david just presentation at 2011 access to healthy foods summit
DESCRIPTION
David Just's presentation about behavioral purchasing as it relates to foods. Presented at the 2011 Access to Healthy Foods Summit in Seattle, WA.TRANSCRIPT
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