Evaluation of the Healthy Fluid Milk Incentives Project, Fiscal Years 2021, 2022, and 2023

Evaluation of the Healthy Fluid Milk Incentives Project, Fiscal Years 2021, 2022, and 2023

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Section 4208 of the Agriculture Improvement Act of 2018 (PL 115-334; the Act) authorized the Secretary of Agriculture to carry out Healthy Fluid Milk Incentives (HFMI) projects to develop and test methods to increase the purchase and consumption of fluid milk by the United States Department of Agriculture, Food and Nutrition Service's (FNS) Supplemental Nutrition Assistance Program (SNAP) households by providing incentives at the point of purchase.¹

The Act defines fluid milk qualifying for incentives as all varieties of pasteurized cow's milk that are (1) unflavored and unsweetened, (2) consistent with the most recent dietary recommendations, (3) packaged in liquid form and, (4) contain vitamins A and D in amounts consistent with Food and Drug Administration, state, and local standards for fluid milk. The Act authorized $20 million to be appropriated for the HFMI projects, to remain available until expended. By the end of fiscal year (FY) 2024, Congress had appropriated $11 million of the $20 million available. The Act requires an independent evaluation stipulating that no more than seven percent of the appropriated funds be spent on the evaluation.²

Appropriated funds awarded to HFMI pilot projects through FY 2024 are presented in Table 1. The numbers of participating states and stores have continued to increase since FY 2020. Stores participating in the initial pilot projects delivered incentives to SNAP households via coupons generated by SNAP Electronic Benefits Transfer (EBT) purchases on qualifying milk (nonfat and 1% low-fat). The coupons (usually paper) could be redeemed in a future shopping trip. A few FY 2022 pilot stores and all FY 2023 pilot stores are applying an automatic point-of-sale-discount when SNAP EBT is used to purchase qualifying milk.

Key Findings

• During the FY 2021 pilot, participating SNAP households redeemed 17% of issued coupons and incentive dollars, totaling $42,411 in redeemed dollars. The 41 participating stores issued 71,145 coupons worth a total of $250,219 during 17 months of operations.
• In the ongoing FY 2022 pilot, SNAP households redeemed 82% of incentive dollars issued across 111 stores between May 2023 and July 2024. The robust performance is largely aided by 80 stores operating under a retailer that targets the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) program and utilizes electronic coupons issued via customer loyalty accounts, reporting 93% of issued value redeemed through July 2024. The remaining retailers have cumulatively reported 21% of coupons and 19% of issued value redeemed through July 2024. A total of 34,190 coupons and $246,674 incentive dollars have been issued thus far in the FY 2022 pilot.
• As most paper coupons went unredeemed, beginning with the FY 2023 award, grantees now are required to operate models that immediately apply earned incentives at the point of sale. The FY 2023 pilot stores are utilizing an automatic discount at the time of purchase.
• FY 2022 pilot retailers who opted to switch from coupons to automatic discounts reported increased take-up of incentives. Stores who made the switch have issued an average of $86 per store per month (totaling $2,743 to date), compared to $22 in average redeemed incentive dollars per store per month in stores that retained the paper coupon model (totaling $7,652 to date).
• Through July 2024, the FY 2023 pilot issued $261,518 in incentive dollars across 502 stores.
• Across all three pilot years, qualifying healthy milk sales at participating stores represent a minority of milk purchased using SNAP EBT, indicating that SNAP households are predominantly purchasing higher fat and/or flavored milk at participating retailers. Qualifying milk was typically less than 25% of fluid milk purchases by SNAP households in stores offering HFMI incentives, even with a 40 to 50% automatic discount.

¹Agriculture Improvement Act of 2018, Public Law 115-334-DEC. 20, 2018. Sec 4208. Healthy fluid milk incentives projects. www.govinfo.gov/app/details/PLAW-115publ334/.
²The evaluation was conducted by USDA staff as the funding available for the evaluation from the amount appropriated each FY could not support an evaluation contract.