N° 12 | May 2007

The public policy of generic food marketing for fruits and vegetables

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The economics of food marketing are very different for branded products (such as Coca-Cola) and generic products (such as most spinach sold in bulk). The producer of a branded product has a strong incentive to advertise. By contrast, the producer of a generic product knows that any voluntary advertising expenditure will benefit competitors. In economic jargon, the competitors will be “free riders.”

Of course, there are some branded fruit and vegetable products (such as Dole packaged spinach, to continue the spinach example). However, at least in the United States, it is clear that product branding -- and hence voluntary advertising -- is much less prevalent in the fruit and vegetable industries than in other segments of the food market. This disparity leads to a concern that private-sector incentives favor the advertising of comparatively unhealthy foods and penalize the advertising of fruits and vegetables.

Producers of unbranded food products have sought government assistance in solving the “free rider” problem in marketing generic food products. In the case of fruits and vegetables, producer organizations, nutrition foundations, and the federal government all perceive the merit in generic marketing and promotion. One result has been the “5-a-day” and later “5-to-9-a-day” program, which is a public/private partnership that encourages consumers to increase their daily servings of all fruits and vegetables, regardless of the brand. In addition to this national partnership, some regional fruit and vegetable marketing orders include mandatory producer contributions to a marketing budget.

However, these fruit and vegetable promotion programs are only a very small part of the U.S. federal government’s interventions to help food producers solve their “free rider” problem and promote their generic products. For example, the contribution to the “5-to-9-a-day” program from the federal government’s National Institutes of Health was merely $3.6 million in 2001. More recently, the federal participation in the program has been administered by the Centers for Disease Control (CDC), but it is not clear how much money CDC commits to this effort (multiple email requests to the CDC’s program and public information offices over several weeks could not turn up a specific dollar figure).

By contrast, the federal government offers much greater help to the powerful meat and dairy industries through the federal generic commodity promotion programs, known as “checkoff” programs. As recently summarized in a longer perspective article:

The advertising campaigns from the checkoff programs include: “Beef. It’s What’s for Dinner,” “Ahh, the Power of Cheese,” “Pork. The Other White Meat,” “Got Milk?,” and the “Milk Mustache” campaign. These campaigns are so familiar that many readers will recognize the slogans immediately and be surprised only to hear that they are federally sanctioned. They are. 
The programs are established by Congress, approved by a majority of the commodity’s producers, managed jointly by a producer board and the U.S. Department of Agriculture (USDA), and funded through mandatory assessments on the producers. The federal government enforces the collection of the mandatory assessments, approves the advertising and marketing programs, and defends checkoff communication in court as the federal government’s own message -- in legal jargon, as its own “government speech”(1).

Using the federal government’s powers of taxation, these checkoff programs collected more than $600 million from producers in 2004. The checkoff promotions sometimes put the federal government in the awkward position of undermining the more scientifically deliberate nutrition messages of the Dietary Guidelines for Americans, which are intended as the government’s authoritative statement on nutrition communication. For example, the Guidelines related to obesity prevention do not focus on particular nutrients, as in the “lowcarb” fad diets favored by the meat industry or the “highcalcium” fad diets favored by the dairy industry. Instead, the Guidelines focus on overall calorie balance within the context of a healthy diet that is high in fruits, vegetables, and low fat dairy:

• To maintain body weight in a healthy range, balance calories from foods and beverages with calories expended.
• To prevent gradual weight gain over time, make small decreases in food and beverage calories and increase physical activity(2).

By contrast, the federal government’s pork checkoff program relies on a low-carb dietary message, “Counting carbs? Pork’s perfect.” The federal government’s dairy checkoff program used weight loss as a central theme in the last couple years: “3-a-Day. Milk-cheese-yogurt. Burn more fat, lose weight”(1). Far from adhering to the Dietary Guidelines’ emphasis on lowfat dairy products, the dairy checkoff advertisements commonly promote milk and cheese without reference to fat content, and they sometimes promote products that are high in fat and saturated fat, as in the checkoff program’s recent collaboration with Pizza Hut to promote a three-cheese stuffed crust pizza or its collaboration with Wendy’s to promote the Wild Mountain Bacon Cheeseburger.

Observers of nutrition policy in the United States have some hope that the upcoming 2007 Farm Bill, which reauthorizes a wide array of agricultural and food programs, will be more favorable to fruit and vegetable production and promotion than such bills have been in the past. At the same time, the political calculation that favored meat and dairy promotion at the expense of the Dietary Guidelines in past years has not fundamentally changed. It remains to be seen whether U.S. public policy can support nutrition objectives through fruit and vegetable promotion on a scale that would noticeably compete with other subsidy programs in the agriculture budget or with other food products in the advertising marketplace.

  1. Wilde P. Federal Communication about Obesity in the Dietary Guidelines and Checkoff Programs. Obesity. 2006;14: 967-973.
  2. U.S. Department of Health and Human Services and U.S. Department of Agriculture. Dietary Guidelines for Americans, 2005 (6th Edition). Washington, DC: U.S. Department of Health and Human Services and U.S. Department of Agriculture; 2005.
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