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Symposium: Sugar and Fat-From Genes to Culture

Pricing Effects on Food Choices^1,2

Division of Epidemiology, School of Public Health, University of Minnesota, Minneapolis, MN 55454-1015

³To whom correspondence should be addressed. E-mail: french{at}epi.umn.edu.

	ABSTRACT

TOP ABSTRACT Foods away from home Individual food choices Price reduction intervention... LITERATURE CITED

 
Individual dietary choices are primarily influenced by such considerations as taste, cost, convenience and nutritional value of foods. The current obesity epidemic has been linked to excessive consumption of added sugars and fat, as well as to sedentary lifestyles. Fat and sugar provide dietary energy at very low cost. Food pricing and marketing practices are therefore an essential component of the eating environment. Recent studies have applied economic theories to changing dietary behavior. Price reduction strategies promote the choice of targeted foods by lowering their cost relative to alternative food choices. Two community-based intervention studies used price reductions to promote the increased purchase of targeted foods. The first study examined lower prices and point-of-purchase promotion on sales of lower fat vending machine snacks in 12 work sites and 12 secondary schools. Price reductions of 10%, 25% and 50% on lower fat snacks resulted in an increase in sales of 9%, 39% and 93%, respectively, compared with usual price conditions. The second study examined the impact of a 50% price reduction on fresh fruit and baby carrots in two secondary school cafeterias. Compared with usual price conditions, price reductions resulted in a four-fold increase in fresh fruit sales and a two-fold increase in baby carrot sales. Both studies demonstrate that price reductions are an effective strategy to increase the purchase of more healthful foods in community-based settings such as work sites and schools. Results were generalizable across various food types and populations. Reducing prices on healthful foods is a public health strategy that should be implemented through policy initiatives and industry collaborations.

KEY WORDS: • price • food choice • nutrition intervention • eating behavior

The prevalence of obesity and overweight has increased dramatically over the past two decades (1 –4 ). The current obesity epidemic is caused by an environment that promotes excessive food intake and discourages physical activity (5 ,6 ). Environmental influences on eating behavior include the changing nature of the food supply, increased reliance on foods away from home, food advertising, marketing and promotion and food pricing (5 ). The role of fats and sugar in the food supply and dietary intake trends is discussed elsewhere (7 ). The present report focuses on food marketing practices and pricing strategies.

	Foods away from home

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Foods away from home captured 40% of total food spending in 1995 (8 ). "Home" and "away from home" foods are defined based on where the foods are obtained, as opposed to where they are eaten. Foods at home are those purchased at a retail store, a grocery store, a convenience store or a supermarket and prepared for home consumption (8 ). Foods away from home include those obtained from fast food establishments, schools, restaurants, other public places and vending machines. Away from home foods are typically ready-to-eat and consumed "as is," and the consumer has less control over portion size and nutritional content (8 ).

It is well documented that portion sizes for foods purchased at fast food places and restaurants have increased sharply over the past two decades (9 ). Prepackaged foods purchased in grocery and convenience stores are also being marketed in larger sizes (5 ,10 ). For example, in the 1950s, Coca-Cola was marketed in 6.5-oz single-serving bottles. The 12-oz can became the single-serving soft drink size in the 1970s. In 2000 the 20-oz bottle was the typical single-serving size, a 250% increase from the 1950s. Fast food restaurants market supersized sandwiches such as the Big Mac (216 g; 570 kcal); supersized French fries (198 g; 610 kcal) and 42-oz soft drinks (11 ). Candy bars and potato chips that used to be prepackaged in 1-oz servings are now marketed in 2- to 3-oz single-serving packages (10 ). Bagels and muffins that used to be 2 to 3 oz are now typically 4 to 7 oz (10 ).

Larger packages and larger serving sizes may encourage greater consumption at any one meal or eating episode through a variety of physiological or cognitive mechanisms (12 ). People may underestimate their intake as they purchase larger packages or are offered larger servings at restaurants. Experimental research shows that larger packages of familiar brand products encourage the consumption of greater quantities, in part due to perceived lower food cost (12 ). In naturalistic settings, larger packages are frequently priced less per ounce compared with smaller packages, so this perception is in fact correct. For example, the cost per ounce for soft drinks purchased at a convenience store is $0.05 per ounce for a 12-oz serving but only $0.023 per ounce for a 42-oz serving. This research also suggests that people will consume a greater quantity of food or beverage from a "supersize" serving portion compared with a small portion, especially if the price per ounce is less (5 ,12 ).

	Individual food choices

TOP ABSTRACT Foods away from home Individual food choices Price reduction intervention... LITERATURE CITED

 
Individual food choices are influenced by a wide variety of environmental and individual variables. Three main dimensions related to food choices are taste, perceived value (which includes price and portion size) and perceived nutrition (13 ,14 ). Foods vary along each of these evaluative dimensions. Individuals also vary in terms of the importance placed on each dimension (13 –15 ). For example, individuals of lower socioeconomic status may place greater importance on perceived value, whereas those who are mainly concerned about health and nutrition may place greater importance on the nutritional quality of foods (15 ). In general, people may possess knowledge about healthful food choices, but when considered in tandem with the choice dimensions of price and taste, they may choose the tastier and cheaper, but less nutritious, food. An important question for public health promotion efforts in the area of healthful food choices is, "Can people be influenced to purchase and consume more healthful foods if the foods are increased in attractiveness through lowering prices?"

	Price reduction intervention studies

TOP ABSTRACT Foods away from home Individual food choices Price reduction intervention... LITERATURE CITED

 
Price reduction intervention strategies to increase the purchases of healthful foods were examined in a series of studies by French et al. (16 –20 ). CHIPS (Changing Individuals’ Purchase of Snacks) examined the effect of a range of price reductions and point-of-purchase promotions on sales of lower fat vending machine snacks at 12 work sites and 12 secondary schools in Minnesota (16 ). All vending machines at each of the sites were stocked with lower fat snacks (17% of the machine inventory). Prices on lower fat snacks were reduced relative to the higher fat snacks by 10%, 25% and 50%.

The percentage of lower fat snacks sold under each price reduction condition is shown (Fig. 1 ). Price reduction was associated with a significant increase in percentage of lower fat snack sales. When prices were reduced by 10%, 25% and 50%, the percentage of lower fat snack sales increased by 9%, 39% and 93%, respectively. Promotion had a small but significant independent effect on percentage of lower fat snack sales. Overall, snack sales volume also significantly increased in the 25% and 50% price reduction conditions. Average monthly profits per machine did not significantly differ by price reduction condition.

View larger version (31K): [in this window] [in a new window]   FIGURE 1 Low-fat snack sales as a function of price. From French et al. (18 ).

The price reduction targeting fruits and vegetables was implemented in two secondary school cafeterias. One school was located in a primarily white, middle-income suburban area, whereas the other school was located in an urban area with a mixed ethnic and socioeconomic population. Fresh fruit and baby carrots were targeted for 50% price reductions. Results showed that during the price reduction period, sales of fresh fruit increased four-fold, from 14 items per week to about 63 items per week (Fig. 2 ), and sales of baby carrots increased two-fold, from 37 packets per week to 77 packets per week (Fig. 3 ). Sales returned to baseline levels with the reinstatement of usual prices.

View larger version (25K): [in this window] [in a new window]   FIGURE 2 Fruit sales as a function of price. From French et al. (16 ).

View larger version (23K): [in this window] [in a new window]   FIGURE 3 Carrot sales as a function of price. From French et al. (18 ).

These school-based data suggest that a strategy that implements small price increases on popular high fat foods and modest price reductions on lower fat foods is potentially financially feasible as a long-term strategy to promote healthful food choices. Altering the hierarchy of food prices is a way to influence the economics of food choice. The economic strategy merits further study using a broader range of foods and settings. The success of this or other pricing strategies may be limited to controlled settings such as work site and school cafeterias, in which food choices are somewhat limited and the population is a "captive audience." However, the pricing strategy holds promise as a powerful means to influence food choices. Further work is merited to examine the effects of simultaneous price increases and decreases on food revenues and sales volume.

Price incentives can be an effective intervention strategy to influence individual food purchases. Price reductions had consistent and strong effects on purchasing patterns of targeted foods in work site and school cafeteria settings. These results were generalizable across diverse foods such as prepackaged snacks and fresh fruits and vegetables. Food choices were consistent across adolescent and adult populations and across diverse socioeconomic groups.

These studies have implications for the marketing of low nutrient–dense foods as opposed to more healthful foods. Specifically, removing price incentives for "supersize" portions on high fat, high energy foods might be an effective strategy to limit the purchase and consumption of low nutrient–dense foods by the consumer. The effect on food choices of price increases and decreases of various magnitudes also merits further study. An important consideration is the effect of pricing strategies on food choices at the individual versus the population level. Pricing effects could be quite different on individual food choices in a cafeteria setting versus at the population consumption level. At the population level, through policy changes, pricing strategies potentially could be used to encourage fruit and vegetable consumption through government price subsidization or to influence food choices among participants in government-sponsored food assistance programs. Clearly, more research is needed to better understand the potential effects of various pricing strategies on individual and population food choices.

	FOOTNOTES

 
¹ Presented as part of the symposium "Sugar and Fat-From Genes to Culture," given at the Experimental Biology ’02 meeting in New Orleans, LA, April 23, 2002. This symposium was sponsored by the American Society for Nutritional Sciences and was supported in part by educational grants from ILSI North America and ILSI Research Foundation. Guest editors for this symposium publication were Adam Drewnowski, Center for Public Health Nutrition, University of Washington, Seattle, WA, and Allen Levine, Minnesota Obesity Center, Minneapolis VA Medical Center, Minneapolis, MN.

² This research was supported by a grant from the National Institutes of Health R01 HL56577 with supplemental funding from the Centers for Disease Control and Prevention.

	LITERATURE CITED

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1. U.S. Department of Health and Human Services (2001) The Surgeon General’s Call to Action to Prevent and Decrease Overweight and Obesity 2001 U.S. Department of Health and Human Services, Public Health Service, Office of the Surgeon General Rockville, MD .

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4. Flegal, K. M., Kuczmarski, R. J. & Johnson, C. L. (1998) Overweight and obesity in the US: prevalence and trends, 1960–1994. Int. J. Obes. 22:39-47.[Medline]

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7. Drewnowski, A. (2003) Fat and sugar: an economic analysis. J. Nutr. 133(suppl):838S-840S.[Abstract/Free Full Text]

8. Lin, B. H., Guthrie, J. & Frazao, E. (1999) Nutrient contribution of food away from home. Frazao, E. eds. America’s Eating Habits: Changes and Consequences 1999:213-242 U.S. Department of Agriculture, Economic Research Service Washington, D.C. Agriculture Information Bulletin No. 750.

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14. French, S. A., Story, M., Hannan, P., Breitlow, K. K., Jeffery, R. W., Baxter, J. S. & Snyder, M. P. (1999) Cognitive and demographic correlates of low-fat vending snack choices among adolescents and adults. J. Am. Diet. Assoc. 99:471-475.[Medline]

15. Solheim, R. & Lawless, H. T. (1996) Consumer purchase probability affected by attitude toward low fat foods, liking, private body consciousness and information on fat and price. Food Qual. Pref. 7:137-143.

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18. French, S. A., Story, M., Jeffery, R. W., Snyder, P., Eisenberg, M., Sidebottom, A. & Murray, D. (1997) Pricing strategy to promote fruit and vegetable purchase in high school cafeterias. J. Am. Diet. Assoc. 97:1008-1010.[Medline]

19. Hannan, P., French, S. A., Story, M. & Fulkerson, J. A. (2002) A pricing strategy to promote purchase of lower fat foods in a high school cafeteria: acceptability and sensitivity analysis. Am. J. Health Promot. 17:1-6.[Medline]

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