News highlights, market trends, and original data analysis related to the U.S. retail food & beverage industry … by Jay Nargundkar
Government assistance for poor Americans in the form of “food stamps”, more formally known as the Supplemental Nutrition Assistance Program (SNAP), is not well understood. That’s true even in the food industry, where some manufacturers who make “value” brands are doing themselves a disservice by not understanding the nuances of this large group of consumers.
Luckily, the USDA publishes a highly-readable, comprehensive overview of the program and SNAP participant characteristics on its website in a document titled “Building a Healthy America: A Profile of the Supplemental Nutrition Assistance Program”.
Who is on SNAP?
SNAP participation levels follows economic cycles in the U.S. Participation has generally been on a steady upswing since 2001, and hit 45 million participants in 2011, the most recent year data was provided for. The government report reveals that SNAP families and high-income families have an almost identical distribution of income on a percentage basis across high-level food categories (e.g. cereal, dairy products, meat and eggs).
However, there are some differences on the specific purchasing habits of low-income families.
They are somewhat less likely to consume:
- Whole grains
- Raw vegetables
- Reduced-fat milk
- Sugar-free soda
- Foods suggested for selective or frequent consumption
They are somewhat more likely to consume:
- Cornbread or corn tortillas
- Whole milk
- Regular soda
- Food suggested for occasional consumption
What can food stamps be redeemed for?
SNAP benefits can be used to buy:
SNAP benefits can not be used to buy:
Where and how can food stamps be redeemed?
Food stamps can only be redeemed at authorized retailers. At the end of 2011 there were approximately 231,000 retailers eligible to received food stamps as payment.
The majority of authorized stores are supermarkets and super stores; small, medium, and large groceries; and convenience stores. In fiscal year 2010, 17 percent of all authorized stores were supermarkets or super stores, 15 percent were grocery stores, and 36 percent were convenience stores. Most other authorized firms were specialty food stores or combination markets.
Recently there has been a shift to providing “food stamp” benefits on debit cards, known as EBT cards, for ease of processing and to reduce stigma against users. The use of EBT cards has been rolled out nationwide; the amount on cards cannot be exchanged for cash, and are similarly eligible for use only at authorized retailers.