standards for snack foods and beverages a full year before they were required to do so by the state. Since implementing these guidelines, the district has seen a dramatic increase in school meal participation—64 percent in high schools and 90 percent in elementary schools—which turned a previous budget deficit into a $4.5 million surplus. Because the district drastically improved school meals and made changes to snacks at the same time, students couldn’t turn to less healthy snacks and were driven to try the new and improved lunch program, increasing meal participation to its highest level in two decades. As a result, more students throughout the city are receiving a well-balanced, nutritious lunch.

What other variables did you consider when reviewing the data?

NW: We wanted to make sure that any changes in school food service revenue could be attributed to the implementation of snack food and beverage standards. To do this, we also took in to account the growth in school enrollment; local child poverty and hunger rates,; the proportion of children in elementary, middle, or high school; the ethnic make-up of school children,; and any growth in the number of schools in a state over this time period. Our findings held after we controlled for all of these factors.

With new nutrition standards for school meals currently being implemented, what challenges remain in the school food environment?

JDB: The updates to nutrition standards for school meals mean that kids are now seeing more servings and varieties of fruits, vegetables, whole grains, and low-fat dairy. That’s great news, but there’s definitely still more to be done. The next step in improving the school food environment is for the U.S. Department of Agriculture to refresh guidelines for all of the other foods sold in schools, such as snack foods and beverages available in school stores, a la carte lines, and vending machines. USDA just proposed updates to these guidelines for the first time in over 30 years. Given that in the same 30 years, childhood obesity rates have nearly tripled, it is critically important that USDA finalize these rules and ensure that all foods available to children are healthy foods.

What action do you want USDA to take?

JDB: We are urging USDA to work efficiently to finalize updated nutrition standards to help schools sell healthier snack foods and beverages in school stores, a la carte lines and vending machines. Additionally, USDA should consider adopting practices – as recommended in the HIA – to assist schools in effectively implementing these changes. This will be a huge step in ensuring that all foods and beverages sold in U.S. schools are healthy.