Nutrition Incentives are the Future of SNAP

March 15, 2021

By Molly Pfaffenroth, NGA Senior Director of Government Relations

Independent community grocers are critical partners in the public-private partnership of the Supplemental Nutrition Assistance Program (SNAP). With grocers uniquely and best positioned to implement this program  in their communities, many of which are rural and urban food desert areas, SNAP is one of the most efficient and effective federal programs in existence. 

The demand for federal nutrition programs such as SNAP has skyrocketed during the COVID-19 pandemic as many Americans have been without work and schools have been physically shut down, meaning many students haven’t had access to school meals in the same ways they did previously. 

Efforts to restrict the items that SNAP consumers are eligible to purchase using their benefits is an approach that several stakeholders have taken throughout the years with the goal of impacting the nutrition decisions and health of Americans. However, there is a more impactful strategy for helping SNAP participants consume healthy foods without having to restrict the items they are eligible to purchase: nutrition incentive programs. 

The Gus Schumacher Nutrition Incentive Program (GusNIP), formerly known as the Food Insecurity Nutrition Incentive Program (FINI), was established by the 2014 Farm Bill and incentivizes SNAP consumers for purchasing fruits and vegetables using their benefits by various models, such as providing a discount at the point of purchase or a voucher for future produce purchase. GusNIP is administered through the U.S. Department of Agriculture’s National Institute of Food and Agriculture (NIFA) and provides grant funding to non-profits and local government agencies to implement nutrition incentive projects at participating retail locations. 

While hundreds of retail food stores, farmers markets, supermarkets and convenience stores participate in the GusNIP program, grocery stores can reach more SNAP customers and have higher capacity to analyze and evaluate SNAP purchasing habits over time due to their ability to retain customer purchase data. 

Preserving consumer choice is critical for a strong and efficient SNAP program. Today, there are more than 300,000 food items in the marketplace with more than 15,000 new food items being introduced annually. With 20,000 to 30,000 items carried at each individual supermarket on a given day, placing restrictions on SNAP-eligible items would create significant costs and administrative burdens for grocers in a 1-2 percent profit margin business, as well as stigma for a program that public and private partners have worked diligently to destigmatize throughout the past several decades. 

Nutrition incentive programs like GusNIP empower consumers to purchase healthy fruits and vegetables, prevent stigma and are a much more successful long-term strategy to encouraging healthy eating than by allowing the government to decide which food items a SNAP consumer may purchase. Rightfully said, nutrition incentives are the future of SNAP. 

Applications are currently being accepted for new GusNIP grantees, meaning that more stores will soon be able to offer this important service to their customers. However, methodologies to conduct nutrition incentive transactions have often proved difficult and expensive to implement at the point of sale (POS), thus inhibiting expansion of programs in more retail food stores. In some cases, retailers are unable to launch nutrition incentive programs due to a lack of POS system capabilities to electronically process incentive transactions. 

The main barrier that retailers often run into is that it is technically challenging to develop a POS system that automatically triggers a discount on produce based on Electronic Benefit Transfer (EBT) payment tender, the type of payment SNAP consumers use to purchase items using their monthly benefits. This issue has actually prevented many retailers from even pursuing GusNIP projects since it becomes so technically difficult to set up a program at the register.  

There is an immense need for a national POS solution for GusNIP, which will allow the program to expand and become scalable nationwide much more successfully and get healthy foods into consumers’ hands. 

NGA believes that POS system developers, food retailers, associations and nutrition incentive program stakeholders should collaborate to develop comprehensive nutrition incentive POS transaction solutions so that retailers have ability to conduct efficient and accurate nutrition incentive transactions on all existing POS systems.