One might question the social importance and magnitude of under-provision of advertising for generic commodities. However, contrast the public health impacts from the types of foods associated with the majority of branded advertising, such as soda, beer, chips, and candy, to the types of foods that now benefit from mandatory generic advertising, such as fruits, vegetables, nuts, chicken, pork, beef, and milk. Not only do the generic commodities comprise the key nutritional elements of the United States Department of Agriculture food pyramid but these commodities also tend to be low in fat and salt (in comparison to branded snack foods and restaurant meals) and represent the bulk of what might be called the components of a healthy diet. If generic advertising for agricultural commodities collapses because mandatory programs are declared unconstitutional, the "Dancing Raisins" will be gone and the vast majority of ads for snacks will be for chips, cookies, and candy. Given important health problems such as obesity, juvenile diabetes, and osteoporosis, the under-funding of generic commodity advertising has serious public health consequences.Professor Wilde did not buy our argument justifying generic advertising for generic commodities, arguing:
Years of previous coverage here (and here) cast doubt on the claim that checkoff advertising is largely consistent with federal dietary guidance. The dancing raisins comparison is misleading, since a tiny fraction of checkoff advertising is for fruits and vegetables, while much of the funding is for high fat beef and pork and cheese. I don't think there even is a federal checkoff program for raisins. Raisins are not mentioned in Becker's CRS report (.pdf). Perhaps those ads were from a California state level board? If you believe that the checkoff programs are mostly about skim milk, not cheese, you've been hoodwinked by the public relations. I am not sure where the "low fat" comment came from -- federal dietary guidance gives greatest importance to saturated fat rather than total fat, and the products covered by checkoff programs are disproportionally high contributors to saturated fat in U.S. diets, compared to foods not covered by checkoff programs. And, how could lower checkoff advertising possibly lead to obesity? This is a very, very bad paragraph.We do not share Wilde’s view that this is a very, very bad paragraph. Rather, we continue to believe that the nutritional state of consumers in the United States would be worse without generic food advertising programs. Here’s why.
The ERS publication, Amber Waves, recently reported the results of a study that indicates average per capita daily caloric intake in the United States has increased by a whopping 523 calories since 1970. It is no wonder we have an obesity problem with such a significant increase in caloric intake. However, when you examine the breakdown of changes in specific categories of foods consumed, which is provided in the table below, it becomes clear that there is no link between the introduction of generic food advertising and obesity. Wilde correctly points out that a sizable proportion of generic food advertising is for fluid milk, cheese, beef, and pork, but look at how caloric intake has changed for these categories since 1970. Dairy is actually down 11 calories per person per day, and meat, eggs, and nuts is up by only 24 calories. So to blame generic food advertising for changes in fluid milk, dairy, beef, and pork per capita consumption is a weak argument since there was basically no change in consumption of these commodities since 1970.
It appears from this table that the real culprit in increasing obesity is the tremendous increase in consumption of fat and oils, which increased by 216 calories since 1970. I am not aware of any significant generic advertising program for fats and oils. Our caloric intake of sugar and sweeteners also increased a sizable 76 calories over this period, and while there is a voluntary generic sugar advertising program, it is very small, and probably had little to no impact on this increase. My guess is that most of the increase in sugar, fats, and oils calories is due to us consuming a lot more soda, candy, junk food and fast food than we consumed in 1970. A major contributor to this change in consumption habits is the huge amount of brand advertising for these items, which completely overshadows the amount of generic food advertising.
Wilde asks: “how could a decrease in generic advertising possibly lead to obesity?” The answer is generic advertising of agricultural commodities has basically been a defensive strategy by our nation’s agricultural producers to stabilize tremendous losses in market share lost to increasing soda, chips, candy, and fast food consumption. For example, one of the major reasons dairy farmers initiated generic milk advertising in the mid-1980s was to combat huge losses in market share to Coca Cola, Pepsi, and other soda companies that were outspending the American Dairy Association by a ratio of 16 to 1 (Leading National Advertisers, 1980-1984). From 1970 to 2001, annual per capita soda consumption more than doubled, increasing from 21.9 gallons in 1970 to 54.3 gallons in 1999 (Beverage Marketing Corporation). Over that same time period, annual per capita consumption of fluid milk products decreased over threefold from 25 to 8 gallons (Putnam and Allshouse, 2003). Much of the loss in milk consumption over this period was the result of aggressive advertising (and other promotional strategies) by soda companies, which continue to outspend milk advertising by a substantial amount. For example, in 2003, even with a mandatory program, total soda advertising ($1.25 billion) was still 6.5 times the combined amount spent by dairy farmers and milk processors ($193 million) (Leading National Advertisers, 2003). Unfortunately, in 2007 combined generic fluid milk advertising has fallen to about $80 million, along with per capita fluid milk consumption, while obesity continues to rise.
We agree with Professor Wilde that there could be improvements in mandatory generic advertising programs for food. More emphasis should be given to healthy foods such as fruits and vegetables and lower fat products. There has been some progress in this area over the last ten years. There are now more generic advertising programs for fruits and vegetables than there were in the past. There is generic advertising for the majority of fruits and vegetables consumed in the United States. In the past, generic milk advertising did not differentiate among whole, reduced fat, low fat, and skim milk, and now we are seeing more examples of skim and lowfat “milk mustache” advertisements. At the same time, there are some examples of promotional efforts that are not consistent with nutrition guidelines, and we support efforts to promote lower fat products like lowfat and skim milk, lowfat cheese, and leaner cuts of beef and pork. But our point has always been that generic advertising of healthy food is a desirable feature of these mandatory, self-help programs.
The ERS per capita data represent the amount of calories available for consumption after adjusting for spoilage, plate waste, and other losses in the home or marketing system.
Harry M. Kaiser
Gellert Family Professor of
Applied Economics and Management