National School Lunch Program and School Breakfast Program: Nutrition Standards for All Foods Sold in School as Required by the Healthy, Hunger-Free Kids Act of 2010, 9529-9567 [2013-02584]
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Vol. 78
Friday,
No. 27
February 8, 2013
Part III
Department of Agriculture
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Food and Nutrition Service
7 CFR Parts 210 and 220
National School Lunch Program and School Breakfast Program: Nutrition
Standards for All Foods Sold in School as Required by the Healthy,
Hunger-Free Kids Act of 2010; Proposed Rule
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Federal Register / Vol. 78, No. 27 / Friday, February 8, 2013 / Proposed Rules
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 210 and 220
[FNS–2011–0019]
RIN 0584–AE09
National School Lunch Program and
School Breakfast Program: Nutrition
Standards for All Foods Sold in School
as Required by the Healthy, HungerFree Kids Act of 2010
Food and Nutrition Service,
USDA.
ACTION: Proposed rule.
AGENCY:
This rule proposes to amend
the National School Lunch Program and
School Breakfast Program regulations
consistent with amendments made in
the Healthy, Hunger-Free Kids Act of
2010 (HHFKA). The HHFKA requires
that the Secretary promulgate proposed
regulations to establish nutrition
standards for foods sold in schools other
than those foods provided under the
Child Nutrition Act of 1966 (CNA) and
the Richard B. Russell National School
Lunch Act (NSLA). The HHFKA amends
the CNA, requiring that such standards
shall be consistent with the most recent
Dietary Guidelines for Americans and
that the Secretary shall consider
authoritative scientific
recommendations for nutrition
standards; existing school nutrition
standards, including voluntary
standards for beverages and snack foods;
current State and local standards; the
practical application of the nutrition
standards; and special exemptions for
infrequent school-sponsored fundraisers
(other than fundraising through vending
machines, school stores, snack bars, a la
carte sales and any other exclusions
determined by the Secretary). The
HHFKA also amended the NSLA to
require that schools participating in the
National School Lunch Program make
potable water available to children at no
charge in the place where lunches are
served during the meal service. These
proposed changes are intended to
improve the health and well-being of
the Nation’s children, increase
consumption of healthful foods during
the school day and create an
environment that reinforces the
development of healthy eating habits.
DATES: Online comments submitted
through the Federal eRulemaking Portal
on this proposed rule must be received
on or before April 9, 2013. Mailed
comments on this rule must be
postmarked on or before April 9, 2013.
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SUMMARY:
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Comments on Paperwork Reduction
Act requirements: Comments on the
information collection requirements
associated with this rule must be
received by April 9, 2013.
ADDRESSES: The Food and Nutrition
Service (FNS) invites interested persons
to submit comments on this proposed
rule. Comments may be submitted by
either of the following methods:
• Federal eRulemaking Portal:
Comments on the provisions in this rule
must be received on or before April 9,
2013 to be assured of consideration. Go
to http://www.regulations.gov, select
‘‘Food and Nutrition Service’’ from the
agency drop-down menu, and click
‘‘Submit.’’ In the Docket ID column of
the search results select ‘‘FNS–2011–
0019’’ to submit or view public
comments and to view supporting and
related materials available
electronically. Information on using
Regulations.gov, including instructions
for accessing documents, submitting
comments, and viewing the docket after
the close of the comment period, is
available through the site’s ‘‘User Tips’’
link.
• By Mail: Mailed comments on the
provisions in this rule must be
postmarked on or before April 9, 2013
to be assured of consideration and
should be sent to Julie Brewer, Chief,
Policy and Program Development
Branch, Child Nutrition Division, Food
and Nutrition Service, P.O. Box 66874,
Saint Louis, MO 63166.
All submissions received in response
to this proposed rule will be included
in the record and will be available to the
public. Please be advised that the
substance of the comments and the
identity of the individuals or entities
submitting comments will be subject to
public disclosure. FNS will also make
the comments publicly available by
posting a copy of all comments on
http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Julie
Brewer, Chief, Policy and Program
Development Branch, Child Nutrition
Division, Food and Nutrition Service,
3101 Park Center Drive, Alexandria,
Virginia 22302, or by telephone at (703)
305–2590.
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose of the Regulatory Action
This proposed rule sets forth
provisions to implement sections 203
and 208 of Public Law 111–296, the
Healthy, Hunger-Free Kids Act of 2010
(HHFKA) for schools that participate in
the National School Lunch Program
(NSLP) and the School Breakfast
Program (SBP). This rule proposes to
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amend the NSLP and SBP regulations
consistent with amendments made in
the HHFKA. The HHFKA requires the
Secretary to promulgate proposed
regulations to establish nutrition
standards for foods sold in schools other
than those foods provided under the
Child Nutrition Act of 1966 (CNA) and
the Richard B. Russell National School
Lunch Act (NSLA). The HHFKA
specifies that such nutrition standards
apply to all foods sold (a) outside the
school meal programs; (b) on the school
campus; and (c) at any time during the
school day. In addition, the HHFKA
requires that such standards be
consistent with the most recent Dietary
Guidelines for Americans and that the
Secretary consider authoritative
scientific recommendations for nutrition
standards; existing school nutrition
standards, including voluntary
standards for beverages and snack foods;
current State and local standards; the
practical application of the nutrition
standards; and special exemptions for
infrequent school-sponsored fundraisers
(other than fundraising through vending
machines, school stores, snack bars, a la
carte sales and any other exclusions
determined by the Secretary). These
proposed changes are intended to
improve the health and well-being of
the Nation’s children, increase
consumption of healthful foods during
the school day and create an
environment that reinforces the
development of healthy eating habits.
The standards for food and beverages
proposed in this rule represent
minimum standards that local
educational agencies, school food
authorities and schools would be
required to meet. State agencies and/or
local schools would have the discretion
to establish their own standards for nonprogram foods sold to children should
they wish to do so, as long as such
standards are consistent with the final
minimum standards. This rule also
proposes to codify a provision of the
HHFKA that requires schools
participating in the NSLP to make free,
potable water available to children in
the place lunches are served during
meal service.
Summary of Major Provisions
In formulating the proposal, USDA
considered the Institute of Medicine’s
(IOM) 2007 Nutrition Standards for
Foods in Schools: Leading the Way
Toward Healthier Youth report, and
reviewed nutrition standards developed
by other entities, including existing
State and local standards, and voluntary
standards developed by organizations
such as the Alliance for a Healthier
Generation (AHG). Rather than offer a
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single approach, the proposal offers
alternatives in several areas and
requests comment on the relative merits
of each of the alternatives. (These are
noted below.)
Food Requirements—Under the
proposed rule, any food sold in schools
must:
(1) Be either a fruit, a vegetable, a
dairy product, a protein food, a ‘‘wholegrain rich’’ grain product (50% or more
whole grains by weight or have whole
grains as the first ingredient), or a
combination food that contains at least
@ cup of fruit or vegetable; or
(2) Contain 10% of the Daily Value
(DV) of a nutrient cited as a public
health concern in the 2010 Dietary
Guidelines for Americans (DGA)
(calcium, potassium, vitamin D, or
fiber).
Additionally, foods sold must meet a
range of calorie and nutrient
requirements:
• Total fat must be ≤35% of calories;
saturated fat must be <10% of calories;
and trans fat must be 0g as stated on the
label. Exemptions are provided for
reduced fat cheese; nuts and nut butters
without other ingredients and seafood
with no added fat.
• Snack items shall contain ≤200
´
milligrams of sodium. For entree items,
sodium levels must be ≤480 milligrams
´
per portion, for non-NSLP/SBP entree
items.
• For total sugar levels the proposal
includes two alternatives: one is ≤35%
of calories and the other is ≤35% of
weight. Exemptions are provided for
fruits and vegetables packed in juice or
extra-light syrup and for certain yogurts.
• Snack items have a limit on calories
of ≤200 calories per portion. Non´
NSLP/SBP entree items have a calorie
limit of ≤350 calories.
The proposal includes two
alternatives to exempt one set of foods
from the food requirements—NSLP/SBP
entrees and side dishes sold a la carte.
The first alternative would subject
NSLP/SBP menu items only to the fat
and sugar standards with no restrictions
regarding timeframes for the service of
such items sold a la carte. The second
alternative would exempt any menu
item served as part of the NSLP or SBP,
subject to specific timeframe restrictions
as outlined in the proposed rule (the
day that they are served in a meal or
within 4 operating days of service).
Beverage requirements
Under the proposal, all schools may
sell plain water, plain low fat milk,
plain or flavored fat-free milk and milk
alternatives permitted by NSLP/SBP,
and 100% fruit/vegetable juice. Portion
sizes of milk and juice vary by the age
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of students. Elementary schools may sell
up to 8-ounce portions. Middle schools
and high schools may sell up to 12ounce portions.
Beyond this, the proposal offers
additional beverage options in high
schools. These include 20 ounce
servings or less for calorie-free, flavored
and/or unflavored carbonated water and
other calorie-free beverages that comply
with the Food and Drug Administration
(FDA) standard of <5 cals/serving.
Additionally, the proposal would
allow 12 ounce servings of other
beverages within a specified calorie
limit. The proposal offers two
alternatives for this limit. The first is ≤
40 cals/8 oz serving (or ≤ 60 cals/12 oz
serving), and the second is 50 cals/8 oz
serving (or 75 cals/12 oz serving). Such
beverages shall not be available in the
meal service area during the meal
service periods.
Accompaniments—The proposal
requires accompaniments to be preportioned and offered only when food is
sold. In addition, accompaniments must
‘‘fit’’ within the nutrient profile of the
food that they accompany.
Fundraisers—The sale of food items
that meet the proposed nutrition
requirements at fundraisers would not
be limited in any way under the
proposed rule. However, the law
permits USDA to allow for a limited
number of fundraisers to sell food and
beverage items that do not meet the
proposed nutrition requirements.
Because of the wide variety of options
available with regard to the frequency of
fundraiser exemptions, the proposed
rule includes two alternative
approaches that provide discretion to
State agencies in determining the
frequency with which such fundraising
activities may take place, and requests
other suggestions. The proposed
standards would not apply to nonschool hours, weekends and off-campus
fundraising events.
Costs and Benefits
The principal benefit of the proposed
rule is improvement in public health.
The primary purpose of the proposed
rule is to ensure that competitive foods
are consistent with the most recent
DGA, effectively holding competitive
foods to the same standards as other
foods sold at school during the school
day. The link between poor diet and
health problems (such as childhood
obesity) is a matter of particular policy
concern because the relevant health
problems produce significant social
costs; imposing nutrition standards on
competitive foods is one way to ensure
that children are provided with healthy
food options throughout the school day.
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We anticipate the proposed rule will
result in significant changes to the
nutritional quality of competitive foods
available in schools, although it is not
possible to quantify those benefits on
overall diets or student health. Excess
body weight has long been
demonstrated to have adverse health,
social, psychological, and economic
consequences for affected adults, and
recent research has also demonstrated
that excess body weight has negative
impacts for obese and overweight
children. Ancillary benefits, which are
also not quantifiable at the present time,
may also be realized by the nutrition
standards in the proposed rule, e.g.,
improving the nutritional value of
competitive foods will support the
efforts of parents to promote healthy
choices at home and at school, reinforce
school-based nutrition education and
promotion efforts, and contribute
significantly to the overall effectiveness
of the school nutrition environment in
promoting healthful food and physical
activity choices.
The proposed rule requires schools to
improve the nutritional quality of foods
offered for sale to students outside of
the Federal school lunch and school
breakfast programs. The new standards
`
apply to foods sold a la carte, in school
stores, snack bars, or vending machines.
Upon implementation of the rule,
students will face new food choices
from these sources. The new choices
will meet standards for calories, fat,
saturated fat, sugar, and sodium, and
have whole grains, low fat dairy, fruits,
vegetables, or protein foods as their
main ingredients. Our analysis
examines a range of possible behavioral
responses of students and schools to
these changes. To estimate the effects on
school revenue, we look to the
experience of school districts that have
adopted or piloted competitive food
reforms in recent years. While no State
standard aligns to all of the provisions
of the proposed rule, these State
programs offer the closest ‘‘real-world’’
analogue to the proposal.
The available information indicates
that many schools have successfully
introduced competitive food reforms
with little or no loss of revenue. In some
of those schools, losses from reduced
sales of competitive foods were fully
offset by increases in reimbursable meal
revenue. In other schools, students
responded favorably to the healthier
options, and competitive food revenue
increased or remained at previous
levels.
But not all schools that adopted or
piloted competitive food standards fared
as well. Some of the same studies and
reports that highlight school success
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stories note that other schools sustained
losses after implementing similar
standards. The competitive food
revenue lost by those schools was not
offset (at least not fully) by revenue
gains from the reimbursable meal
programs.
We present a series of possible school
revenue effects in this analysis that
reflect the variation in outcomes across
these case studies, differences in the
adopted nutrition standards and
implementation strategies, and
differences in the schools’ economic
circumstances. This discussion
illustrates a range of potential outcomes;
the limited nature of available data and
the substantial variation in school
experiences to date prevent any
assessment of the most likely outcome.
The analysis included in the proposed
rule examines the possible effects of the
proposed rule on school revenues from
competitive foods, the administrative
costs of complying with the rule and the
benefits to school children.1 The
magnitude of these effects is subject to
considerable uncertainty; the ultimate
impact of the rule will be determined by
the manner in which schools implement
the new standards and how students
respond.
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Background
This rule sets forth proposed
provisions to implement sections 203
and 208 of Public Law 111–296, the
Healthy, Hunger-Free Kids Act of 2010
(HHFKA), which set conditions on
schools that participate in programs
authorized under NSLA and the CNA.
The largest of these programs are the
National School Lunch Program (NSLP)
and the School Breakfast Program (SBP).
NSLP is available to over 50 million
children each school day; an average of
31.8 million children per day received
a reimbursable lunch in Fiscal Year (FY)
2011. In that same FY, SBP served an
average of 12.1 million children daily.
Schools that participate in the NSLP
and SBP receive Federal reimbursement
and USDA Foods (donated
commodities) for lunches that meet
program requirements. The level of
Federal support provided varies by the
household income of the participating
child, with the highest reimbursements
1 For simplicity and because the consumption of
competitive foods at breakfast is relatively low
compared to the consumption of competitive foods
at lunch, we model the shift from competitive foods
to program meals as one that takes place at
lunchtime only. SNDA–III found that competitive
foods were consumed by 29 percent of NSLP nonparticipants during the lunch period in SY 2004–
2005 (Gordon, et al., 2007, vol. 2, table VI.9, p. 196),
but that competitive foods were consumed by just
5 percent of SBP non-participants during the
breakfast period (vol. 2, table VII.9, p. 264).
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to schools for meals provided free to the
children eligible for such meals.
Availability of Water During the Meal
Service
Section 203 of the HHFKA amends
section 9(a) of the NSLA (42 U.S.C.
(1758(a)) by requiring that schools
participating in the NSLP make potable
water available to children at no charge
in the place where lunches are served
during the meal service. This is a
nondiscretionary requirement of the
HHFKA that became effective October 1,
2010.
There are a variety of ways that
schools can choose to implement this
requirement. For example, schools can
offer water pitchers and cups on lunch
tables, a water fountain, or a faucet that
allows students to fill their own bottles
or cups with drinking water. Whatever
method is chosen, the water must be
available without restriction in the
location where meals are served.
While potable water is required to be
made available to students, it is not
considered part of the reimbursable
meal, and students are not required to
take water. There is no separate funding
available for this provision and
reimbursement may not be claimed.
However, reasonable costs associated
with providing potable water would be
an allowable cost to the non-profit
school food service account. Please note
that this proposed rule would also apply
to afterschool snack service claimed
through the NSLP. In addition, while
the statute does not specifically require
that potable water be served in the
School Breakfast Program, the
availability of water during all meal
services is encouraged.
The Department recognizes that some
food service areas and/or procedures
may require significant changes to
properly implement this provision, and
guidance has been provided to State
agencies to use with schools. The
Department issued an implementation
memorandum entitled ‘‘Child Nutrition
Reauthorization 2010: Water
Availability During National School
Lunch Program Meal Service,’’ SP 28–
2011, on April 14, 2011, and
participated in the Food Research and
Action Center’s webinar, ‘‘Strategies for
Success: Making the Most of the New
School Water and Milk Requirements,’’
on May 24, 2011. On July 12, 2011, SP
28–2011 was revised to provide more
detailed guidance in the form of a series
of questions and answers regarding the
implementation of the water
requirement. This memorandum is
available on the FNS Web site at
http://www.fns.usda.gov/cnd/
governance/policy.htm.
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State agencies and local school food
authorities are reminded that schools
were required to comply with this
provision not later than the beginning of
School Year 2011–12. This
nondiscretionary requirement is
included in this proposed rule as an
amendment to § 210.10(a)(1).
Nutrition Standards for Food Sold in
Schools in Competition With School
Meals
Federal child nutrition programs play
a critical role in providing nutritious,
balanced meals to children and
promoting healthy lifestyles. Major
strides have been made in recent years
to improve the quality of meals served
to children through Federal child
nutrition programs. Despite this
significant progress, however,
considerable work remains to be done to
improve children’s diets. Available
research has consistently shown that the
diets of children in the U.S. do not meet
current national dietary
recommendations for nutrition and
health. Overall, children today have
diets that are low in fruits, vegetables,
whole grains, and dairy foods and high
in sodium, fat and added sugars. The
2010 DGA recommend that Americans
increase their consumption of whole
grains, but according to the U.S.
Department of Health and Human
Services (DHHS) report, Healthy People
2010, only 7 percent of children ages 2
to 19 years currently meet this
recommendation.
The link between poor diets and
health problems such as childhood
obesity are a matter of particular policy
concern given their significant social
and economic costs. Obesity, in
addition to nutrition and physical
activity, has become a major public
health concern in the U.S.2 According to
data from the National Health and
Nutrition Examination Survey 2007–
2008, 34 percent of the U.S. adult
population is obese and an additional
34 percent are overweight (Ogden and
Carroll, 2010). The trend towards
obesity is also evident among children;
33 percent of U.S. children and
adolescents are now considered
overweight or obese (Beydoun and
Wang, 2011), with current childhood
obesity rates four times higher in
children ages 6 to 11 than they were in
the early 1960s (19 vs. 4 percent), and
three times higher (17 vs. 5 percent) for
adolescents ages 12 to 19 (IOM, 2007b,
p. 24). These increases are shared across
2 HealthyPeople.gov. ‘‘Nutrition, Physical
Activity, and Obesity. Available at http://
healthypeople.gov/2020/LHI/
nutrition.aspx?tab=data.
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all socio-economic classes, regions of
the country, and have affected all major
racial and ethnic groups (Olshansky, et
al., 2005).
Available health research 3 shows a
strong association between obesity and
other chronic diseases, including
cardiovascular disease, hypertension,
and diabetes. Cardiovascular disease is
the leading cause of death in America,
resulting in 500,000 annual deaths. Risk
factors for cardiovascular disease occur
with much greater frequency among
obese children than they do among
normal weight children. One quarter of
children ages 5 to 10 show early
warning signs for heart disease, such as
elevated blood pressure or high
cholesterol.
This and other evidence indicates a
need to improve the diets of children.
Since a significant portion of calories
consumed by children takes place at
school, improving the nutritional profile
of all foods sold in school beyond
Federally-reimbursable meals is critical
to improve the diets and overall health
of American children more generally,
and to ensure that more children from
all income levels adopt the kind of
healthful eating habits and lifestyles
that will enable them to live healthier,
more productive lives.
Section 208 of the HHFKA amended
Section 10 of the CNA providing the
Secretary new authority to establish
nutrition standards for all foods and
beverages sold outside of the Federal
child nutrition programs in schools.
Specifically, the HHFKA amended the
CNA to require that the Secretary
promulgate proposed regulations to
establish nutrition standards for foods
sold in schools other than those foods
provided under the CNA and the NSLA.
The provisions specify that the nutrition
standards shall apply to all foods sold
(a) outside the school meal programs; (b)
on the school campus; and (c) at any
time during the school day.
The provisions further stipulate that
such standards be consistent with the
most recent DGA and that the Secretary
consider authoritative scientific
recommendations for nutrition
standards; existing school nutrition
standards, including voluntary
standards for beverages and snack foods
and current State and local standards;
the practical application of the nutrition
standards; and special exemptions for
infrequent school-sponsored fundraisers
(other than fundraising through vending
3 See, for example, Preventing Childhood Obesity:
Health in the Balance by Jeffrey P. Koplan,
Catharyn T. Liverman, and Vivica A. Kraak
(Editors), Committee on Prevention of Obesity in
Children and Youth, Washington, DC: The National
Academies Press, 2005.
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machines, school stores, snack bars, a la
carte sales and any other exclusions
determined by the Secretary).
Prior to enactment of the HHFKA, the
Secretary’s authority to regulate the
types of foods sold in schools was
limited to meal pattern requirements for
meals served under NSLP and SBP and
other foods sold in the food service
areas during meal periods. Restrictions
on the sale of foods of minimal
nutritional value (FMNV) in food
service areas during meal periods are
found at 7 CFR 210.11 and 220.12 and
Appendix B to parts 210 and 220. The
term ‘‘food service areas’’ means any
place where school meals are being
served or consumed, including
classrooms and multipurpose rooms
that double as cafeterias during meal
periods. The Secretary did not have
authority to establish regulatory
requirements for foods sold in other
areas of the school campus or at other
times during the school day.
While meals provided through the
Federal school meal programs must
meet certain nutritional requirements,
schools may also provide foods and
beverages outside of these programs,
such as a la carte items in the school
cafeteria as well as those sold through
vending machines, school stores, school
fundraisers, and snack bars. These foods
are commonly referred to as
‘‘competitive foods’’ because they are
sold in competition with foods offered
in school meal programs. The
requirement that local educational
agencies have local school wellness
policies, pursuant to Section 9A of the
NSLA, 42 USC 1786b, was initially
established in the Child Nutrition and
WIC Reauthorization of 2004, P.L. 108–
265, and further strengthened by section
204 of the HHFKA. As part of local
wellness policies, schools are
encouraged to establish their own
standards for competitive foods. In
many cases, school food authorities
have been very successful in increasing
the number of healthy offerings in the
area of competitive food sales and
developing standards for the sale of
such foods and beverages in schools;
however, implementation of such
policies has been varied. Likewise,
voluntary certification initiatives, such
as USDA’s HealthierUS School
Challenge (HUSSC) and the Healthy
Schools program of the Alliance for a
Healthier Generation, set criteria for
competitive foods and beverages when
schools offer them, but not all schools
participate.
The goal of both the changes to the
nutrition requirements for NSLP and
SBP meals required by the HHFKA and
contained in the final rule, Nutrition
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Standards in the National School Lunch
and School Breakfast Programs, (77 FR
4088, January 26, 2012), and the
standards for competitive foods outlined
in this proposed rule is to improve the
health and well being of the Nation’s
children, increase consumption of
healthful foods during the school day
and to create an environment that
reinforces the development of healthy
eating habits.
This proposed rule includes standards
for both foods and beverages sold in
schools outside of the Federal child
nutrition programs, in accordance with
the intent of the HHFKA. Specifically,
the HHFKA clearly directs the Secretary
to consider authoritative scientific
recommendations (which include those
for both food and beverages) as well as
existing State, local and other voluntary
standards for beverages and snack foods.
All such standards include beverage
standards. In addition, the Secretary’s
authority to set standards with regard to
reimbursable meals has historically
included beverages, so it is reasonable
to believe that in extending this
authority to other foods sold in schools,
Congress intended to include beverage
standards.
Alternative approaches to several of
the proposed provisions are described
in the preamble of this rulemaking and
presented in the proposed regulatory
language, in order to solicit public
comment on their merits. Please note
that the order in which these
alternatives are presented is not
intended to indicate a preferred
approach.
Considerations
As previously indicated, the nutrition
standards established by the Secretary
must be consistent with the most recent
DGA, which, for the purposes of
developing this proposed rule, are the
2010 Dietary Guidelines for Americans
released on January 31, 2011. The
guidelines are available at http://
www.cnpp.usda.gov/
DietaryGuidelines.htm. In developing
the competitive food standards, the
Secretary is also directed by the HHFKA
to consider authoritative scientific
recommendations for nutrition
standards; existing school nutrition
standards, including voluntary
standards for beverages and snack foods
and State and local standards; and the
practical application of the nutrition
standards. As part of USDA’s review of
authoritative scientific
recommendations for nutrition
standards, the Agency gave
consideration to the National
Academies’ Institute of Medicine’s
(IOM) 2007 report entitled Nutrition
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Standards for Foods in Schools: Leading
the Way Toward Healthier Youth
(available at: http://www.cdc.gov/
HealthyYouth/nutrition/standards.htm).
In addition, the Department
conducted a broad review of nutrition
standards developed by other entities.
These included USDA’s HUSSC
standards, existing State and local
school nutrition standards for foods and
beverages sold in competition with
school meals, and existing voluntary
standards and recommendations that
have been developed by various
organizations such as the National
Alliance for Nutrition and Activity and
the Alliance for a Healthier Generation.
The Department also solicited input
from Federal child nutrition program
stakeholders, including nutrition and
health professionals, academia,
industry, interest groups and the public
through a variety of channels. Input
gathered from these various sources has
served to assist the Department in
formulating the standards and options
proposed in this rule. The practical
application of the competitive food
nutrition standards in school settings
was a key consideration for all of the
proposed standards. Additionally, over
4,400 schools to date have been
recognized through the HUSSC
initiative and have adopted strong
competitive foods policies as part of
their application for recognition. The
HUSSC criteria for competitive food
policies is based on IOM
recommendations that promote offering
competitive food items that are limited
in calories and low in total fat, trans fat,
saturated fat, sugar, sodium, and that
also limit the types and portion sizes of
beverages that can be sold in
competition with the reimbursable
meal.
This proposed rule is predicated on
the principle that the present and future
health and well-being of school-age
children is profoundly affected by
dietary intake and the maintenance of a
healthy weight. Schools contribute to
current and lifelong health and dietary
patterns and are uniquely positioned to
model and reinforce healthful eating
behaviors in partnership with parents,
teachers, and the broader community.
The practice of food sales in
competition with federally-reimbursable
program meals and snacks is
widespread. In school year (SY) 2004–
2005, 82 percent of all schools—and 92
percent of middle and high schools—
offered a la carte foods at lunch.
Vending machines were available in 52
percent of all schools and 26 percent of
elementary schools, 87 percent of
middle schools and 98 percent of high
schools (Gordon, et al., 2007; SNDA–III,
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Volume 1, pp 102–114). Because all
foods and beverages available on the
school campus represent significant
opportunity for the intake of calories
and foods and nutrients encouraged by
the DGA, competitive food standards
should be designed to meet such
nutrition recommendations.
Nutrition standards for all foods and
beverages sold in schools should be
considered in the context of new meal
patterns for the Federal school meal
programs and the goals of improving the
nutrition environment of our Nation’s
schools. The intent of this proposal is to
support the federally-reimbursed school
nutrition programs as the major source
of foods and beverages offered at school
and to ensure that all foods and
beverages sold on the school campus
during the school day will contribute to
an overall healthful eating environment.
These proposed standards do not
exclude any of the USDA NSLP/SBP
Meal Pattern food components or the
DGA subgroups as long as the product
meets the general standards proposed
for allowable competitive foods. It is
intended that these standards for
competitive foods be simple in order to
encourage the inclusion of the ‘‘Foods
and Nutrients to Increase’’ identified in
the 2010 DGA, and that the standards be
practical for application at the school or
district level.
The proposed standards and the
proposed exceptions to the standards
include numerous areas of consensus
and/or consistency among the various
source recommendations that were
reviewed. In addition, there are a
number of areas where existing
recommendations and/or voluntary or
State/local standards vary considerably
in their specific approach to issues. We
carefully considered each of these. As a
result, where appropriate in these areas,
the Department has proposed two or
more options for implementing
standards and is interested in receiving
comments on which of these options
best achieves the objectives of the DGA
while considering the practical
application of standards in a school
setting.
Definitions
The HHFKA stipulates that the
nutrition standards for competitive food
shall apply to all foods and beverages
sold: (a) Outside the school meals
programs; (b) on the school campus; and
(c) at any time during the school day.
Therefore, for the purpose of
implementing section 208 of the
HHFKA, this rule includes proposed
definitions for ‘‘competitive food’’,
‘‘school campus’’ and ‘‘school day’’.
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There are many definitions of ‘‘school
day’’ currently utilized by schools
across the country. In almost every
instance, such definitions apply to the
instructional day, rather than to the
availability of food or meal services in
schools during the school day. The
definitions proposed in this rule deal
exclusively with the application of the
proposed competitive food standards
and are intended to have no impact
whatsoever on any definition of
instructional day or school campus that
is established by a State or a local
educational agency or school for other
purposes. Competitive food is proposed
to be defined as all food and beverages
sold to students on the School campus
during the School day, other than those
meals reimbursable under programs
authorized by the NSLA and the CNA.
School day is proposed to be defined,
for the purpose of competitive food
standards implementation, as the period
from the midnight before, to 30 minutes
after the end of the official school day.
Finally, School campus is proposed to
be defined, for the purpose of
competitive food standards
implementation, as all areas of the
property under the jurisdiction of the
school that are accessible to students
during the school day.
The intent of the proposed definitions
of school day and school campus is to
provide simple and straightforward
criteria to ensure that food that does not
meet the standards outlined in this
proposed rule is not sold to students on
the school campus during the school
day. Given the many activities,
programs and schedules established by
schools, it is not possible to specify in
regulations a precise time for the start of
the school day; therefore, this rule
proposes that the sale of competitive
food to students be prohibited from the
midnight before, to 30 minutes after the
end of the official school day (i.e.,
instructional day). Competitive food,
school day, and school campus are
defined in § 210.11(a).
In addition, § 210.11(b)(4) of this rule
proposes that these nutrition standards
for competitive foods apply to any
program operating in the school on the
school campus during the school day
that is serving meals reimbursed under
any program authorized under the
NSLA or the CNA. Foods that do not
meet the nutrition standards outlined in
this proposal should not be available for
sale to students on the school campus
during the school day.
Nutrition Standards for Foods and
Beverages
The standards proposed in this rule
represent minimum standards that local
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educational agencies, school food
authorities and schools must meet. State
agencies and/or local schools have the
discretion to establish their own
competitive food standards should they
wish to do so, as long as such standards
are consistent with the final minimum
standards. This option is included in
§ 210.11(b)(1) of the proposed rule.
Competitive food standards apply to all
age groups of students. Additionally, the
proposed rule includes separate
standards for foods and beverages.
General Nutrition Standards for
Competitive Foods
The IOM in their report entitled
Nutrition Standards for Foods in
Schools: Leading the Way Toward
Healthier Youth categorized food and
beverages into two tiers, based on the
extent of their consistency with the
DGA. Tier 2 foods are not relevant to
this proposal since such foods are those
recommended to only be served to high
school students after the school day.
Tier 1 foods and beverages are
consistent with ‘‘foods to be
encouraged’’ as defined in the DGA and
are the basis for many of the provisions
of this proposed rule. IOM Tier 1 foods
are defined as fruit, 100% fruit and
vegetable juices, vegetables, whole
grains and related combination
products, and nonfat and low-fat dairy
products and NSLP food items that are
part of the reimbursable meal that are
also sold a la carte that meet fat and
sugar limits outlined in the IOM report.
This proposed rule is generally
consistent with the IOM standards and
the DGA in that it permits the sale of
Tier 1 foods as well as additional foods
containing a significant amount of one
of the four nutrients of public health
concern, and/or fruits/vegetables.
To be an allowable competitive food
in schools, an item shall:
(1) Meet all of the proposed
competitive food nutrient standards;
and
9535
(2) Be a grain product that contains 50
percent or more whole grains by weight
or have whole grains as the first
ingredient or be one of the non-grain
main food groups as defined by the 2010
DGA: a fruit, vegetable, dairy product,
protein food (meat, beans, poultry,
seafood, eggs, nuts, seeds, etc.); or
(3) Contain 10 percent of the Daily
Value (DV) of a naturally occurring
nutrient of public health concern from
the DGA (e.g., calcium, potassium,
vitamin D or dietary fiber); or
(4) Be a combination food that
contains at least 1⁄4 cup of fruit or
vegetable.
This proposal stipulates that, in cases
in which water is the first ingredient
listed for a food item, the second
ingredient must be one of the above.
Below is a brief summary chart
depicting the proposed standards
contained in this rule. A thorough
discussion of each standard follows.
PROPOSED COMPETITIVE FOODS STANDARDS
Food/nutrient
General Standard for Competitive Food.
NSLP/SBP Entrees and Side
Dishes Sold A la Carte.
Grain Items ..........................
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Total Fats .............................
Saturated Fats .....................
Trans Fats ............................
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Standard
Exemptions to the standard
To be allowable, a competitive FOOD item must:
(1) meet all of the proposed competitive food nutrient standards; and
(2) be a grain product that contains 50% or more
whole grains by weight or have whole grains as
the first ingredient or be one of the non-grain
main food groups: a fruit, vegetable, dairy product, protein food (meat, beans, poultry, seafood,
eggs, nuts, seeds, etc.), or
(3) contain 10% of the Daily Value (DV) of a naturally occurring nutrient of public health concern
(i.e., calcium, potassium, vitamin D or dietary
fiber) or;
(4) be a combination food that contains at least 1⁄4
cup of fruit or vegetable.
If water is the first ingredient, the second ingredient
must be one of the above.
Alternative A1: NSLP/SBP entrees and side dishes sold
a la carte exempt from all standards except the fat
and sugar standards (≤ 35% of total calories from fat
or ≤ 35% of calories or weight from total sugar (See
Alternative C1 and C2)) ; or
Alternative A2: NSLP/SBP entrees and side dishes (except grain based dessert products) sold a la carte exempt from all standards. Alternatives B1 and B2 describe two approaches to the timing of service associated with this exemption.
Acceptable grain products must include 50% or more
whole grains by weight or have whole grains as the
first ingredient.
Dietary fat per portion as packaged: ≤ 35% of total calories from fat per portion as packaged.
• Fresh, frozen and canned fruits and vegetables with
no added ingredients except water or, in the case of
fruit, packed in 100% juice or extra light syrup, exempt from all proposed nutrient standards.
• < 10% of total calories per portion as packaged .........
• Zero grams of trans fat per portion as packaged
(≤ 0.5 g per portion).
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• Reduced fat cheese;
• Nuts and seeds and nut/seed butters. Exemption
does not extend to combination products that contain
nuts, nut butters or seeds or seed butters with other
ingredients such as peanut butter and crackers, trail
mix, chocolate covered peanuts, etc.;
• Products consisting of only dried fruit with nuts and/
or seeds with no added nutritive sweeteners or fat;
• Seafood with no added fat.
• Reduced fat cheese
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PROPOSED COMPETITIVE FOODS STANDARDS—Continued
Food/nutrient
Standard
Sodium .................................
• Snack and side items: ≤ 200 mg sodium per portion
as packaged for non NSLP/SBP snack items;
´
• Entree items: ≤ 480 mg sodium per portion for non´
NSLP/SBP entree items.
• Alternative C1: ≤ 35% of calories from total sugars in
foods; or
• Alternative C2: ≤ 35% of weight from total sugars in
foods.
Total Sugars .........................
Calories ................................
Accompaniments ..................
Caffeine ................................
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Beverages ............................
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Exemptions to the standard
• ≤ 200 calories per portion as packaged including any
added accompaniments such as butter, cream
cheese, salad dressing etc. for non NSLP/SBP snack
items and side dishes sold a la carte;.
´
• ≤ 350 calories for non NSLP/SBP entree items sold a
la carte.
• Use of accompaniments should be limited when food
is sold to students in school. All accompaniments
shall be pre-portioned and must be included in the
nutrient profile as a part of the item served and meet
all proposed standards;
Elementary and Middle School
Foods and beverages must be caffeine-free, with the
exception of trace amounts of naturally-occurring caffeine substances. No caffeine restriction for high
school students.
Elementary School.
• No caffeinated beverages;
• Plain water (no size limit);
• Low fat milk, plain (≤ 8 oz);
• Non fat milk, plain or flavored (≤ 8 oz), including nutritionally equivalent milk alternatives as permitted by
the school meal requirements; and
• 100% fruit/vegetable juice (≤ 8 oz).
Middle School.
• No caffeinated beverages;
• Plain water (no size limit);
• Low fat milk, plain (≤ 12 oz);
• Non fat milk, plain or flavored (≤ 12 oz) including nutritionally equivalent milk alternatives as permitted by
the school meal requirements; and
• 100% fruit/vegetable juice (≤ 12 oz).
High School.
• Plain water (no size limit);
• Low fat milk/plain (≤ 12 fl. oz.);
• Non fat milk, plain or flavored (≤ 12 fl. oz.), including
nutritionally equivalent milk alternatives as permitted
by the school meal requirements;
• 100% fruit/vegetable juice (≤ 12 fl. oz.);
• Calorie-free, flavored and/or unflavored, caffeinated
or non-caffeinated carbonated water allowed (≤ 20fl.
oz), but not during the meal service periods;
• Other calorie free caffeinated or non-caffeinated beverages that comply with the FDA standard of less
than 5 kcals/serving. (≤ 20 fl. oz.), allowed, but not
during the meal service periods; and
• Alternative D1: Other caffeinated or non-caffeinated
beverages (≤ 40 calories/8 oz serving or ≤ 60 calories/12 oz serving) in ≤ 12 oz servings allowed, but
not during the meal service periods; or.
• Alternative D2: Other caffeinated or non-caffeinated
beverages (≤ 50 calories/8 oz or ≤ 75 calories/12 oz
serving) in ≤ 12 oz servings, but not during the meal
service periods.
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• Fresh, frozen and canned fruits/vegetables with no
added sweeteners except for fruits packed in 100%
juice or extra light syrup;
• Dried whole fruits/vegetables, dried whole fruit/vegetable pieces; and dried dehydrated fruits/vegetables
with no added nutritive sweeteners.
• Lowfat/nonfat yogurt with less than 30 grams of
sugar per 8 ounces.
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The following discussion outlines the
nutrition standards for allowable
competitive foods as proposed in this
rule at § 210.11.
General Exemption of NSLP and SBP
Entrees and Side Dishes
This rule proposes two alternatives by
which any menu item (both entrees and
side dishes) provided as part of the
NSLP and/or SBP school meal would be
exempt from all or some of the proposed
competitive food nutrition standards,
with the exception of grain based
dessert products which must meet all
standards in order to be served.
The first alternative (A1) would align
such an exemption with the IOM
recommendations related to NSLP and
SBP menu items. If items are served in
the reimbursable meal, they would be
exempt from all of the proposed
nutrition standards except they would
still have to meet the limits on fat and
sugar. As discussed later in this
preamble, the proposed limit for fat is
≤35% of total calories from fat per
portion as packaged. For sugar, two
alternatives are proposed: Alternative
C1: ≤35% of calories from total sugars
in foods; or Alternative C2: ≤ 35% of
weight from total sugars in foods. The
purpose of including this alternative for
meals is to ensure that the
improvements that will result from the
updated nutrition standards would not
be undermined.
The second alternative (A2) would
exempt all menu items provided as part
of the NSLP or SBP reimbursable meal
from the proposed competitive food
standards, with the exception of grain
based dessert products which must meet
all standards in order to be served. For
this alternative, the rule also proposes
two alternatives for comment with
regard to the frequency of allowable sale
of the NSLP/SBP menu items as
competitive foods which are described
as Alternatives (B1) and (B2) below.
These NSLP/SBP menu items would
have to be served in the same or smaller
portion sizes as in the NSLP or SBP to
be allowable. In general, the proposed
exemption for NSLP/SBP menu items
supports the new school meal patterns
and the concept of school meals as
being healthful.
The first alternative proposed
regarding the frequency of allowable
service of the exempted NSLP/SBP
menu items (B1) would allow an
exemption to the proposed nutrient
standards for competitive foods for
NSLP and SBP menu items on the same
day that the items were served in the
school meals program. While this may
limit flexibility for the school food
service and prevent the service of some
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leftover entrees and/or side dishes
during the menu cycle, this option
would alleviate concerns regarding the
frequency with which particular food
items are available.
The second alternative (B2) would
allow an exemption to the proposed
nutrient standards for competitive foods
for NSLP and SBP menu items served
within four operating days of service in
the programs. This option provides an
increase in flexibility for the school food
service.
The Department seeks comments on
these alternatives, identified at
Alternatives B1and B2 in § 210.11(c)(3)
of the proposed rule.
Naturally Occurring Nutrients
One of the general standards proposed
in this rule is that, in order to be
allowable, food items must contain 10%
of the Daily Value (DV) of a naturally
occurring nutrient of public health
concern: calcium, potassium, vitamin D,
and dietary fiber. Including the 10% DV
as a method to determine the foods that
may be sold in schools encourages
consumption of these nutrients.
The Department is interested in
receiving comments from the public as
to whether or not food items that
contain only naturally occurring
nutrients should be allowed in this rule,
or whether food items to which specific
nutrients of concern have been added
should also be allowable.
For example, if only naturally
occurring nutrients were specified, a
product may be formulated to have 10%
calcium by including ingredient(s) in
the product formulation that are
naturally high in calcium such as nonfat dry milk solids, or cheese.
Obviously, the ingredient(s) used and
the amount needed would vary
depending on the product and may not
be feasible for some products, but the
nutrients from these ingredients would
be included in meeting the 10% DV
level. Using this method would not
allow the addition of the discrete
nutrient (many forms exist for the
addition of calcium to food, such as
tricalcium phosphate, calcium citrate
malate, calcium lactate, etc.) to count
toward meeting the 10% DV
requirement. The rationale to limit the
products to the naturally occurring
nutrients is to limit the consumption of
products to which specific nutrients of
concern have been added and encourage
consumption of whole foods or foods
closer to their whole state as encouraged
by the DGA. One concern with this
approach is that schools may not be able
to recognize when a specific nutrient of
concern has been added to a product or
when the nutrient is naturally
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occurring. Fortifications are often not
highlighted on the label and the nutrient
facts panel does not currently make any
distinction between naturally occurring
nutrients and those nutrients available
in a food through fortification. This
requirement may be found in
§ 210.11(c)(2)(iv) of the proposal.
Combination Foods
Since many of the foods available to
students contain a combination of
ingredients, for the purposes of this
proposal, combination foods are defined
as products that contain two or more
components that represent two or more
of the recommended food groups as
specified in the DGA (fruit, vegetable,
dairy, protein or grains). This proposed
definition may be found at
§ 210.11(a)(4).
Fruits and Vegetables
To be consistent with both the DGA
and the IOM recommendations, this rule
proposes that fresh, frozen and canned
fruits and vegetables with no added
ingredients except water or, in the case
of fruit, packed in 100 percent juice or
extra light syrup, be exempt from all the
nutrient standards included in this rule.
According to the DGA, fruits and
vegetables are nutrient dense; greater
consumption of such foods in the diet
is encouraged. This provision is
included at § 210.11(d) of this proposed
rule.
Grain Items
This rule proposes that acceptable
grain products must include whole
grains. To qualify as an allowable
competitive food, grain products shall
meet at least one the following criteria
as well as meet all of the proposed
nutrient standards:
(1) Contain 50% or more whole grains
by weight; or
(2) Have whole grains as the first
ingredient.
This standard is consistent with the
DGA recommendations, the NSLP meal
pattern standards and the HUSSC whole
grain requirement. It is also practical
because it can be easily identified by
reading a product label. This provision
is included at § 210.11(e).
Total Fats
To qualify as an allowable
competitive food, this proposal specifies
that not more than 35 percent of the
total calories per portion as packaged
shall be derived from fat. Nuts and
seeds, peanut and other nut butters,
seafood, and reduced fat cheese would
be exempt from this standard. This
standard is identical to the IOM
recommendation for total fats. However,
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the Department is proposing to allow
the following exemptions to the total fat
limitation. Please note that requirements
and exemptions other than total fat
mentioned below are discussed later in
this preamble under the applicable
section.
(1) Reduced fat cheese is exempt from
the total fat and saturated fat standard,
but subject to the trans fat, calorie, sugar
and sodium standards. The exemption
for reduced fat cheese is based primarily
on the availability of lower fat cheeses
that children find palatable and the
recognition that reduced fat cheese is a
source of calcium, a nutrient of concern,
and contributes to overall bone health.
In addition, this exemption is consistent
with voluntary standards that have been
reviewed during the course of
developing this proposal.
(2) Nuts and seeds and nut/seed
butters are exempt from the total fat
standard, but subject to the saturated fat,
trans fat, calorie, sugar, and sodium
standards. This exemption does not
extend to combination products that
contain nuts, nut butters or seeds or
seed butters with other ingredients such
as peanut butter and crackers, trail mix,
chocolate covered peanuts, etc. This
exemption from the total fat standard
allows the inclusion of nuts and seeds
within reasonable calorie amounts.
Without such an exemption, nuts and
seeds could not be sold alone without
being combined with some other
product like added sugars or refined
grain, which is not the intent of these
competitive food nutrition standards.
Nuts, seeds and nut/seed butters are
nutrient-dense, good sources of
monounsaturated and polyunsaturated
fatty acids, some of which are essential,
and are sources of many vitamins and
minerals, as well as dietary fiber. In
addition, ensuring the allowance of nuts
and seeds provides a shelf stable,
vegetarian-friendly protein source.
(3) Products that consist of only dried
fruit with nuts and/or seeds with no
added nutritive sweeteners or fat are
exempt from the total fat and sugar
standard; but are subject to the saturated
fat, trans fat, calorie and sodium
standards, for reasons similar to those
cited above. In addition, dried fruit has
the same nutritional benefits of fruits
and will assist in helping children meet
their daily fruit requirements.
(4) Seafood with no added fat is
exempt from the total fat requirement in
order to increase omega-3 fatty acids;
but still subject to the proposed sugar,
saturated fat, trans fat, calorie and
sodium standards.
In summary, reduced fat cheese, nuts,
seeds and nut/seed butters and dried
fruit are popular food items among
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school-aged children and can make a
positive contribution to overall health,
especially since these food items must
meet the other nutrient standards
proposed. These provisions may be
found at § 210.11(f).
Saturated Fats
To qualify as an allowable
competitive food, it is proposed that less
than 10% of the total calories per
portion of a food be derived from
saturated fats. Cheese is exempt from
the total fat and saturated fat standard
if it is reduced fat cheese, as discussed
above. However, such reduced fat
cheese products remain subject to the
proposed calorie, trans fat, sugar and
sodium standards outlined in this
rulemaking. This standard is also
consistent with the DGA and may be
found in § 210.11(g) of this proposed
rule.
Trans Fats
It is proposed that allowable
competitive foods contain zero grams
trans fat per portion as packaged (not
more than 0.5 g per portion). This
standard is identical to the IOM and
DGA recommendations and may be
found in § 210.11(h) of this proposed
rule.
Total Sugars
This proposed rule provides two
alternatives for comment regarding total
sugars in foods. Alternative C1 requires
that in order to be considered an
allowable competitive food item, no
more than 35% of calories shall be
derived from total sugars in foods. This
is identical to the recommendation
made by the IOM. Alternative C2
requires that allowable competitive food
items shall not contain more than 35%
of their weight from total sugars in
foods. This standard was included in a
number of voluntary standards that
were reviewed during the development
of this proposed rule. The calculations
associated with these two alternatives
differ. Generally, when sugar by weight
is utilized, foods with a higher
percentage of calories from total sugar
would be allowable as competitive
foods in schools. This may also result in
an increase in the number/types of
foods which may be sold in schools,
particularly with regard to dairy
products such as ice cream. The
Department requests comment on these
alternatives.
In addition, ideally, the sugar
standard would apply to the added
sugars in foods, since added sugars are
identified in the 2010 DGA as a food
component to reduce. However, because
the Nutrition Facts label does not
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differentiate between added and
naturally occurring sugars in foods and
beverages, a standard limiting total
sugars is the most reasonable standard.
Regardless of which measure (total
sugars by weight or calories) is utilized,
this proposed rule includes the
following exemptions to this
requirement:
(1) Dried whole fruits or vegetables;
dried whole fruit or vegetable pieces;
and dried dehydrated fruits or
vegetables with no added nutritive
sweeteners are exempt from the sugar
standard, but are subject to the calorie,
total fat, saturated fat, trans fat and
sodium standards;
(2) Products that consist of only dried
fruit with nuts and/or seeds with no
added nutritive sweeteners or fat are
exempt from the total fat and sugar
standard, but are subject to the calorie,
trans fat, saturated fat and sodium
standards; and
(3) Flavored and unflavored nonfat
and low-fat yogurt with no more than 30
grams of total sugars per 8 ounce serving
are exempt from the sugar standard, but
are subject to the calorie, total fat,
saturated fat, trans fat and sodium
standards.
The exemption from the total sugar
standard proposed in items (1) and (2)
above has been made since those food
items are nutrient dense and contribute
to total intake of fruit and vegetables,
which has been identified in the 2010
DGA as a food group targeted for
increased consumption. Since the water
has been removed from dried products
during processing, it is more calorically
dense than fresh fruits and vegetables.
For this reason, the calorie standards are
proposed to apply to dried fruits and
dried vegetables as well as dried fruits
mixed with nuts and/or seeds. We
acknowledge that for certain dried fruit
products, the addition of nutritive
sweeteners may be necessary for
processing and palatability (i.e.
cranberries). Therefore we are
requesting feedback from commenters
on whether the standard should include
specific dried fruit products that require
nutritive sweeteners in the total sugars
exemption.
The proposed sugar standards are
found in § 210.11(i).
Sodium
This rule proposes that allowable
´
entree items contain no more than 480
mg sodium per portion as served. This
standard is identical to the IOM
recommendation for entrees.
For purposes of this proposed rule, an
´
entree item is proposed to be defined in
§ 210.11(k) as an item that includes only
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the following three categories of main
dish food items:
(1) A combination food of meat or
meat alternate and whole grain-rich
bread (for example, turkey sandwich,
peanut butter on grain-rich bread, pizza
with whole grain-rich crust, hot dog or
hamburger on a grain-rich bun, a bean
and cheese burrito, nachos with chili
and cheese);
(2) A combination food of vegetable or
fruit and meat or meat alternate (for
example, chef’s salad, fruit and cheese
platter, chicken vegetable stir-fry); or
(3) A meat or meat alternate alone
(e.g., fish filet, Salisbury steak, seafood,
egg or chicken) with the exception of
yogurt, low-fat or reduced fat cheese,
nuts, seeds and nut or seed butters. This
exception is being proposed since
yogurt, cheese, nuts, seeds and nut or
seed butters alone are generally
considered to be snack or dessert items,
´
not entree items.
The Department is proposing that
allowable snack items contain no more
than 200 mg of sodium per portion as
packaged. This standard reflects the
IOM recommendation with regard to
snack items.
In addition, as previously discussed,
this rule proposes to exempt any items
sold as part of the school meal during
specified periods from all or most
(except total fat and sugar) competitive
food standards (§ 210.11(c)(3)). The
proposed sodium standards are found in
§ 210.11(j) and (k).
srobinson on DSK4SPTVN1PROD with PROPOSALS2
Calories
This rule proposes that, to be
considered allowable, snack items shall
contain no more than 200 calories per
portion as packaged including any
added accompaniments such as butter,
cream cheese, salad dressing etc. A la
carte snack items/side dishes served in
the same or smaller portion size as
served in the NSLP or the SBP during
specific periods would be exempt from
this calorie restriction.
This proposed rule stipulates that
´
entree items sold a la carte shall contain
no more than 350 calories per portion as
served and meet all of the other
nutrition standards specified.
However, consistent with the sodium
standard exemption, this rule proposes
´
to exempt entree items from this calorie
´
requirement if the entree items sold a la
carte are NSLP or SBP entrees that are
to be offered during specific periods as
part of the reimbursable school meal
and are served in the same or smaller
portion size as offered in the NSLP or
SBP (§ 210.11(c)(3)). The proposed
calorie standards are found in
§ 210.11(j) and (k).
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Caffeine
This rule proposes that competitive
foods and beverages served to
elementary and middle school-aged
children must be caffeine-free, with the
exception of trace amounts of naturally
occurring caffeine substances. This
standard is consistent with the IOM
recommendation. In the IOM report, it
was concluded that although there may
be some benefits associated with
caffeine consumption among adults,
offering foods and beverages containing
significant amounts of caffeine to school
aged children was not appropriate due
to the potential for adverse effects,
including physical dependency and
withdrawal. Caffeine is not proposed to
be restricted for high school-aged
students. Given the practical realities
and market for caffeinated beverages
enjoyed by high school aged students, it
was not deemed practical to restrict
caffeinated beverages for this age group.
However, the Department does request
comments on this exception for high
school students. This proposed
provision may be found at § 210.11(l).
Beverages
In developing proposed standards for
beverages sold in competition with
school meals, the Department is
proposing standards for allowable
beverage types that are consistent with
the IOM recommendations for
elementary and middle school students,
but which allow a greater variety of
beverages for sale to high school
students. Specifically, calorie-free,
flavored and/or carbonated water, and
low-calorie (less than 40 or 50 calories
per 8 ounces) beverages are allowed for
high school students, but not allowed
for elementary or middle school
students. This approach recognizes the
wide range of beverages available to
high school students in the broader
marketplace and the increased
independence such students have,
relative to younger students, in making
consumer choices. Given those
circumstances, the Department
considers it reasonable to provide high
school students a broader range of
choices, while still limiting those
choices to those which are more
nutrient dense and/or lower in calories
than other options. Elementary and
middle school students may develop
healthier habits because of this
limitation.
The proposed rule also specifies
allowable beverages and maximum
portion sizes for such beverages. The
proposed beverage standards provide
consistent sizes for each age group.
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The proposed beverage requirements
are:
Elementary School:
• Plain water (no size limit);
• Low fat milk, plain (not more than
8 fluid ounces);
• Non fat milk, plain or flavored (not
more than 8 fluid ounces);
• Nutritionally equivalent milk
alternatives as permitted by the school
meal requirements (not more than 8
fluid ounces); and
• 100% fruit/vegetable juice (not
more than 8 fluid ounces)
Middle School:
• Plain water (no size limit);
• Low fat milk, plain (not more than
12 fluid ounces);
• Non fat milk, plain or flavored (not
more than 12 fluid ounces);
• Nutritionally equivalent milk
alternatives as permitted by the school
meal requirements (not more than 12
fluid ounces); and
• 100% fruit/vegetable juice (not
more than 12 fluid ounces);
High School:
• Plain water (no size limit);
• Low fat milk, plain (not more than
12 fluid ounces);
• Non fat milk, plain or flavored (not
more than 12 fluid ounces);
• Nutritionally equivalent milk
alternatives as permitted by the school
meal standards (not more than 12 fluid
ounces);
• 100% fruit/vegetable juice (not
more than 12 fluid ounces);
• Calorie-free, flavored and/or
carbonated water (not more than 20
fluid ounces) allowed, but not in the
meal service area during meal service
periods;
• Other beverages (not more than 20
fluid ounces) that comply with the FDA
requirement for bearing a ‘‘calorie free’’
claim of less than 5 kcals/serving
allowed, but not in the meal service area
during meal service periods; and
• Other beverages in ≤ 12 oz servings
allowed, but not in the meal service area
during the meal service periods. Two
alternatives are proposed. The first (D1)
would allow 40 calories per 8 ounce
serving of beverages (or no more than 60
calories per 12 ounce serving of such
beverages) for high school students. The
second (D2) would allow 50 calories per
8 ounce serving of beverages (or no
more than 75 calories per 12 ounce
serving of such beverages) for high
school students. The slightly higher
calorie limit would allow a broader
range sports drinks to be purchased.
The beverage standards proposed in
this rule are consistent with most
currently established voluntary
standards regarding the types of
beverages sold to students on campus
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srobinson on DSK4SPTVN1PROD with PROPOSALS2
during the school day. However, the
package/container sizes for 100% juice
and milk as proposed in this rule are
larger than those recommended by the
IOM in its report on nutrition standards
for food in schools (IOM did not
recommend allowing any amount of
other caloric beverages aside from juice
and milk). The amounts of 100% juice
and milk proposed for elementary and
middle schools are also higher than the
voluntary standards set by the Alliance
for a Healthier Generation.
The American Academy of Pediatrics
recommends limiting 100 percent juice
for children 7 to 18 years old to 8 to 12
ounces per day. Under the
interpretation of the new meal pattern
requirements there is no juice limit per
day but rather per week. The Dietary
Guidelines Advisory Committee Report
states that limited and inconsistent
evidence suggests that for most
children, intake of 100 percent fruit
juice is not associated with increased
fat, when consumed in amounts that are
appropriate for age and energy needs of
the child. The DGA 2010 recommends
that most of one’s fruit choices should
be whole or cut-up fruit, rather than
juice, for the benefits that dietary fiber
provides.
Most children 9 years and older
consume less than one cup of milk per
day. While allowing package sizes for
milk up to 12 ounces for secondary
school students does contribute extra
calories, it also provides children with
needed calcium, vitamin D and
potassium and could help move
children’s consumption of Dairy foods
closer to dietary recommendations.
As indicated previously, the rationale
behind the approach taken in this
proposed rule is the practical
recognition of current packaging
practices.
However, the Department realizes that
there would be an increase in calories
and added sugars incurred by allowing
larger package sizes and welcomes
public comments on the proposed
beverage amounts.
These proposed provisions are found
in § 210.11(b)(2) and § 210.11(m).
Fundraisers
School-sponsored fundraisers are
recognized as reasonable enhancements
to the school community as well as a
method of financing some important
school-sanctioned activities for
students. The sale of food items that
meet the proposed nutrition
requirements (as well as the sale of nonfood items) at fundraisers would not be
limited in any way under the proposed
rule. In addition, the proposed
standards would not apply to food sold
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during non-school hours, weekends and
off-campus fundraising events such as
concessions during after-school sporting
events. Further, the proposed standards
would not apply to food or beverages
sold on school grounds, during school
hours at ‘‘a limited number’’ of school
fundraisers. The determination of what
constitutes ‘‘a limited number’’ will be
decided by the state agencies under one
of two alternative approaches. It is
expected that state agencies will ensure
that the frequency of such fundraisers
on school grounds, during school hours
does not reach a level to impair the
effectiveness of nutrition requirements
described in this rule. With respect to
other non-exempted fundraising
activities during the school day
(including fundraising through vending
machines, school stores, snack bars, a la
carte sales, and other similar activities
as determined by the Secretary), the
food and beverage items sold must meet
the proposed nutrition standards for
competitive foods.
The Department is especially
interested in obtaining input from the
public on this particular provision. This
proposed rule includes two alternative
approaches to exemptions to the
competitive food standards for schoolsponsored fundraisers, as well as a
request for other suggestions from
commenters. In addition, since the
Department does not have detailed data
regarding fundraising activities at
schools, especially with regard to the
types, frequency, restrictions during
meal time, etc., that have been
established by schools, commenters may
also wish to provide input in this area.
The first alternative is to allow State
agencies the discretion to establish
limitations on the number of exempt
fundraisers that may be held during the
school year. The second alternative is to
allow State agencies to set exempt
fundraising frequency standards, subject
to USDA approval.
Suggested timeframes from
commenters for the conduct of exempt
fundraisers in schools are also welcome.
The two alternative approaches
discussed above are included in
§ 210.11(b)(5).
Regardless of the approach ultimately
adopted by the Department in a final
rule, it is important to note that
individual States and/or school districts
may implement more restrictive
competitive food standards, including
those related to the frequency with
which exempt fundraisers may be held
in schools.
As stated above, this rule does not
propose standards for frequency of
school-sponsored fundraisers that
provide foods or beverages that meet the
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nutrition standards for competitive
foods. The limitations in this rule would
deal only with those school-sponsored
fundraisers that are exempt from the
competitive food nutrition standards.
However, the proposal does prohibit the
sale of specially exempted fundraiser
foods and beverages during the school
meal service so as not to compete with
the school meal.
Other Proposed Standards
Accompaniments
To reduce the added sodium, fats and
sugars in food available and served to
students during the school day, it is
proposed that the use of
accompaniments be limited when food
is sold to students in school. All
accompaniments shall be pre-portioned
and must be included in the nutrient
profile as a part of the item served as
well as meet all of the proposed
standards. For example, dressings
served with salads, butter or jelly on
muffins, cream cheese with a bagel and
garnishes shall be pre-portioned in
amounts appropriate to ensure that the
competitive food standards are met and
shall be included in the nutrient profile
of the item. The Department seeks
comment on the impact that such a
requirement may have on competitive
food service in schools. This proposed
provision is found in § 210.11(n).
Foods of Minimal Nutritional Value
(FMNV)
This rule requires that all food and
beverages available and served to
students meet the specific standards for
competitive foods outlined in this
proposed rule. It is no longer necessary,
therefore, to retain the more narrowly
defined standards for food of minimal
nutritional value included in the current
regulations. Accordingly, the proposal
would remove the definition of ‘‘food of
minimal nutritional value’’ from 7 CFR
part 210 and the definition of ‘‘foods of
minimal nutritional value’’ from 7 CFR
part 220, and make other conforming
changes in both of these parts.
Summary of General Impacts of the
Proposed Competitive Food Standards
As proposed in this rule, all food and
beverage products are subject to each of
the proposed competitive food
standards, with some specific
exemptions for food items to be
encouraged. Many existing products,
particularly those encouraged by the
Dietary Guidelines, would be available
without restriction under these
standards. Many products that would
not meet these standards under current
product formulations and package sizes
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could meet the standards with changes
to product packaging size or product
formulation. In some cases, necessary
formulation changes would be relatively
modest (e.g., adding or increasing whole
grains in certain products), while in
others, more significant changes would
be required in order for a product to
meet the competitive food standards.
Some products may also be able to meet
the standards by modifying packaging;
for example, reducing existing singleserving packages to meet calorie or
sodium requirements. Finally, there are
some products, such as those in which
sugar is the primary ingredient, for
which it is unlikely that changes could
modify the product in a way that would
allow the product to comply with the
competitive food standards. Such
products include soft drinks that
contain sugar and/or caffeine (proposed
to be restricted for elementary and
middle school students), candy and
other confections, whole milk, jams,
jellies, certain dessert items as well as
certain fruit products that contain added
sugars.
Snack foods such as chips and other
bagged snack items would most likely
be most impacted by the proposed
sodium, calorie and fat standards, as
well as the requirement that the item
contain 50% or more whole grains, or
have its first ingredient be a whole grain
or other food to encourage as
recommended by the DGA. As currently
packaged, many baked tortilla chips,
reduced fat corn chips and baked potato
chips would meet the proposed
standards and would be allowed.
However, other snack products as
currently packaged and formulated,
such as regular corn chips, cheese puffs
and many flavored popcorn snack items
would not meet the standards.
Grain based dessert items such as
cookies, snack bars, pastries and cakes
would likely be most impacted by the
proposed grain, sugar, fat, and calorie
standards. As currently packaged, many
low-fat granola bars could be sold, while
many cereal bars, cookies, and snack
cakes currently contain too much sugar
to meet the proposed standards. A
number of other popular products, such
as certain sweet snack crackers, may be
able to meet the standards if such items
are reformulated to increase the amount
of whole grains they contain.
Fruit-based products with relatively
limited amounts of added sugar or other
products would be allowed. For
example, some frozen fruit treats have
water and fruit as their first ingredients
and are below the sugar limits.
However, many other fruit snacks and
fruit beverages that have added
ingredients would be limited by sugar
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and calorie limits. For example, nearly
half of the calories contained in most
gummy fruit snack and fruit roll-up type
products are derived from sugar.
Similarly, many frozen fruit popsicles or
sorbet products have water and sugar as
their first ingredients and, as such,
would not meet the proposed standards.
Dairy snack products are most
impacted by the proposed fat, sugar, and
sodium standards included in this rule.
Some frozen dairy products, puddings,
etc, as currently formulated would meet
the proposed standards, while others
would not. However, most low fat/
nonfat yogurt products will meet the
standards due to the total sugar
exemption proposed in this rule.
In addition, low fat cheeses are
proposed to be exempt from the fat
standards, and many lower-sodium
cheese products would qualify.
Beverages, other than milk, would be
limited by calorie and caffeine
standards. While regular soda would not
be allowed, diet sodas would be
permitted in high schools in 20 oz.
containers. Zero calorie versions of
sport drinks or fitness waters would also
be allowed in high schools in 20 oz.
portions, as would 12 oz. portions of
sports drinks or other beverages with 40
calories per 8 oz. (Alternative D1) or 50
calories per 8 oz (Alternative D2)In
evaluating the impacts of this proposed
rule, the Department has also
considered the impacts of these changes
on the vendors that supply food items,
including competitive food items, to
schools for sale outside of the Federal
school meal programs. The proposed
rule may require a number of SFA’s to
significantly change the food items that
are offered for sale on school grounds.
However, from the date of publication of
this proposed rule, SFA’s and their
vendors will have significant time to
prepare for this transition. Further,
while it is anticipated that this
regulation will eventually improve the
nutritional options offered to students,
the Department estimates overall direct
impact on the sales of food items in the
U.S. would be very limited. Currently,
the Department estimates that the sale of
competitive foods in schools may
represent less than one percent of all
food shipments from U.S. food
manufacturers. Notwithstanding this
initial analysis, the Department is
specifically seeking comments on
impacts of the proposed rule on the U.S.
food industry, including small
businesses, beyond what is discussed
above and on ways these impacts can be
minimized consistent with the purposes
of section 10 of the Child Nutrition Act
of 1966.
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Recordkeeping and Monitoring
Requirements
This rule proposes to impose
recordkeeping requirements on local
educational agencies regarding the
implementation of these proposed
nutrition standards in areas under their
jurisdiction that are outside of the
control of the school food service
operation. The competitive food
nutrition standards apply throughout
the school campus and apply to all food
available for sale to students outside of
the reimbursable school meals at any
venue available to students for the
purchase of food, such as school stores,
vending machines, concession stands,
fundraising events held on campus,
snack bars, etc. It is the responsibility of
school food authorities to ensure and
document that foods sold by the school
food service to students during the meal
service periods in meal service areas
meet the proposed competitive food
standards. However, since these
competitive food standards apply to
foods sold throughout all of the venues
available in the schools (other than
reimbursable meals), the responsibility
for demonstrating compliance with
these competitive food requirements
must also include the local educational
agency, as defined in § 210.2 of the
current NSLP regulations, as well. This
proposed rule provides that local
educational agencies shall require that,
at a minimum, receipts, nutrition labels
or product specifications be maintained
by those designated as responsible for
competitive food service at the various
venues in the schools in order to ensure
and document compliance with the
competitive food requirements for the
foods and beverages available to be sold
to students at these venues. FNS will
provide technical assistance and
guidance as necessary to State agencies
and local educational agencies in this
regard. This proposed provision may be
found at § 210.11(b)(3).
It is proposed that State agencies be
responsible for monitoring compliance
with the requirements of the
competitive food nutrition standards
through a review of local educational
agency records documenting
compliance with these requirements.
This requirement has been included in
§ 210.18(h)(7) as part of the general
areas of State agency administrative
review responsibilities. As with other
program violations, if a State agency
determines during an administrative
review that violations of the competitive
food standards have occurred, corrective
action plans would be required to be
submitted to the State agency by the
local educational agency and school
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food authority. FNS will consider any
further actions that may be associated
with continued noncompliance with
competitive food standards, among
other program violations, in a
forthcoming proposed rule
implementing Section 303 of the
HHFKA, Fines for Violating Program
Requirements.
Procedural Matters
Executive Order 12866 and Executive
Order 13563
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility.
This proposed rule has been
designated an ‘‘economically significant
regulatory action’’ under section 3(f) of
Executive Order 12866. Accordingly,
the rule has been reviewed by the Office
of Management and Budget.
205 of the UMRA generally requires the
Department to identify and consider a
reasonable number of regulatory
alternatives and adopt the least costly,
more cost-effective or least burdensome
alternative that achieves the objectives
of the rule. This rule does not contain
Federal mandates (under the regulatory
provisions of Title II of the UMRA) that
impose costs on State, local, or Tribal
governments or to the private sector of
$100 million or more in any one year.
This rule is, therefore, not subject to the
requirements of sections 202 and 205 of
the UMRA.
Executive Order 12372
The NSLP is listed in the Catalog of
Federal Domestic Assistance under No.
10.555. The SBP is listed in the Catalog
of Federal Domestic Assistance under
No. 10.553. For the reasons set forth in
the final rule in 7 CFR part 3015,
Subpart V and related notice (48 FR
29115, June 24, 1983), these programs
are included in the scope of Executive
Order 12372, which requires
intergovernmental consultation with
State and local officials.
Unfunded Mandates Reform Act
Executive Order 13132
Executive Order 13132 requires
Federal agencies to consider the impact
of their regulatory actions on State and
local governments. Where such actions
have federalism implications, agencies
are directed to provide a statement for
inclusion in the preamble to the
regulations describing the agency’s
considerations in terms of the three
categories called for under section
(6)(b)(2)(B) of Executive Order 13132.
USDA has considered the impact of this
rule on State and local governments and
has determined that this rule does not
have federalism implications. This rule
does not impose substantial or direct
compliance costs on State and local
governments. Therefore, under Section
6(b) of the Executive Order, a federalism
summary impact statement is not
required.
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA), Public
Law 104–4, establishes requirements for
Federal agencies to assess the effects of
their regulatory actions on State, local,
and Tribal governments and the private
sector. Under section 202 of the UMRA,
the Department generally must prepare
a written statement, including a cost/
benefit analysis, for proposed and final
rules with Federal mandates that may
result in expenditures to State, local, or
Tribal governments, in the aggregate, or
to the private sector, of $100 million or
more in any one year. When such a
statement is needed for a rule, section
Executive Order 12988
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. This rule is intended to have
preemptive effect with respect to any
State or local laws, regulations or
policies which conflict with its
provisions or which would otherwise
impede its full implementation. This
rule is not intended to have retroactive
effect unless specified in the DATES
section of the final rule. Prior to any
judicial challenge to the provisions of
this rule or the application of its
provisions, all applicable administrative
procedures must be exhausted.
Regulatory Flexibility Analysis
srobinson on DSK4SPTVN1PROD with PROPOSALS2
This rule has been reviewed with
regard to the requirements of the
Regulatory Flexibility Act of 1980 (5
U.S.C.601–612). It has been certified
that this rule will have a significant
economic impact on a substantial
number of small entities.
The requirements established by this
proposed rule will apply to school
districts, which meet the definitions of
‘‘small governmental jurisdiction’’ and
‘‘small entity’’ in the Regulatory
Flexibility Act. An Initial Regulatory
Flexibility Act analysis is included in
the preamble.
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Civil Rights Impact Analysis
FNS has reviewed this rule in
accordance with Departmental
Regulations 4300–4, ‘‘Civil Rights
Impact Analysis,’’ and 1512–1,
‘‘Regulatory Decision Making
Requirements.’’ After a careful review of
the rule’s intent and provisions, FNS
has determined that this rule is not
intended to limit or reduce in any way
the ability of protected classes of
individuals to receive benefits on the
basis of their race, color, national origin,
sex, age or disability nor is it intended
to have a differential impact on minority
owned or operated business
establishments and woman-owned or
operated business establishments that
participate in the Child Nutrition
Programs.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. Chap. 35; see 5 CFR 1320),
requires that the Office of Management
and Budget (OMB) approve all
collections of information by a Federal
agency from the public before they can
be implemented. Respondents are not
required to respond to any collection of
information unless it displays a current,
valid OMB control number. This
proposal would require a new
collection. The new provisions in this
rule which would increase burden
hours, affect the information collection
requirements that will be merged into
the National School Lunch Program,
OMB Control Number #0584–0006,
expiration date 5/31/2012. The current
collection burden inventory for the
National School Lunch Program is
12,181,012. These changes are
contingent upon OMB approval under
the Paperwork Reduction Act of 1995.
When the information collection
requirements have been approved, FNS
will publish a separate action in the
Federal Register announcing OMB’s
approval.
Comments on the information
collection in this proposed rule must be
received by April 9, 2013.
Send comments to the Office of
Information and Regulatory Affairs,
OMB, Attention: Desk Officer for FNS,
Washington, DC 20503. Please also send
a copy of your comments to Jon Garcia,
Program Analysis and Monitoring
Branch, Child Nutrition Division, 3101
Park Center Drive, Alexandria, VA
22302. For further information, or for
copies of the information collection
requirements, please contact Lynn
Rodgers-Kuperman at the address
indicated above. Comments are invited
on: (1) Whether the proposed collection
of information is necessary for the
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proper performance of the Agency’s
functions, including whether the
information will have practical utility;
(2) the accuracy of the Agency’s
estimate of the proposed information
collection burden, including the validity
of the methodology and assumptions
used; (3) ways to enhance the quality,
utility and clarity of the information to
be collected; and (4) ways to minimize
the burden of the collection of
information on those who are to
respond, including use of appropriate
automated, electronic, mechanical, or
other technological collection
techniques or other forms of information
technology.
All responses to this request for
comments will be summarized and
included in the request for OMB
approval. All comments will also
become a matter of public record.
Title: National School Lunch Program
and School Breakfast Program: Nutrition
Standards for All Foods Sold in School
as Required by the Healthy, Hunger-Free
Kids Act of 2010.
OMB Number: 0584–NEW
Expiration Date: Not Yet Determined
Type of Request: New Collection
Abstract: This rule sets forth proposed
provisions to implement sections 203
and 208 of Public Law 111–296, the
Healthy, Hunger-Free Kids Act of 2010
(HHFKA), enacted December 13, 2010.
Section 203 of the HHFKA amends
section 9(a) of the Richard B. Russell
National School Lunch Act by requiring
that schools participating in the NSLP
make potable water available to children
at no charge in the place where lunches
are served during the meal service. This
is a nondiscretionary requirement of the
HHFKA, effective October 1, 2010.
Section 208 of the HHFKA amends
Section 10 of the Child Nutrition Act of
1966 (42 U.S.C. 1779) to give the
Secretary of Agriculture new authority
to establish nutrition standards for all
foods and beverages sold outside of the
Federal school meal programs on the
campus of schools during the school
day. The CNA as amended by the
HHFKA requires that the Secretary
promulgate proposed regulations to
establish science-based nutrition
standards for foods sold in schools other
than those foods provided under the
CNA and NSLA.
Those participating in the SBP also
participate in the NSLP, thus the burden
associated with the SBP will be carried
in the NSLP. The average burden per
record and the annual burden hours for
recordkeeping are explained below and
summarized in the charts which follow.
In addition, provisions under sections
203 and 208 of the HHFKA do not
contain new reporting requirements.
Recordkeepers for this Proposed Rule:
State Agencies (SAs) (57) and School
Food Authorities (SFAs) (20,858) and
Schools (101,747)
Estimated Number of Recordkeepers
for this Proposed Rule: 122,662
Estimated Number of Records per
Recordkeeper for this Proposed Rule:
1.033457
Estimated Total Annual Records:
126,766
Estimated Average Burden Hours per
Record: 7.31217
Estimated Total Annual Burden
Hours on Recordkeepers for this
Proposed Rule: 926,935
ESTIMATED ANNUAL BURDEN FOR 0584—NEW, NUTRITION STANDARDS FOR ALL FOODS SOLD IN SCHOOL
[7 CFR 210]
Section
Estimated
number of
recordkeepers
Records per
recordkeeper
Average
annual
records
Average
burden per
record
Annual
burden
hours
Recordkeeping
SAs shall ensure that the LEA complies with the nutrition standards for
competitive foods and retains documentation demonstrating compliance.
LEAs and SFAs shall be responsible
for maintaining records documenting
compliance with the competitive food
standards.
Organizations responsible for competitive food service at various venues in
schools shall maintain records.
Total Recordkeeping for Proposed
Rule.
7 CFR
210.18(h)(7)
57
73
4,161
0.25
1,040
7 CFR
210.11(b)(3)
20,858
1
20,858
20
417,160
7 CFR
210.11(b)(3)
101,747
1
101,747
5
508,735
...........................
122,662
........................
126,766
7.3122
926,935
7 CFR 210.15 and 7 CFR 210.20
require that, to participate in the
National School Lunch Program, school
food authorities and State agencies must
maintain records to demonstrate
compliance with Program requirements.
7 CFR 210.23 further requires that State
agencies and school food authorities
maintain records for a period of 3 years.
srobinson on DSK4SPTVN1PROD with PROPOSALS2
SUMMARY OF BURDEN (OMB #0584–NEW)
Total No. Recordkeepers .................................................................................................................................................................
Average No. Records per Recordkeeper ........................................................................................................................................
Total Annual Records ......................................................................................................................................................................
Average Hours per Record ..............................................................................................................................................................
Total Burden Hours for Part 210 with Proposed Rule ....................................................................................................................
Current OMB Inventory for Part 210 ...............................................................................................................................................
Difference (New Burden Requested with Proposed Rule) ..............................................................................................................
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08FEP2
122,662
1.033457
126,766
7.31217
13,107,947
12,181,012
926,935
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E-Government Act Compliance
The Food and Nutrition Service is
committed to complying with the E–
Government Act of 2002, to promote the
use of the Internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services and for other purposes.
srobinson on DSK4SPTVN1PROD with PROPOSALS2
Executive Order 13175—Consultation
and Coordination With Indian Tribal
Governments
Executive Order 13175 requires
Federal agencies to consult and
coordinate with Tribes on a
government-to-government basis on
policies that have Tribal implications,
including regulations, legislative
comments or proposed legislation, and
other policy statements or actions that
have substantial direct effects on one or
more Indian Tribes, on the relationship
between the Federal Government and
Indian Tribes, or on the distribution of
power and responsibilities between the
federal government and Indian Tribes.
In Spring 2011, FNS offered
opportunities for consultation with
Tribal officials or their designees to
discuss the impact of the Healthy,
Hunger-Free Kids Act of 2010 on tribes
or Indian Tribal governments. The
consultation sessions were coordinated
by FNS and held on the following dates
and locations:
1. HHFKA Webinar & Conference
Call—April 12, 2011
2. Mountain Plains—HHFKA
Consultation, Rapid City, SD—March
23, 2011
3. HHFKA Webinar & Conference
Call—June, 22, 2011
4. Tribal Self-Governance Annual
Conference in Palm Springs, CA—May
2, 2011
5. National Congress of American
Indians Mid-Year Conference,
Milwaukee, WI—June 14, 2011
The five consultation sessions in total
provided the opportunity to address
Tribal concerns related to school meals.
There were no comments about this
regulation during any of the
aforementioned Tribal consultation
sessions.
Reports from these consultations are
part of the USDA annual reporting on
Tribal consultation and collaboration.
FNS will respond in a timely and
meaningful manner to Tribal
government requests for consultation
concerning this rule. Currently, FNS
provides regularly scheduled quarterly
consultation sessions as a venue for
collaborative conversations with Tribal
officials or their designees.
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Regulatory Impact Analysis Summary
As required for all rules that have
been designated as significant by the
Office of Management and Budget, a
Regulatory Impact Analysis (RIA) was
developed for this proposal. A summary
is presented below. The full RIA is
published as part of the Docket on
www.regulations.gov.
Need for Action
The proposed rule responds to two
provisions of the Healthy, Hunger-Free
Kids Act of 2010. Section 208 of
HHFKA amended Section 10 of the
Child Nutrition Act of 1966 to require
the Secretary to establish science-based
nutrition standards for all foods sold in
schools during the school day.
Benefits
The primary purpose of the proposed
rule is to ensure that nutrition standards
for competitive foods are consistent
with the most recent DGA
recommendations, effectively holding
competitive foods to the same standards
as the rest of the foods sold at school
during the school day. These standards,
combined with recent improvements in
school meals, will help promote diets
that contribute to students’ long-term
health and well-being. And they will
support parents’ efforts to promote
healthy choices for children at home
and at school.
Obesity has become a major public
health concern in the U.S., with onethird of U.S. children and adolescents
now considered overweight or obese
(Beydoun and Wang 2011 4), with
current childhood obesity rates four
times higher in children ages six to 11
than they were in the early 1960s (19 vs.
4 percent), and three times higher (17
vs. 5 percent) for adolescents ages 12 to
19.5 Research focused specifically on
the effects of obesity in children
indicates that obese children feel they
are less capable, both socially and
athletically, less attractive, and less
worthwhile than their non-obese
counterparts.6 Further, there are direct
4 Beydoun, M.A. and Y. Wang. 2011. Sociodemographic disparities in distribution shifts over
time in various adiposity measures among
American children and adolescents: What changes
in prevalence rates could not reveal. International
Journal of Pediatric Obesity, 6:21–35. As cited in
Food Labeling: Calorie Labeling of Articles of Food
in Vending Machines NPRM. 2011. Preliminary
Regulatory Impact Analysis, Docket No. FDA–2011–
F–0171.
5 Ogden et al. Prevalence of Obesity Among
Children and Adolescents: United States, Trends
1963–1965 Through 2007–2008. CDC–NHCS, NCHS
Health E–Stat, June 2010. On the web at http://
www.cdc.gov/nchs/data/hestat/
obesity_child_07_08/obesity_child_07_08.htm.
6 Riazi, A., S. Shakoor, I. Dundas, C. Eiser, and
S.A. McKenzie. 2010. Health-related quality of life
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economic costs due to childhood
obesity: $237.6 million (in 2005 dollars)
in inpatient costs 7 and annual
prescription drug, emergency room, and
outpatient costs of $14.1 billion.8
Because the factors that contribute
both to overall food consumption and to
obesity are so complex, it is not possible
to define a level of disease or cost
reduction expected to result from
implementation of the rule. There is
some evidence, however, that
competitive food standards can improve
children’s dietary quality:
• Taber, Chriqui, and Chaloupka
(2012 9) concluded that California high
school students consumed fewer
calories, less fat, and less sugar at school
than students in other States. Their
analysis ‘‘suggested that California
students did not compensate for
consuming less within school by
consuming more elsewhere’’ (p. 455).
• Schwartz, Novak, and Fiore,
(2009 10) determined that healthier
competitive food standards decreased
student consumption of low nutrition
items with no compensating increase at
home.
• Researchers at Healthy Eating
Research and Bridging the Gap found
that ‘‘[t]he best evidence available
indicates that policies on snack foods
and beverages sold in school impact
children’s diets and their risk for
obesity. Strong policies that prohibit or
restrict the sale of unhealthy
competitive foods and drinks in schools
are associated with lower proportions of
overweight or obese students, or lower
rates of increase in student BMI’’
(Healthy Eating Research and Bridging
the Gap, 2012, p. 3 11).
in a clinical sample of obese children and
adolescents. Health and Quality of Life Outcomes,
8:134–139.Samuels & Associates. 2006. Competitive
Foods. Policy Brief prepared by Samuels &
Associates for The California Endowment and
Robert Wood Johnson Foundation. Available at:
http://www.healthyeatingactivecommunities.org/
downloads/
7 Trasande, L., Y. Liu, G. Fryer, and M. Weitzman.
2009. Trends: Effects of Childhood Obesity on
Hospital Care and Costs, 1999–2005. Health Affairs,
28:w751-w760.
8 Cawley, J. 2010. The Economics of Childhood
Obesity. Health Affairs, 29:364–371. As cited in
Food Labeling: Calorie Labeling of Articles of Food
in Vending Machines NPRM. 2011. Preliminary
Regulatory Impact Analysis, Docket No. FDA–2011–
F–0171.
9 Taber, D.R., J.F. Chriqui, and F. J. Chaloupka.
2012. Differences in Nutrient Intake Associated
With State Laws Regarding Fat, Sugar, and Caloric
Content of Competitive Foods. Archives of Pediatric
& Adolescent Medicine, 166:452–458.
10 Schwartz, M.B., S.A. Novak, and S.S. Fiore.
2009. The Impact of Removing Snacks of Low
Nutritional Value from Middle Schools. Health
Education & Behavior, 36:999–1011.
11 Healthy Eating Research and Bridging the Gap.
2012. Influence of Competitive Food and Beverage
Policies on Children’s Diets and Childhood Obesity.
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Federal Register / Vol. 78, No. 27 / Friday, February 8, 2013 / Proposed Rules
A recent, comprehensive, and
groundbreaking assessment of the
evidence on the importance of
competitive food standards conducted
by the Pew Health Group concluded
that a national competitive foods policy
would increase student exposure to
healthier foods, decrease exposure to
less healthy foods, and would also
likely improve the mix of foods that
students purchase and consume at
school. Researchers concluded that
these kinds of changes in food exposure
and consumption at school are
important influences on the overall
quality of children’s diets.
Although nutrition standards for
foods sold at school alone may not be
a determining factor in children’s
overall diets, they are critical to
providing children with healthy food
options throughout the entire school
day. Thus, these standards will help to
ensure that the school nutrition
environment does all that it can to
promote healthy choices, and help to
prevent diet-related health problems.
Ancillary benefits could derive from the
fact that improving the nutritional value
of competitive foods may reinforce
school-based nutrition education and
promotion efforts and contribute
significantly to the overall effectiveness
of the school nutrition environment in
promoting healthful food and physical
activity choices.12
srobinson on DSK4SPTVN1PROD with PROPOSALS2
Costs
The proposed rule requires schools to
improve the nutritional quality of foods
offered for sale to students outside of
the Federal school lunch and school
breakfast programs. The new standards
`
apply to foods sold a la carte, in school
stores or vending machines, and,
pending provisions of the final rule
regarding occasional exemptions,
through in-school fundraisers sponsored
by students, parents, or other schoolaffiliated groups. Upon implementation
of the rule, students will face new food
choices from these sources. The new
choices will meet standards for fat,
saturated fat, sugar, and sodium, and
have whole grains, low fat dairy, fruits,
vegetables, or protein foods as their
main ingredients. Our analysis
examines a range of possible behavioral
Available at http://www.healthyeatingresearch.org/
images/stories/her_research_briefs/
Competitive_Foods_Issue_Brief_HER_BTG_72012.pdf.
12 Pew Health Group and Robert Wood Johnson
Foundation. 2012. Heath Impact Assessment:
National Nutrition Standards for Snack and a la
Carte Foods and Beverages Sold in Schools.
Available online: http://www.pewhealth.org/
uploadedFiles/PHG/Content_Level_Pages/Reports/
KS%20HIA_FULL%20Report%20062212
_WEB%20FINAL-v2.pdf.
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responses of students and schools to
these changes. To estimate potential
effects on school revenue, we look to the
experience of school districts that have
adopted or piloted competitive food
reforms in recent years.
The practice of selling foods in
competition with Federally
reimbursable program meals and snacks
is widespread. In SY 2004–2005, 82
percent of all schools—and 92 percent
`
of middle and high schools—offered a la
carte foods at lunch. Vending machines
were available in 52 percent of all
schools and 26 percent of elementary
schools, 87 percent of middle schools,
and 98 percent of high schools (Gordon,
et al., 2007; Volume 1, pp 102–114).
The limited information available
indicates that many schools have
successfully introduced competitive
food reforms with little or no loss of
revenue and in a few cases, revenues
from competitive foods increased after
introducing healthier foods. In some of
the schools that showed declines in
competitive food revenues, losses from
reduced sales were fully offset by
increases in reimbursable meal revenue.
In other schools, students responded
favorably to the healthier options and
competitive food revenue declined little
or not at all.
But not all schools that adopted or
piloted competitive food standards fared
as well. Some of the same studies and
reports that highlight school success
stories note that other schools sustained
some loss after implementing similar
standards. While in some cases these
were short-term losses, even in the longterm the competitive food revenue lost
by those schools was not offset (at least
not fully) by revenue gains from the
reimbursable meal programs.
Our analysis examines the possible
effects of the proposed rule on school
revenues from competitive foods and
the administrative costs of complying
with the rule’s competitive foods
provisions. The analysis uses available
data to construct model-based scenarios
that different schools may experience in
implementing the proposed rule. While
these vary in their impact on overall
school food revenue, each scenario’s
estimated impact is relatively small
(+0.4 percent to ¥0.7 percent). In
comparison, the regulations
implementing the school food service
revenue provisions of HHFKA would
increase average overall school food
revenue by roughly six percent. That
said, the data behind the scenarios are
insufficient to assess the frequency or
probability of schools experiencing the
impacts shown in each.
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9545
List of Subjects
7 CFR Part 210
Grant programs-education; Grant
programs-health; Infants and children;
Nutrition; Reporting and recordkeeping
requirements; School breakfast and
lunch programs; Surplus agricultural
commodities.
7 CFR Part 220
Grant programs-education; Grant
programs-health; Infants and children;
Nutrition; Reporting and recordkeeping
requirements; School breakfast and
lunch programs.
Accordingly, for the reasons
discussed in the preamble, 7 CFR parts
210 and 220 are proposed to be
amended as follows:
PART 210—NATIONAL SCHOOL
LUNCH PROGRAM
1. The authority citation for 7 CFR
part 210 continues to read as follows:
■
Authority: 42 U.S.C. 1751–1760, 1779.
2. In § 210.1, revise the second
sentence of paragraph (b) to read as
follows:
■
§ 210.1
General purpose and scope.
*
*
*
*
*
(b) * * * It specifies Program
responsibilities of State and local
officials in the areas of program
administration, preparation and service
of nutritious lunches, the sale of
competitive foods, payment of funds,
use of program funds, program
monitoring and reporting and
recordkeeping requirements.
■ 3. In § 210.10, amend paragraphs
(a)(1)(i) and (a)(1)(ii) by adding a new
sentence at the end of the each
paragraph.
The additions read as follows:
§ 210.10 Nutrition standards and menu
planning approaches for lunches and
requirements for afterschool snacks.
(a) * * *
(1) * * *
(i) * * * Schools shall make potable
water available to children at no charge
in the place where lunches are served
during the meal service.
(ii) * * * Schools shall make potable
water available to children at no charge
in the place where afterschool snacks
are served during the afterschool snack
service.
*
*
*
*
*
■ (4) Revise § 210.11 to read as follows:
§ 210.11 Competitive food service and
standards.
(a) Definitions. For the purpose of this
section:
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Federal Register / Vol. 78, No. 27 / Friday, February 8, 2013 / Proposed Rules
(1) Competitive food means all food
and beverages other than meals
reimbursed under programs authorized
by the Richard B. Russell National
School Lunch Act and the Child
Nutrition Act of 1966 available for sale
to students on the School campus
during the School day;
(2) School day means, for the purpose
of competitive food standards
implementation, the period from the
midnight before, to 30 minutes after the
end of the official school day;
(3) School campus means, for the
purpose of competitive food standards
implementation, all areas of the
property under the jurisdiction of the
school that are accessible to students
during the school day; and
(4) Combination foods means
products that contain two or more
components representing two or more of
the recommended food groups: fruit,
vegetable, dairy, protein or grains.
(b) General requirements for
competitive food.
(1) State agencies and/or local
educational agencies shall establish
such policies and procedures as are
necessary to ensure compliance with
this section. State agencies and/or local
educational agencies may impose
additional restrictions on competitive
foods, provided that they are not
inconsistent with the requirements of
this part.
(2) The sale of otherwise allowable
calorie-free and low calorie, flavored
and/or carbonated water as provided in
paragraphs (m)(3)(vi), (m)(3)(vii), and
(m)(3)(viii) of this section in food
service areas during the meal service is
prohibited.
(3) The local educational agency is
responsible for the maintenance of
records that document compliance with
the nutrition standards for all
competitive food available for sale to
students in areas under its jurisdiction
that are outside of the control of the
school food authority responsible for the
service of reimbursable school meals.
School food authorities shall be
responsible for maintaining records
documenting compliance with these
standards in meal service areas during
meal service periods. The local
educational agency shall be responsible
for ensuring that organizations
designated as responsible for food
service at the various venues in the
schools maintain records in order to
ensure and document compliance with
the nutrition requirements for the foods
and beverages available to be sold to
students at these venues during the
school day as required by this part. At
a minimum, such records shall include
receipts, nutrition labels and/or product
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specifications for the items available for
sale to students on the school campus
during the school day.
(4) The nutrition standards for the
sale of competitive food outlined in this
section shall apply to competitive food
for all programs authorized by the
Richard B. Russell National School
Lunch Act and the Child Nutrition Act
of 1966 operating on the school campus
during the school day.
(5) Fundraiser restrictions. Food and
beverage items sold during the school
day shall meet the nutrition standards
for competitive food as required in this
part. A special exemption shall be
allowed for the sale of food and/or
beverages that do not meet the
competitive food nutrient standards as
required in this section for the purpose
of conducting a school-sponsored
fundraiser. Such specially exempted
fundraisers shall not take place more
than:
(i) Alternative E1: the frequency
specified by the State agency during
such periods that schools are in session;
or
(ii) Alternative E2: the frequency
specified by the State agency and
approved by USDA during such periods
that schools are in session.
No specially exempted fundraiser
foods or beverages may be sold in
competition with school meals in the
food service area during the meal
service.
(c) General nutrition standards for
competitive foods.
(1) At a minimum, all competitive
food sold to students on the school
campus during the school day must
meet the nutrition standards specified
in this section.
(2) To be allowable, a competitive
food item must:
(i) Meet all of the competitive food
nutrient standards as outlined in this
section; and
(ii) Be a grain product that contains 50
percent or more whole grains by weight
or have as the first ingredient a whole
grain; or
(iii) Have as the first ingredient one of
the non-grain main food groups: fruit,
vegetable, dairy product or protein
foods (meat, beans, poultry, seafood,
eggs, nuts, seeds, etc.); or
(iv) Contain 10 percent of the Daily
Value of a naturally occurring nutrient
of public health concern (i.e., calcium,
potassium, vitamin D or dietary fiber);
or
(v) Be a combination food that
contains 1⁄4 cup of fruit or vegetable; and
(vi) If water is the first ingredient, the
second ingredient must be one of the
food items in (c)(2)(i), (c)(2)(ii),
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Fmt 4701
Sfmt 4702
(c)(2)(iii), (c)(2)(iv) or (c)(2)(v) of this
section.
(3) Exemptions.
(i) Alternative A1: All menu items
provided as part of the NSLP or SBP
reimbursable meal are exempt from
these competitive food standards with
the exception of the standards
established for total fat and sugar, as
specified. Grain based dessert products
must meet all standards in order to be
served. Such menu items shall be served
in the same or smaller portion sizes as
in the NSLP or SBP to be allowable; or
(ii) Alternative A2: All menu items
provided as part of the NSLP or SBP
reimbursable meal are exempt from
these competitive food standards, with
the exception of grain based dessert
products which must meet all standards
in order to be served. Such menu items
shall be served in the same or smaller
portion sizes as in the NSLP or SBP to
be allowable, and must meet the
timeframe exemptions specified in
paragraph (4) of this section.
(4) Exemptions.
(i) Alternative B1: Exemptions to
these nutrition requirements include
side dishes (other than grain based
´
dessert items) and entree items sold a la
carte in accordance with the
requirements of paragraph (3)(ii)
[Alternative A2] that are NSLP or SBP
meal items that are offered on the same
day as part of the reimbursable school
´
meal. Such side dishes and entree items
must be offered in the same or smaller
portion size as offered in the NSLP or
SBP and meet the standards specific to
the NSLP and SBP; or
(ii) Alternative B2: Exemptions to
these nutrition requirements include
side dishes (other than grain based
´
dessert items) and entree items sold a la
carte in accordance with the
requirements of paragraph (3)(ii)
[Alternative A2] that are NSLP or SBP
meal items that are offered within four
operating days of their service as part of
the reimbursable school meal during the
current menu cycle. Such side dishes
´
and entree items must be offered in the
same or smaller portion size as offered
in the NSLP or SBP and meet the
standards specific to the NSLP and SBP.
(d) Fruits and vegetables. Fresh,
frozen and canned fruits and vegetables
with no added ingredients except water
or, in the case of fruit, packed in 100
percent fruit juice or extra light syrup,
are exempt from the nutrient standards
included in this section.
(e) Grain products. Grain products
acceptable as a competitive food must
include 50 percent or more whole grains
by weight or have whole grain as the
first ingredient. Grain products shall
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Federal Register / Vol. 78, No. 27 / Friday, February 8, 2013 / Proposed Rules
meet all of the other nutrient standards
included in this section.
(f) Total fat.
(1) The total fat content of a
competitive food shall be not more than
35 percent of total calories from fat per
portion as packaged.
(2) Exemptions to this requirement
include the following:
(i) Reduced fat cheese is exempt from
the total fat and saturated fat standard,
but subject to the required trans fat,
calorie, sugar and sodium standards;
(ii) Nuts and Seeds and Nut/Seed
Butters are exempt from total fat
standard, but subject to the required
saturated fat, trans fat, calorie, sugar and
sodium standards. This exemption does
not extend to combination products that
contain nuts, nut butters or seeds or
seed butters with other ingredients such
as peanut butter and crackers, trail mix,
chocolate covered peanuts, etc.;
(iii) Products that consist of only
dried fruit with nuts and/or seeds with
no added nutritive sweeteners or fat are
exempt from the total fat and sugar
standards, but subject to the required
saturated fat, trans fat, calorie and
sodium standards; and
(iv) Seafood with no added fat is
exempt from the total fat requirement in
order to increase omega-3 fatty acids in
diets as recommended by the 2010 DGA;
but subject to the required sugar,
saturated fat, trans fat, calorie and
sodium standards.
(g) Saturated fat.
(1) The saturated fat content of a
competitive food must be less than 10
percent of total calories per portion,
except as specified in paragraph (g)(2).
(2) Reduced fat cheese is exempt from
the total fat and saturated fat standards,
but subject to the calorie, trans fat, sugar
and sodium standards.
(h) Trans fat. The trans fat content of
a competitive food must be zero grams
trans fat per portion as packaged (not
more than 0.5 grams per portion).
(i) Total sugars.
(1) Alternatives.
(i) Alternative C1: Total sugars
contained in a competitive food item
must be not more than 35 percent of
calories per portion.
(ii) Alternative C2: Total sugars
contained in a competitive food item
must be not more that 35 percent of
weight per portion.
(2) Exemptions to this requirement
are:
(i) Dried whole fruits or vegetables;
dried whole fruit or vegetable pieces;
and dried dehydrated fruits or
vegetables with no added nutritive
sweeteners are exempt from the sugar
standard, but subject to the calorie, total
fat, saturated fat, trans fat and sodium
standards;
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(ii) Products that consist of only dried
fruit with nuts and/or seeds with no
added nutritive sweeteners or fat are
exempt from the total fat and sugar
standards, but subject to the calorie,
trans fat, saturated fat and sodium
standards; and
(iii) Flavored and unflavored nonfat
and low-fat yogurt with no more than 30
grams of total sugars per 8 ounce serving
is exempt from the sugar standard, but
subject to the calorie, total fat, saturated
fat, trans fat and sodium standards.
(j) Calorie and sodium content for
snack items and side dishes sold a la
carte. Snack items and side dishes sold
a la carte other than those exempt from
the competitive food nutrition standards
as provided in § 210.11(c)(3) shall have
not more than 200 calories and not more
than 200 mg of sodium per portion as
served, including the calories and
sodium contained in any added
accompaniments such as butter, cream
cheese, salad dressing etc., and shall
meet all of the other nutrient standards
´
for non entree items.
(k) Calorie and sodium content for
´
entree items sold a la carte.
´
(1) An entree item is defined as an
item that is either:
(i) A combination food of meat or
meat alternate and whole grain-rich/
bread; or
(ii) A combination food of vegetable
or fruit and meat or meat alternate; or
(iii) A meat or meat alternate alone
with the exception of yogurt, low-fat or
reduced fat cheese, nuts, seeds and nut
or seed butters.
´
(2) Entree items sold a la carte other
than those exempt from the competitive
food nutrition standards as provided in
§ 210.11(c)(3) shall contain no more
than 350 calories and 480 mg. of sodium
per portion as served and meet all of the
other nutrient standards in this section.
(l) Caffeine. Foods and beverages
available to elementary and middle
school-aged students shall be caffeinefree, with the exception of trace
amounts of naturally occurring caffeine
substances.
(m) Beverages.
(1) Allowable beverages for
elementary school-aged students shall
be limited to:
(i) Plain water (no size limit);
(ii) Low fat milk, plain (no more than
8 fluid ounces);
(iii) Non fat milk, plain or flavored
(no more than 8 fluid ounces);
(iv) Nutritionally equivalent milk
alternatives as permitted in § 210.10 and
§ 220.8 (no more than 8 fluid ounces);
and
(v) 100 percent fruit/vegetable juice
(no more than 8 fluid ounces).
(2) Allowable beverages for middle
school-aged students shall be limited to:
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(i) Plain water (no size limit);
(ii) Low fat milk, plain (no more than
12 fluid ounces);
(iii) Non fat milk, plain or flavored
(no more than 12 fluid ounces);
(iv) Nutritionally equivalent milk
alternatives as permitted in § 210.10 and
§ 220.8 (no more than 12 fluid ounces);
and
(v) 100 percent fruit/vegetable juice
(no more than 12 fluid ounces).
(3) Allowable beverages for high
school-aged students shall be limited to:
(i) Plain water (no size limit);
(ii) Low fat milk, plain (no more than
12 fluid ounces);
(iii) Non fat milk, plain or flavored
(no more than 12 fluid ounces);
(iv) Nutritionally equivalent milk
alternatives as permitted in § 210.10 and
§ 220.8 (no more than 12 fluid ounces);
(v) 100 percent fruit/vegetable juice
(no more than 12 fluid ounces);
(vi) Calorie-free, flavored and/or
carbonated water (no more than 20 fluid
ounces), except that such beverages
shall not be available or served to
students in the food service area during
the meal service period;
(vii) No more than 20 fluid ounce
servings of other beverages that comply
with the Food and Drug Administration
requirement for bearing a ‘‘calorie free’’
claim of less than 5 kcals/serving,
except that such beverages shall not be
available or served to students in the
food service area during the meal
service period; and
(viii) Alternative D1: No more than 12
fluid ounce servings of other beverages
that contain no more than 40 calories
per 8 fluid ounce serving or 60 calories
per 12 fluid ounce serving, except that
such beverages shall not be available or
served to students in the food service
area during the meal service period; or
(ix) Alternative D2: No more than 12
fluid ounce servings of other beverages
that contain no more than 50 calories
per 8 fluid ounce serving or 75 calories
per 12 ounce serving, except that such
beverages shall not be available or
served to students in the food service
area during the meal service period.
(n) Accompaniments. The use of
accompaniments shall be limited when
competitive food is sold to students in
school. All accompaniments to a
competitive food item shall be preportioned and the ingredients of such
accompaniments must be included in
the nutrient profile as a part of the food
item served and shall meet all of the
nutritional standards for competitive
food as required in this section.
■ 5. In § 210.18, a new paragraph (h)(7)
is added to read as follows:
§ 210.18
*
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(h) * * *
(7) Compliance with competitive food
standards. The State agency shall
ensure that the local educational agency
complies with the nutrition standards
for competitive foods and retains
documentation demonstrating
compliance with the competitive food
service and standards outlined in
§ 210.11.
■ 6. Appendix B to Part 210 is removed
and reserved.
PART 220—SCHOOL BREAKFAST
PROGRAM
1. The authority citation for 7 CFR
part 220 continues to read as follows:
■
Authority: 42 U.S.C. 1773, 1779, unless
otherwise noted.
2. In § 220.2,
(a) The definition of ‘‘Foods of
minimal nutritional value’’ is removed;
and
(b) The definition of ‘‘Competitive
foods’’ is removed.
■ 3. Section 220.12 is revised as follows:
■
§ 220.12
Competitive food services.
Competitive food services shall
comply with the requirements specified
in § 210.11 of this chapter.
■ 4. Appendix B to Part 220 is removed
and reserved.
Dated: February 1, 2013.
Kevin W. Concannon,
Under Secretary, Food, Nutrition, and
Consumer Services.
Note: The following appendix will not
appear in the Code of Federal Regulations:
srobinson on DSK4SPTVN1PROD with PROPOSALS2
Initial Regulatory Flexibility Analysis—
Proposed Rule
National School Lunch Program and School
Breakfast Program: Nutrition Standards for
All Foods Sold in School as Required by the
Healthy, Hunger-Free Kids Act of 2010
Agency: Food and Nutrition Service,
USDA.
Background: The Regulatory Flexibility
Act (RFA) requires agencies to consider the
impact of their rules on small entities and to
evaluate alternatives that would accomplish
the same objectives without undue burden
when the rules impose a significant
economic impact on a substantial number of
small entities. Inherent in the RFA is the
desire to remove barriers to competition and
encourage consideration of ways to tailor
regulations to the size of the regulated
entities.
The RFA does not require that agencies
necessarily minimize a rule’s impact on
small entities if there are significant, legal,
policy, factual, or other reasons for the rule’s
impacts. The RFA requires only that agencies
determine, to the extent feasible, the rule’s
economic impact on small entities, explore
regulatory alternatives for reducing any
significant economic impact on a substantial
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number of such entities, and explain the
reasons for their regulatory choices.
Reasons That Action Is Being Considered:
This rule sets forth proposed provisions to
implement section 208 of Public Law 111–
296, the Healthy, Hunger-Free Kids Act of
2010 (HHFKA). Section 208 amends Section
10 of the Child Nutrition Act of 1966 (42
U.S.C. 1779) (CNA) to give the Secretary of
Agriculture new authority to establish
science-based nutrition standards for all
foods and beverages sold outside of the
Federal child nutrition programs on the
school campus during the school day. The
Act also specifies that the nutrition standards
shall apply to all foods sold (a) outside the
school meal programs; (b) on the school
campus; and (c) at any time during the school
day.
Objectives of, and Legal Basis for, the
Proposed Rule: As stated above, the legal
basis for the proposed rule are the
amendments made to the CNA by HHFKA.
The objectives of this rule are to establish
nutrition standards for all foods sold to
students in schools other than meals served
through child nutrition programs authorized
under the NSLA or the CNA and to improve
the health and well being of the Nation’s
school-aged children.
Number of Small Entities to Which the
Proposed Rule Will Apply: This proposed
rule directly regulates the 55 State education
agencies and 2 State Departments of
Agriculture that operate the NSLP pursuant
to agreements with USDA’s Food and
Nutrition Service. In turn, its provisions
apply to school districts, school food
authorities, schools and others that prepare
and sell foods other than those provided as
reimbursable school lunches and breakfasts
`
(such as a la carte food sales, vending
machines, or other competitive food venues).
While State agencies are not considered
small entities as State populations exceed the
50,000 threshold for a small government
jurisdiction, many of the service-providing
institutions that work with them to
implement the program do meet definitions
of small entities:
• Nearly 101,000 schools and residential
child care institutions (RCCIs) participate in
NSLP. These include more than 90,000
public schools, 6,000 private schools, and
about 5,000 RCCIs. A majority of those
institutions also provide competitive foods
`
through a la carte menus, vending, school
stores, snack bars, fundraisers, or some
combination of venues. Within individual
schools, a variety of school groups (e.g.,
student clubs, parent teacher organizations,
or parent ‘‘booster’’ organizations supporting
activities such as sports, music, and
enrichment activities) earn revenue from
competitive foods.
• School Food Authorities (SFAs) earn
competitive food revenues primarily through
`
a la carte sales, but may also earn revenues
from vending machine sales, school stores,
snack bars, and other outlets.
• Manufacturers, wholesalers, and
distributors, including vending machine
operators, are not regulated by the proposed
rule, but are indirectly affected. Of this
group, vending operators with machines in
primary and secondary schools may be the
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most affected. Vending businesses tend to
have few employees; 76 percent of
companies that operated for the entire year
in 2007 employed fewer than 10 people.13
Vending machines in primary and secondary
schools make up just two percent of vending
industry sales.14
• Food service management companies
(FSMCs) that prepare school meals or menus
under contract to SFAs may be indirectly
affected by the proposed rule in that they
´
may also prepare foods for the a la carte
menu. Thirteen percent of public school
SFAs contracted with FSMCs in school year
(SY) 2004–2005.15 Of 23,000 food service
contractors that operated for the full year in
2007, 86 percent employed fewer than 100
workers.16
Projected Reporting, Recordkeeping and
Other Compliance Requirements: The
analysis below covers only those
organizations impacted by the proposed rule
that were determined to be small entities.
School Food Authorities and Other School
Groups
An estimated 95 percent of competitive
school food sales accrue to SFAs; the
remaining five percent accrues to other
school groups such as student clubs, parent
teacher organizations, or parent ‘‘booster’’
organizations. If SFAs, other school groups,
and the food industry are able to satisfy
current student demand for competitive
foods with new options that meet the
proposed rule standards, then there may be
no change in competitive food sales or
competitive food revenue. And although the
evidence base is limited, it suggests that
many SFAs and other school groups have
successfully introduced competitive food
reforms with little or no loss of revenue, and
in a few cases, revenues from competitive
food sales have increased after introducing
healthier foods. In some cases, decreases in
competitive food sales have been offset by
increases in school meal participation. In
other cases, schools have experienced a
decline in overall school food revenue.
The available data do not allow us to
estimate the potential school revenue effect
with any certainty. Instead, we have prepared
13 Vending machine operators are described by
‘‘NAICS’’ code 454210. The code does not account
for all vending machine businesses and data is not
available to assess the proportion of vending
machine businesses in schools. The statistics by
establishment size are from the U.S. Census Bureau,
2007 Economic Census. Table 2, ‘‘Employment Size
of Establishments for the U.S.’’ on http://
www.census.gov/econ/industry/ec07/a454210.htm.
14 The vending industry estimates that primary
and secondary schools accounted for 2.2 percent
($1 billion out of $45.6 billion) of total vending
machine sales in 2008. Census of the Industry 2009,
Vending Times, http://www.vendingtimes.com/
Media/Sites-AdministratorsSiteNavigation/Vending
Times_Census2009.pdf.
15 U.S. Department of Agriculture, Food and
Nutrition Service, Office of Research, Nutrition and
Analysis, School Nutrition Dietary Assessment
Study-III, Vol. I, 2007, p. 34 http://
www.fns.usda.gov/ora/MENU/Published/CNP/
FILES/SNDAIII–Vol1.pdf.
16 Census Bureau, 2007 Economic Census, NAICS
72231. Table 2, ‘‘Employment Size of
Establishments for the U.S.’’ on http://
www.census.gov/econ/industry/ec07/a72231.htm.
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a series of estimates that represent a range of
plausible outcomes given the variety of
experiences observed in several case studies.
At one end of this range, we calculate that
a four percent increase in competitive food
revenues would result in a +0.4 percent
increase in school food revenue over five
years. At the other end of the range, we
calculate that the standards in the proposed
rule could reduce competitive food revenue
by an estimated 4.8 percent, resulting in an
overall decrease in school food revenues of
¥0.7 percent over five years. (Additional
detail is provided in the Regulatory Impact
Analysis for this rule.)
Case studies that consider the impacts of
competitive food nutrition standards on SFA
revenues find that reductions in competitive
food revenue were often fully offset by
increases in reimbursable meal revenue as
students redirected their demand for
competitive foods to the reimbursable school
meal programs. In other instances, the lost
competitive food revenue was not offset (at
least not fully) by revenue gains from the
reimbursable meal programs. Most SFAs
have a number of options and some
flexibility within available revenue streams
and operations that can help minimize lost
revenue. For example, about half of all SFA
revenues are from Federal payments for
reimbursable meals. SFAs can increase
revenues to the extent that schools
successfully encourage greater meal
participation. In addition, the revenue
impacts presented here are from a baseline
that increased substantially at the start of SY
2011–2012, on implementation of interim
final regulations for Sections 205 and 206 of
HHFKA. These provisions will ensure that
the revenue from competitive food sales is
aligned with their cost.17 The requirements
of Section 206 are estimated to increase
competitive food revenue by 35 percent,
while the scenarios presented here anticipate
a competitive food revenue loss of no more
than 4.8 percent. The combined effect of both
provisions remains a net increase in SFA
competitive food revenue under all of these
scenarios.18
It is also worth noting that USDA estimates
that just over 98 percent of SFA competitive
`
food revenue is generated by sales of a la carte
`
foods and ‘‘many foods are only offered a la
carte when available as part of a reimbursable
meal’’ (SNDA–III, p. 119).19 Under
regulations that took effect July 1, 2012,
school meals are currently required to meet
new nutrition standards. Because the school
meal standards are similar to those proposed
for competitive foods, many of the foods
`
served a la carte will meet the standards in
the final competitive food rule before it takes
´
effect. For other entrees and side dishes
served as part of a reimbursable meal, the
proposed rule would provide a limited
exemption from competitive food
17 Federal Register, Vol. 76, No. 117, pp. 35301–
35318.
18 The same is not true of competitive food
revenue of non-SFA school groups. Competitive
food revenue that does not accrue to the foodservice
account is not subject to regulation under Section
206.
19 SNDA III: www.fns.usda.gov/Ora/menu/
Published/CNP/FILES/SNDAIII–Vol1.pdf.
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requirements. In addition, the new school
meal nutrition standards will provide an
opportunity for schools and for industry to
adjust to the new requirements before the
competitive food standards take effect. In
addition, at least 39 States currently have
competitive food policies, the majority of
which exceed existing Federal standards. In
these States, industry may already have made
a number adjustments to the products offered
for sale.
Unlike SFAs other school groups cannot
make up lost revenues through school meal
sales. The proposed rule mitigates the impact
of the proposed rule on such groups by
providing an exception for occasional
fundraisers that do not meet the proposed
competitive food standards. Alternatively,
these groups may explore fundraising options
that include foods that do meet the proposed
standards or find other modes of fundraising
that do not include competitive foods.
operators that operated for all of 2007
generated less than $250,000 in receipts,
although those operators accounted for less
than 3 percent of total revenue from this
industry group.23 Because of the relatively
large number of small vending machine
operators, some small vendors may be
challenged by the changes contained in the
proposed rule. Whether small or large, many
vending machine operators will need to
modify their product lines to meet the
requirements of the rule.
(2) Food Service Management Companies.
FSMCs are potentially indirectly affected
`
by the proposed rule. FSMCs that provide a
la carte foods to schools under contract to
SFAs will need to provide foods that conform
to the changes in the proposed rule. As with
the SFAs, we anticipate that many of those
costs will have already been incurred
through changes in the school meal
requirements.
Industry Groups
Manufacturers, wholesalers, foodservice
management companies, and distributors,
including vending machine operators, are not
directly regulated under the proposed rule
but may be affected indirectly in the sense
that schools will need to purchase a different
mix of foods to satisfy the requirements of
the rule. However, many States have already
adopted their own competitive food
standards, and the food industry is already
responding by producing a variety of
products that meet current State as well as
the proposed Federal standards. Consider, for
example, that Wescott et al. (2012) found that
between 2004 and 2009, the beverage
industry reduced calories shipped to schools
by 90 percent, with a total volume reduction
in full-calorie soft drinks of over 95 percent.
Consistent with SBA guidance, which
notes that ‘‘[t]he courts have held that the
RFA requires an agency to perform a
regulatory flexibility analysis of small entity
impacts only when a rule directly regulates
them’’ (SBA, p. 20),20 we do not attempt to
quantify the economic effect of the proposed
rule on these industry groups. However, we
briefly mention two industry groups that may
be more directly affected by the rule than
others.
(1) Vending.
Vending machine operators served an
estimated 19,000 primary and secondary
schools in the U.S. in 2008.21 For 2008, the
vending industry estimated that primary and
secondary schools accounted for just two
percent of total vending machine dollar sales.
Both industry and U.S. Census data indicate
that most vending machine operations are
small businesses. The majority of vending
machine operators that operated for the
entire year in 2007 (76 percent) employed
fewer than 10 individuals according to the
U.S. Economic Census.22 The same source
also finds that 37 percent of vending machine
Administrative Costs
The proposed rule requires that State
agencies ensure that all schools, SFAs, and
other food groups comply with its
competitive food standards. State agencies
must also retain documentation
demonstrating compliance. Schools, SFAs,
and other food groups are responsible for
maintaining records documenting
compliance with competitive food standards.
It is anticipated that the administrative cost
to 57 State agencies, 101,000 schools, and
21,000 SFAs will total $124 million over five
years (or about $245 per school per year on
average).
20 SBA,
‘‘A Guide for Government Agencies’’.
Census of the Industry,
2009 Edition. Automatic Merchandiser magazine,
June/July 2011.
22 Data for NAICS code 454210, ‘‘vending
machine operators.’’ U.S. Census Bureau, http://
www.census.gov/econ/industry/ec07/a454210.htm
(accessed 11/13/2011).
21 VendingTimes.com,
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Distributional Impacts
A key characteristic associated with a
school’s dependence on competitive food
revenue is grade level. High schools are more
likely to offer competitive foods than are
`
elementary schools. This is true of a la carte
foods, foods sold through vending machines,
and foods sold in school stores or snack
bars.24 Competitive food revenue is also
associated with a school’s mix of low and
high income students. According to SNDA–
III, schools serving at least one-third of their
meals at full price to higher income students
obtain more than seven times as much
revenue from competitive food sales as
schools serving a larger percentage of free
and reduced-price (and hence lower-income)
students.25 Other factors that may be
associated with student access to competitive
food sources and school revenue from
competitive foods include whether students
have the option of leaving campus during the
school day, and whether schools grant
students the right to leave the cafeteria
during meal times. Generally, student
23 Ibid. Note that these statistics are for all
vending machine operators in NAICS code
4545210, not just those that serve the school
market. We do not know whether the concentration
of small vending machine operators that serve the
school market differs from the concentration of
small operators in the industry as a whole.
24 U.S. Department of Agriculture, Food and
Nutrition Service, 2007, School Nutrition Dietary
Assessment Study-III, Vol. I by Mathematica Policy
Research, Inc., (SNDA–III), pp. 73–77, 86–89.
25 Unpublished ERS analysis of SNDA–III data.
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mobility privileges increase with grade
level.26 These factors are not necessarily
associated with school or SFA size.
The most important source of competitive
`
food revenue is a la carte sales. Sales from
vending machines are less common,
accounting for only about five percent of all
competitive food sales. In general, small
schools are less likely than larger schools to
have vending machines accessible to
students: just 36 percent of schools with
fewer than 500 students had vending
machines. That increases to 48 percent of
schools with 500 to 1,000 students and 78
percent of schools with more than 1,000
students.27
Federal Rules That May Duplicate, Overlap
or Conflict with the Proposed Rule: FNS is
unaware of any such Federal rules or laws.
Significant Alternatives: HHFKA requires
USDA to establish standards that are
consistent with the most recent Dietary
Guidelines for Americans (DGA) using
‘‘authoritative scientific recommendations’’
(HHFKA section 208). The proposed rule
standards reflect nutrition guidelines set
forth in the 2010 DGA, by the National
Academies’ Institute of Medicine in Nutrition
Standards for Foods in Schools (2007),
standards already adopted by States and
localities, and standards identified by other
organizations.
The proposed rule reflects a considered
balance among these guidelines. It is possible
to derive an alternative, however, that would
require fewer changes to allowed competitive
foods. While different standards might
reduce the cost of the rule for some regulated
parties, there is little evidence that the
economic costs of the rule fall
disproportionately on the smallest SFAs,
schools, or other school groups within these
schools. A rule less closely aligned with DGA
and other scientific recommendations would
not provide particular relief to these small
entities, but may result in fewer
improvements to the school nutrition
environment and children’s health.
USDA also considered a separate
implementation schedule for small entities.28
This may offer smaller schools and
businesses more time to adjust to the new
requirements. But because the majority of
`
competitive food revenues come from a la
`
carte sales, and because a la carte foods will
be subject to the new school meal pattern
`
requirements, many a la carte foods will
already meet healthier food standards when
the proposed competitive food rule becomes
effective. While vending machines are not
subject to the meal pattern standards, they
are more commonly found in large schools:
over three quarters of schools with more than
1,000 students have vending machines as
compared to a third of schools with fewer
than 500 students.29 FNS determined,
therefore, that the potential benefit of
deferring implementation for smaller schools
would not outweigh the potentially adverse
26 Ibid.,
p. 78.
p. 88.
28 A more permissive compliance schedule for
small entities is one of the alternative cited in SBA,
‘‘A Guide for Government Agencies,’’ p. 35.
29 SNDA–III., p. 88.
27 Ibid.,
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impact of deferring important improvements
to the school nutrition environment for all
children.
Regulatory Impact Analysis
Agency: Food and Nutrition Service,
USDA.
Title: Nutrition Standards for All Foods
Sold In School.
Nature of Action: Proposed Rule.
Need for Action: Section 208 of the
Healthy, Hunger-Free Kids Act of 2010
requires the U.S. Department of Agriculture
(USDA) to establish science-based nutrition
standards for all foods sold in schools during
the school day. The standards proposed in
this rule are intended to help ensure that all
foods sold at school—whether provided as
part of a school meal or sold in competition
with such meals—are aligned with the latest
and best dietary recommendations. They will
work in concert with recent improvements in
school meals to support and promote diets
that contribute to students’ long-term health
and well-being. And they will support efforts
of parents to promote healthy choices for
children, at home and at school.
Affected Parties: All parties involved in the
operation and administration of programs
authorized under the National School Lunch
Act or the Child Nutrition Act that operate
on the school campus during the school day.
These include State education agencies, local
school food authorities, local educational
agencies, schools, students, and the food
production, distribution, and service
industry.
Abbreviations:
DGA Dietary Guidelines for Americans
FDA Food and Drug Administration
FMNV Foods of Minimal Nutritional Value
FY Fiscal Year
HHFKA Healthy, Hunger-Free Kids Act
IOM Institute of Medicine
NSLP National School Lunch Program
SBP School Breakfast Program
SFA School Food Authority
SLBCS–II School Lunch and Breakfast Cost
Study II
SNDA–III School Nutrition Dietary
Assessment III
SY School Year
USDA United States Department of
Agriculture
Contents
I. Introduction
A. Overview
B. Background
C. Baseline
D. Previous Recommendations and
Existing Standards
1. Institute of Medicine Recommendations
2. Voluntary Standards
3. Competitive Food Standards in Five
Largest States
II. Development of Federal Standards
III. Cost—Benefit Analysis
A. Existing Research on Revenue Effects
B. Estimating School Revenue Changes
C. Impacts on Participating Children and
Families
D. Administrative Costs
E. Industry Effects
F. Distributional Effects
1. Grade Level
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2. Low Income Students
G. Benefits
H. Limitations and Uncertainties
1. Limitations in Available Research
2. Prices of Competitive Foods
3. State and Local Support of Reimbursable
Meals
4. Student Response to New Standards
5. Industry Response
6. SFA and School Compliance
7. School Participation in the NSLP
8. Food and Labor Costs
IV. Alternatives
A. Full Implementation of IOM
Recommendations
B. Less Comprehensive Standards
C. Exemption for Reimbursable Meal
´
Entrees and Side Dishes
D. School-sponsored Fundraisers
E. Total Sugar
F. Naturally Occurring Ingredients and
Fortification
G. Allowable Beverage Sizes in High
School
H. Low Calorie Beverages
I. Caffeinated Beverages
V. Accounting Statement
VI. References
I. Introduction
A. Overview
There has been increasing public interest
in the rising prevalence of overweight and
obesity in the United States, particularly
among children. The school nutrition
environment is a significant influence on
children’s health and well-being. Recent
studies have shown that children typically
consume between 26 and 35 percent of their
total daily calories at school, and as much as
50 percent for children who participate in
both school lunch and breakfast programs
(Fox 2010; Guthrie, et al., 2009).
In response to these concerns, the Healthy
Hunger-Free Kids Act (HHFKA) of 2010
required USDA to establish science-based
nutrition standards for all foods sold in
schools during the school day. The standards
proposed here are intended to help ensure
that all foods sold at school—whether
provided as part of a school meal or sold in
competition with such meals—are aligned
with the latest and best dietary
recommendations.
The proposed competitive food standards
will work in concert with recent
improvements in school meals to support
and promote diets that contribute to students’
long-term health and well-being. Congress
highlighted the relationship between school
meal improvements and standards for other
school foods, noting that the prevalence of
‘‘unhealthy [competitive] foods in our
schools not only undermines children’s
health but also undermines annual taxpayer
investments of over $15.5 billion in the
National School Lunch and School Breakfast
Programs’’ (Senate Report 111–178, p. 8).
The benefits sought through this
rulemaking focus on improving the food
choices that children make during the school
day. A growing body of evidence tells us that
giving school children healthful food options
will help improve these choices. A recent,
comprehensive, and groundbreaking
assessment of the evidence by the Pew
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Health Group and Robert Wood Johnson
Foundation concluded that:
• A national competitive foods policy
would increase student exposure to healthier
foods and decrease exposure to less healthy
foods, and
• Increased access to a mix of healthier
food options is likely to change the mix of
foods that students purchase and consume at
school, for the better.
Researchers for Healthy Eating Research
and Bridging the Gap, Robert Wood Johnson
Foundation-sponsored research programs
examining environmental influences on
youth diets and obesity, have concluded that
strong policies that prohibit or restrict the
sale of unhealthy competitive foods and
drinks in schools improve children’s diets
and reduce their risk for obesity.
Because setting national standards will
change the range of food products sold in
schools, they may affect the revenues schools
earn from these foods, as well as
participation in school meals. The evidence
on the overall impact of competitive food
standards on school revenues is mixed.
However, a number of schools implementing
such standards have reported little change,
and some increases, in net revenues.
B. Background
Children generally have two options for
school food purchases: (1) Foods provided
under the National School Lunch Program
(NSLP), the School Breakfast Program (SBP),
or other child nutrition programs authorized
under the National School Lunch Act or the
Child Nutrition Act, and (2) competitive
`
foods purchased a la carte in school
cafeterias or from vending machines at
school. NSLP is available to over 50 million
children each school day; an average of 31.8
million children per day ate a reimbursable
lunch in fiscal year (FY) 2011. Additional
children are served by the Child and Adult
Care Food and the Summer Food Service
Programs that operate from NSLP and SBP
participating schools. While meals served
through these programs are required to meet
nutritional standards based on the most
recent Dietary Guidelines for Americans
(DGA), competitive foods are subject to far
fewer Federal dietary standards. Existing
regulations address only the place and timing
of sales of foods of minimal nutritional value
(FMNV).30
The sale of food in competition with
Federal reimbursable program meals and
snacks is widespread. In school year (SY)
2004–2005, 82 percent of all schools—and 92
percent of middle and high schools—offered
`
a la carte foods at lunch. Vending machines
were available in 52 percent of all schools,
and 26 percent of elementary schools, 87
percent of middle schools, and 98 percent of
high schools (Gordon, et al., 2007; Volume 1,
pp. 102–114).31 Revenues from competitive
30 FMNV include carbonated beverages, water
ices, chewing gum, hard candy, jellies and gums,
marshmallow candies, fondant, licorice, spun
candy, and candy-coated popcorn. The current
policy restricts the sales of FMNV during meal
service in food service areas. See 7 CRF 210.11.
31 SNDA–III found the top five most commonly
`
offered a la carte lunch items were milk, juice and
water, snacks, baked goods, and mixed dishes (for
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foods, however, are far smaller than revenues
from USDA-funded school meals. In SY
2005–2006, approximately 84 percent of
school food authority (SFA) revenue was
derived from reimbursable school meals,
from a combination of USDA subsidies, State
and local funds, and student meal payments.
The remaining 16 percent was derived from
non-reimbursable food sales (USDA 2008, p.
xii). Half of secondary school students
consume at least one snack food per day at
school, an average of 273 to 336 calories per
day. This amount is significant considering
that an excess of 110 to 165 calories per day
may be responsible for rising rates of
childhood obesity (Fox et al 2009, Wang et
al 2006, cited in Pew Health Group, 2012).
Many observers, including parents and
military leaders, have expressed concerns
about the competitive foods available to
children at school (Gordon, et al., 2007;
Christeson, Taggart, and Messner-Zidell,
2010; Christeson, et al., 2012). In response, a
number of States have implemented
competitive food standards. In 2004, GAO
reported that 21 States had created standards
that went beyond existing Federal standards.
In 2010, the School Nutrition Association
reported that the number of States with
competitive food policies had increased to
36.32 33 34 More recently, the Centers for
Disease Control and Prevention (CDC)
reported that 39 States had established
competitive food policies as of October 2010;
in two of those States, legislation had
recently passed to require competitive food
standards, but neither State had yet defined
specific standards.35 A 2012 study conducted
for FNS found that at least half of States had
competitive food standards for foods sold in
`
vending machines, a la carte, school stores,
example, salads, pizza, etc.). For vending machines,
the top five most commonly offered items included
juice and water, other beverages (for example,
carbonated and energy drinks, coffee and tea, etc.)
snacks, baked goods, and bread or grain products.
32 GAO–04–673. April 2004. The GAO identified
23 States, but 2 of the 23 had only created
committees to assess competitive food issues. The
report considered both timing of competitive foods
sales and the types of products offered. In terms of
timing, of the 21 States with competitive food
policies, 14 limited access to competitive foods at
times associated with meal periods, 5 limited
competitive food sales during the entire school day,
and 2 States varied the standards by the type of
school. In terms of the types of foods, 6 of the 21
States limited access to all competitive foods, 8
limited access only to FMNV, and 7 States limited
selected competitive foods. Seventeen of the States
limited access at all grade levels, while the
remaining 4 States had policies that applied only
to selected schools. GAO also found that within
States, individual schools and districts had policies
that were stricter than the State standards.
33 A recent study by Taber, et al. (2011), takes a
broad look at State competitive food standards,
utilizing CDC data to estimate effects of State policy
changes between 2000 and 2006.
34 Similar to the GAO report, a report from the
School Nutrition Association (SNA) indicates 23
States had competitive food policies on or before
2004. There is at least one difference among the
States identified by GAO and those identified by
SNA, but it is not clear how many other
discrepancies may exist.
35 CDC included State laws, regulations, and
policies enacted or passed since October 2010. We
use the term policy to generically refer to all three.
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and snack bars, and almost half had nutrition
standards for foods sold in bake sales
(Westat, 2012, p., 5–25).
The Pew Health Group and Robert Wood
Johnson Foundation recently reviewed data
on the types of snack foods and beverages
sold in secondary schools via vending
machines, school stores, and snack bars.36
The data were extracted from a biennial
assessment from the CDC that uses surveys
of principals and health education teachers
to measure policies and practices across the
nation. Key findings show:
• The availability of snack foods in
secondary schools varies tremendously from
state to state. This variation is likely the
result of a disparate patchwork of policies at
the state and local levels. Fewer than 5
percent of school districts have food and
beverage policies that meet or exceed the
2010 Dietary Guidelines for Americans.
• ‘‘Under this patchwork of policies, the
majority of our nation’s children live in states
where less healthy snack food choices are
readily available.’’
Overall, the availability of healthy snacks
such as fruits and vegetables is limited. The
vast majority of secondary schools in 49
states do not sell fruits and vegetables in
snack food venues (Pew Health Group, 2012).
C. Baseline Competitive Food Revenue
As shown in Table 1, we estimate that
overall revenue in SFAs will be about $34
billion to $36 billion each fiscal year between
2015 and 2018. Overall revenue includes the
value of Federal reimbursements for NSLP
and SBP meals,37 student payments, and
State and local contributions. This estimate
is derived from the relationship between
Federal reimbursements and total SFA
revenue estimated in the School Lunch and
Breakfast Cost Study (SLBCS–II) (USDA
2008).
USDA’s most recent budget projections
forecasted a total of $16.0 billion in Federal
meal reimbursements in FY 2014, exclusive
of the effects of sections 205 and 206 of
HHFKA on Federal reimbursements and
competitive food revenue. We use findings
from the SLBCS–II about the relationship
between Federal meal reimbursements and
overall SFA revenue to derive an estimate of
$31.6 billion in SFA revenue in FY 2014, and
then adjust this upward for HHFKA
impacts 38 to a total of $33.5 billion in SFA
revenue in that year.
Our estimate of competitive food revenues
under current policies and practices also uses
36 ‘‘Out of Balance: A Look at Snack Foods in
Secondary Schools across the States,’’ The Pew
Health Group and the Robert Wood Johnson
Foundation (2012). The report examines data
contained in N. D. Brener et al., ‘‘School Health
Profiles 2010: Characteristics of Health Programs
Among Secondary Schools in Selected U.S. 21
Sites,’’ U.S. Department of Human Services, Centers
for Disease Control and Prevention (2011).
37 an estimate prepared for the FY 2013
President’s Budget.
38 The estimated increase in SFA revenues in
2014 from these provisions is $581 million for
reimbursable meals, and $1.3 billion for
competitive food revenue, for a total increase of
about $1.9 billion. See 76 Federal Register 35301–
35318, especially p. 35305.
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SLBCS–II,39 which showed that SFA
competitive food revenue accounted for 15.8
percent of overall SFA revenue prior to
HHFKA. For FY 2014, we begin with the
estimated $31.6 billion in SFA revenue that
excludes the effects of HHFKA on Federal
meal reimbursements and student payments
for program meals and competitive foods. For
FY 2014, that implies baseline SFA
competitive food revenues of $5.0 billion.40
We add an estimated $1.3 billion increase in
competitive food revenue from HHFKA
Section 206 to get an adjusted $6.3 billion in
SFA competitive food revenue.
To estimate the proportions of these
`
revenues generated by a la carte sales and
vending machines, we use SNDA–III data to
show that about 98.3 percent of SFA
competitive food revenue was generated by
`
sales of a la carte foods; virtually all of the
rest, 1.7 percent, was generated by vending
machine sales.
Data from SNDA–III indicate that 95
percent of competitive food revenue accrues
to SFA accounts; just five percent of
competitive food revenue accrues to non-SFA
student, parent and other school group
accounts.41 Our estimate of competitive food
revenue generated by these groups in the last
three months of FY 2014 is $40 million.42 If
none of the competitive food revenue raised
`
by non-SFA school groups comes from a la
`
carte, then a la carte sales accounted for
roughly 93 percent (= 0.98 × 0.95) of total
SFA and non-SFA competitive food revenue
in SY 2004–2005.
We inflate these full-year figures for 2015
through 2018 based on the assumptions in
the President’s Budget. Because this analysis
assumes that the rule will take effect in July
2014, the start of SY 2014–2015, we reduce
the FY 2014 figures in Table 1 to include
only the last three months of the fiscal year—
about 15 percent of the full-year figures.43
TABLE 1—BASELINE COMPETITIVE FOOD AND OVERALL SFA REVENUE
Fiscal year (millions)
2014
Baseline SFA revenue (all sources) ........
Baseline competitive food revenue ..........
SFA revenue ............................................
`
a la carte ...........................................
vending and other sources ...............
Other school group revenue ....................
`
a la carte ...........................................
vending and other sources ...............
2015
$5,062
993
954
937
16
40
0
40
2016
$34,045
6,758
6,492
6,382
110
266
0
266
$34,694
6,921
6,651
6,538
113
270
0
270
2017
$35,350
7,102
6,828
6,712
116
274
0
274
2018
$36,451
7,296
7,013
6,894
119
283
0
283
Total
$145,601
29,070
27,938
27,463
475
1,132
0
1,132
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Other school groups generate their
competitive food revenue from periodic
fundraisers, vending machines, snack bars,
and school stores. These groups include
student clubs, parent teacher organizations,
or parent organizations supporting sports,
music, and other enrichment activities. Much
of the non-SFA competitive food revenue is
controlled by school principals for special
school events, sports, or general fundraising.
Given the implementation of Section 206
and significant State and local school food
initiatives adopted since SY 2004–2005, our
baseline estimate of competitive food
revenue generated by other school groups is
highly uncertain. We encourage reviewers of
this proposed rule to offer additional
information that might improve these
estimates through the regulatory comment
process.
D. Previous Recommendations and Existing
Standards
In 2005, Congress directed CDC to
commission the Institute of Medicine (IOM)
to develop a set of nutrition standards for
competitive school foods (House Report 108–
792). Nutrition Standards for Foods in
Schools: Leading the Way toward Healthier
Youth set forth its recommendations for
nutrient and other standards. The committee
first identified a set of guiding principles,
recognizing that:
a. The present and future health and wellbeing of school-age children are profoundly
affected by dietary intake and the
maintenance of a healthy weight.
b. Schools contribute to current and
lifelong health and dietary patterns and are
uniquely positioned to model and reinforce
healthful eating behaviors in partnership
with parents, teachers, and the broader
community.
c. Because * * * foods and beverages
available on the school campus represent
significant caloric intake, they should be
designed to meet nutrition standards.
d. Foods and beverages have health effects
beyond those related to vitamins, minerals,
and other known individual components.
e. Implementation of nutrition standards
for foods and beverages offered in schools
will likely require clear policies; technical
and financial support; a monitoring,
enforcement, and evaluation program; and
new food and beverage products (IOM,
2007a, p. 3).
The committee then identified its
intentions:
39 For purposes of this analysis we assume that
the revenue generated from competitive food sales
has increased at the same rate as the growth in SFA
revenue from reimbursable paid lunches. For years
after FY 2010, we assume that baseline competitive
food revenue will increase at the same rate as the
projected increase in SFA revenue from
reimbursable paid lunches contained in the FY
2013 President’s Budget.
40 $31.6 billion × 15.8% = $5.0 billion.
41 ERS analysis of unpublished data from the
third School Nutrition Dietary Assessment Study
(SNDA–III). Note that SNDA–III may underestimate
other school group revenues to the extent that these
groups share in revenue from school stores that sell
food or engage in separate fundraising events.
SNDA–III reports that 44 percent of schools allow
student group fundraisers, but 75 percent of those
schools tend to hold them less than once per week.
Just 14 percent of schools operated snack bars or
school stores that might generate revenue for nonSFA school groups. For this reason, we believe that
our estimates capture the larger share of revenue
raised by these groups. According to SNDA–III’s
principals’ surveys, 44 percent of schools sold
competitive foods in vending machines and through
periodic fundraisers in SY 2004–2005. Just 11
percent of schools sold competitive foods in school
stores, and just 3 percent sold competitive foods in
school snack bars. See Gordon, et al., 2007, vol. 1,
pp. 77–79.
42 Because other school groups do not generate
`
revenue from a la carte sales, we start with the SFA
competitive food revenue excluding our estimate of
the SFA competitive food revenue increase from
`
HHFKA, which is almost entirely from a la carte
sales. Our FY 2014 competitive food baseline for
other school groups is therefore: [($31.6 billion ×
15.8 percent) ÷ 0.95] × .05 = $263 million. The part
year effect for the last three months of FY 2014
reduces that to $40 million.
43 The FY 2014 figures in Table 1 are just 15.1
percent of our full year FY 2014 estimates. 15.1
percent is the ratio of paid reimbursable lunches
served from July through September 2011 to the
number of paid reimbursable lunches served from
October 2010 through September 2011. We use paid
reimbursable lunches, rather than total lunches or
total Federal reimbursements, as the best proxy
(among available administrative data) for the share
of competitive foods purchased in the first three
months of the fiscal year. An unpublished ERS
analysis of SNDA–III data found that schools with
the greatest share of children eligible for paid meals
generate far more competitive food revenue than
schools with higher percentages of free or reducedprice eligible children. For SFA revenue, the figure
in Table 1 is equal to $33.6 billion × 15.1 percent,
or $5.1 billion.
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Although HHFKA established Federal
authority for comprehensive nutrition
standards for all foods in school, efforts to
define and implement such standards have
been underway for a number of years. Our
analysis briefly describes these activities to
provide additional context for the proposed
rule.
1. Institute of Medicine Recommendations
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• The federally reimbursable school
nutrition programs will be the primary
source of foods and beverages offered at
school.
• All foods and beverages offered on the
school campus will contribute to an overall
healthful eating environment.
• Nutrition standards will be established
for foods and beverages offered outside the
federally reimbursable school nutrition
programs.
• The recommended nutrition standards
will be based on the Dietary Guidelines for
Americans, with consideration given to other
relevant science-based resources.
• The nutrition standards will apply to
foods and beverages offered to all school-age
children (generally ages 4 through 18 years)
with consideration given to the
developmental differences between children
in elementary, middle, and high schools
(IOM, 2007a, p. 3).
Finally, the Committee recommended a
two-tier system: Tier 1 consisting of foods
and beverages to be encouraged and Tier 2
consisting of snack foods that do not meet
Tier 1 criteria but still meet the
recommendations for fats, sugars, and
sodium set forth in the DGA.
`
Under the IOM recommendation, a la carte
´
entrees would be required to be on the NSLP
menu and meet Tier 1 criteria with two
exceptions: the amount of allowed sodium
would increase from 200 milligrams (mg) to
no more than 480 mg, and the 200 calorie
limit imposed on Tier 1 foods would not
`
´
apply; a la carte entrees would have to meet
the calorie content of comparable NSLP
´
entree items.
2. Voluntary Standards
USDA’s HealthierUS School Challenge
(HUSSC), and the Alliance for a Healthier
Generation’s Healthy Schools Program offer
two models of voluntary standards adopted
by many schools across the country.
HUSSC began in 2004 as a way to promote
healthier school environments through
nutrition and physical activity, with four
award levels: bronze, silver, gold, and gold of
distinction. HUSSC includes standards for
competitive foods that are similar to the
standards in the proposed rule. At all award
levels, competitive foods and beverages must
meet the following standards:
• No more than 35% of calories from total
fat (excluding nuts, seeds, nut butters and
reduced-fat cheese),
• Less than 0.5 grams (g) trans fats per
serving,44
• No more than 10% saturated fat
(reduced-fat cheese is exempt),
• Total sugar must be at or below 35% by
weight (includes naturally occurring and
added sugars. Fruits, vegetables, and milk are
exempt),
• Portion sizes may not exceed the serving
size of the food served in school meals and
other competitive foods may not exceed 200
calories as packaged.
• Only low-fat or fat-free milk and USDA
approved alternative dairy beverages may be
offered,
44 Current rules allow manufacturers to report a
product has ‘‘zero grams’’ of trans fat as long as
there are less than 0.5 g trans fat per serving. See
21 CFR Part 101.62.
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• Milk serving size is limited to 8-fluid
ounces,
• Fruit and vegetable juices must be 100%
full strength with no sweeteners or nonnutritive sweeteners, and
• Water that is non-flavored, nonsweetened, non-carbonated, non-caffeinated,
without non-nutritive sweeteners is allowed.
• For bronze and silver awards,
competitive food standards apply to foods
sold in the meal service area during meal
periods.
• For gold and gold of distinction awards,
competitive food standards apply anywhere
in the school and at any time during the
school day.
• For bronze, silver, and gold awards,
sodium cannot exceed 480 mg for snack
´
foods or 600 mg for entrees.
• For gold of distinction awards, sodium
cannot exceed 200 mg for snack foods or 480
´
mg for entrees.
As of January 2013, almost 5,000 schools
in 49 States and the District of Columbia
were certified HUSSC schools, and all of
these schools, regardless of award level, have
already moved at least part way to the
proposed competitive food standards.45
Schools that are a part of the Alliance for
a Healthier Generation’s Healthy Schools
Program voluntarily adopt competitive food
standards that require:
• No more than 35 percent of calories from
total fat,
• No more than 10 percent of calories from
saturated fat,
• 0 g trans fat, and
• No more than 480 mg sodium.
The Alliance for a Healthier Generation
also recommends schools serve whole grain
products; fresh, canned, or frozen fruit (in
fruit juice or light syrup); and non-fried
vegetables. The more than 14,000 schools
currently participating in the Alliance for a
Healthier Generation Healthy Schools
Program have also moved towards the
standards in the proposed rule.46
3. Competitive Food Standards in Five
Largest States
The five States with the largest numbers of
students enrolled in NSLP-participating
schools are California, Florida, Illinois, New
York, and Texas. These States account for 37
percent of all students enrolled nationally in
NSLP participating schools (18.7 million
students). All five of these States have had
school competitive food policies since 2004
or earlier. School districts in these States
have already confronted some of the
challenges of transitioning students toward
improved competitive foods and have dealt
with the consequences of any changes in
overall revenues.
In California, elementary children may
purchase only milk (2% or less), fruit or
vegetable juices that are at least 50 percent
juice with no added sweeteners, and water
45 FNS HealthierUS School Challenge at http://
www.fns.usda.gov/tn/healthierus/index.html. A
nutrition standards chart is available at http://
www.fns.usda.gov/tn/healthierus/award_chart.pdf.
46 School participation numbers are from the
Healthy School Program, Alliance for a Healthier
Generation Web site. http://
www.healthiergeneration.org/schools.aspx.
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with no added sweeteners. Generally, foods
must not have more than 35 percent of
calories from fat, 10 percent of calories from
saturated fat, and 0 calories from trans fat,
and no more than 35 percent sugar by weight.
Nuts, nut butters, seeds, eggs, cheese
packaged for individual sale, fruit, vegetables
that have not been deep fried, and legumes
are also allowed for purchase. These
standards apply regardless of the time of day.
Middle and high school children may
purchase water, milk (2% or less), fruit and
vegetable drinks that are at least 50 percent
juice, and electrolyte replacement beverages
with no more than 2.1 g of added sweetener
per one fluid ounce. They may also purchase
`
food items a la carte as long as the foods have
´
no more than 400 calories per entree and no
more than four g of fat per 100 calories.
´
Entrees from NSLP meals are also allowed.
These standards are in place from 30 minutes
before the school day through 30 minutes
after the school day (CSPI, 2007).
Florida does not allow any competitive
food sales on elementary school campuses
during the day and does not allow
competitive foods from vending, school
stores, and other food sales in secondary
schools until an hour after the last lunch
period. Carbonated beverages are allowed if
100 percent fruit juices are also available
where those beverages are sold (CSPI, 2007).
Illinois policy on competitive foods applies
only to grades eight and below, for foods sold
during the school day, with the exception of
foods that are sold as part of a reimbursable
meal or sold within the food service area.
Allowable beverages include water, milk,
fruit and vegetable drinks that are at least 50
percent fruit juice and yogurt or ice-based
smoothie drinks with fewer than 400 calories
that are made with fresh or frozen fruit or
fruit drinks containing at least 50 percent
fruit juice.
Foods that are allowed to be sold outside
food service areas or within food service
areas other than during meal service must
have no more than 35 percent of calories
from fat and 10 percent of calories from
saturated fat, no more than 35 percent sugar
by weight, and may not contain more than
200 calories per serving. Nuts, seeds, nut
butters, eggs, cheese packaged for individual
sale, fruits or non-fried vegetables, or lowfat
yogurt products are also allowed (CSPI,
2007).
New York State broadly restricts the sales
of FMNV and ‘‘all other candy’’ from the
beginning of the school day through the end
of the last scheduled meal period. New
York’s State Education Department, however,
allows competitive food standards to be set
at the district level (DiNapoli, 2009), and
New York City, for example, has adopted
standards that are much more rigorous than
the State-level standards.
Competitive food sales standards within
New York City schools apply to food sales
from the beginning of the school day through
6 p.m. weekdays. Students can sell New York
State Department of Education approved
foods in schools any time during the day, as
long as the sale occurs outside of the school
cafeteria. PTAs can hold a monthly
fundraiser during the day with non-approved
food items as long as the sale occurs outside
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the cafeteria and complies with standards set
in the Chancellor’s Regulations. Allowed
beverages include water or low-calorie drinks
without artificial flavors or colors, at 10
calories per eight ounces for elementary and
middle schools and 25 calories per eight
ounces in high schools. Lowfat (1%) and fat
free milk are also allowed.
Snack vending machines are not permitted
in schools with students in pre-kindergarten
through fifth grade. For students above grade
five, competitive foods must have no more
than 35 percent of calories from fat (nuts and
nut butters are exempt), less than 10 percent
of calories from saturated fat, and 0.5 g or
less of trans fat; no more than 35 percent of
calories from sugar (fruit products with no
added sugar are exempt), less than 200 total
calories, may not exceed 200 mg sodium, and
grain-based products must contain at least
two grams of fiber per serving (New York
City, 2010).47
Texas State policy does not allow the sale
of FMNV or any food or beverage that is not
provided by school food service on
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48 Florida is not included in this summary table
because it does not identify nutrient standards.
Instead, it bans competitive food sales on
elementary school campuses during the school day
and does not allow competitive foods from vending,
school stores, and other food sales in secondary
schools until an hour after the last lunch period.
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elementary school campuses until after the
end of the last scheduled class period (CSPI,
2007). Allowed beverages include milk (2%
or less), water, and 100 percent vegetable or
fruit juices. For middle schools, FMNV,
candy, and carbonated beverages sales are
not permitted until the last scheduled class.
Twelve ounce containers of beverages, other
than milk and FMNV, with no more than 30
g sugar per eight ounces are allowed. These
beverages might include sports and fruit
drinks and sweetened ice teas.
At the high school level, FMNV may be
sold only after the last scheduled class.
Sugared and carbonated beverages of no more
than 12 ounces may be offered, but only 15
percent of vending machine slots or service
points may be devoted to these beverages. In
all grades, individual food items may not
contain more than 23 g of fat per serving,
with the exception that once per week one
food with 28 g (1 ounce) of fat per serving
is allowed.
Schools must eliminate deep-fat frying as
a method of on-site preparation for foods
served as part of reimbursable school meals,
`
a la carte, snack lines, and competitive foods.
Servings of potatoes may not exceed three
ounces, may be offered no more than once
per week, and students may only purchase
one serving at a time. Baked potato products
(wedges, slices, whole, new potatoes) that are
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produced from raw potatoes and have not
been pre-fried, flash-fried or par-fried in any
way may be served without restriction. Fruit
and/or vegetables must be offered daily on all
points of service (CSPI, 2007).
While none of these States have policies
that match all of the standards in the
proposed rule, California, Illinois, and New
York City meet several: California meets or
exceeds the proposed standards for calories;
total, saturated, and trans fats; and sugar.
Illinois meets proposed standards for
calories, total and saturated fat, and sugar.
New York City meets proposed standards for
total, saturated, and trans fats, sodium, and
sugar. On the other end of the spectrum,
Texas only provides a standard for total fat
(though it is more restrictive than the
proposed rule), and Florida does not set
specific nutrient standards.
Table 2 provides a summary description of
a number of existing sets of nutrition
standards that are in already in place. These
include two voluntary programs: USDA’s
HealthierUS Schools Challenge and the
Alliance for a Healthier Generation’s Healthy
Schools Program. We have also outlined the
standards in effect in four of the five States
with the largest numbers of students enrolled
in NSLP-participating schools.48
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II. Development of Federal Standards
Section 208 of the HHFKA, requires USDA
to establish science-based nutrition standards
for all foods and beverages sold on school
campuses during the school day. These
standards must be consistent with the most
recent DGA and authoritative scientific
recommendations (HHFKA, 2010, p. 98). The
proposed rule addresses all competitive
foods and beverages sold on campuses
throughout the school day. It is guided by the
same principles that underlie the 2007 IOM
recommendations. At the same time, in
48 Florida is not included in this summary table
because it does not identify nutrient standards.
Instead, it bans competitive food sales on
elementary school campuses during the school day
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developing the rule FNS reviewed existing
currently implemented State and local school
nutrition and voluntary standards to promote
practicality and ease of implementation.
The proposed rule improves the
competitive food options available to
students by replacing less healthy items with
´
appropriately sized entrees, side dishes, and
snacks that emphasize foods from the food
groups that are the basis of a healthy diet,
consistent with the DGA. In this way, the
rule is designed to help ensure the success
of school meal standards introduced in July
2012. However, the rule does not prescribe a
specific set of competitive foods, nor does it
establish targets for particular food groups.
Instead, the proposed rule puts students in a
position to make their own healthy choices,
and encourages the development of healthy
habits for life.
The proposed rule establishes guidelines
for all foods sold outside of school meal
programs on the school campus at any time
during the school day. The school day for
purposes of this rule extends from midnight
to 30 minutes past the end of the official
school day. The school campus includes all
areas under jurisdiction of the school that are
accessible to students.
and does not allow competitive foods from vending,
school stores, and other food sales in secondary
schools until an hour after the last lunch period.
49 Many of the standards provide exemptions for
nuts, nut butters, seeds, and fruits, etc. Those
exemptions are not shown in the table.
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• Schools may allow the sale of food that
does not meet proposed rule standards for
school-sponsored fundraisers at a frequency
to be determined with the help of public
comments on the proposed rule. Exempted
fundraiser foods may not be sold in
competition with school meals.
´
• NSLP/SBP entrees and side dishes sold
`
a la carte, with the exception of grain-based
desserts which must always meet all
nutrition standards, will be exempt from
proposed rule standards subject to one of two
alternatives. Alternative A1 would allow
NSLP/SBP menu items that meet the
proposed fat and sugar standards to be sold
`
a la carte at any time. Alternative A2 would
´
exempt NSLP/SBP entrees and side dishes
from all standards if sold during menu
cycles, with two alternate limitations (B1–
B2)—that they can only be sold 1) on the day
that they are served as part of a meal, or 2)
within four operating days of the day they are
served. USDA invites comments on these
alternative standards.
Competitive foods must meet all the
proposed nutrient standards, and must:
• Contain 50 percent or more whole grains
or have whole grains as the first ingredient
or be one of the non-grain main food groups
as defined by the 2010 DGA: Fruit, vegetable,
dairy product, protein foods (meat, beans,
poultry, seafood, eggs, nuts, seeds, etc.); or
• Contain 10 percent of the daily value of
a naturally occurring nutrient of public
health concern from the DGA (e.g., calcium,
potassium, vitamin D or dietary fiber), or
• Be a combination food that contains a
half serving (1⁄4 cup) of a fruit or vegetable.
If water is the food’s first ingredient, the
second ingredient must satisfy the standard
above.
• Fresh, canned, and frozen fruits or
vegetables with no added ingredients except
water, or in the case of fruit, packed in 100
percent juice or extra light syrup, are exempt
from the proposed rule’s nutrient standards.
• Competitive foods must contain 35
percent or less of total calories from fat per
portion as packaged. Exceptions from these
fat standards are granted for reduced fat
cheese, nuts, seeds, nut or seed butters,
products consisting of only dried fruit with
nuts and/or seeds with no added nutritive
sweeteners or fat, seafood with no added fat.
• Competitive foods must contain no more
than 10 percent of total calories from
saturated fat, with the exception of reduced
fat cheese.
• Competitive foods must have 0 g of trans
fat.
• Sodium content in snacks is limited to
200 mg per portion as packaged for nonNSLP/SBP snack items. Non-NSLP/SBP
´
entree items must have no more than 480 mg
of sodium per portion.
• Two alternative sugar standards are
provided for comment. The first would limit
total sugar to 35 percent of calories. The
second would limit total sugar to 35 percent
of weight. Under both alternatives,
exceptions are provided for fresh, frozen, and
canned fruits or vegetables with no added
sweeteners except for fruits packed in 100
percent juice or extra light syrup, and dried
whole fruits or vegetables, dried whole fruit
or vegetable pieces, and dried dehydrated
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fruits or vegetables with no added nutritive
sweeteners. Lowfat or nonfat yogurt with less
than 30 g of sugar for eight ounces is also
permitted.
• In general, competitive foods shall have
no more than 200 calories per portion as
packaged including accompaniments such as
butter, cream cheese, salad dressing, etc. for
`
snack items and side dishes sold a la carte.
´
`
Entree items sold a la carte shall contain no
more than 350 calories.
• Accompaniments should be preportioned and must be included in the
nutrient profile as a part of the item served
and meet all the proposed standards.
• Elementary and middle school foods and
beverages must be caffeine free with the
exception of naturally occurring trace
amounts.
• Allowable beverages for elementary
students are limited to plain water, low fat
milk, nonfat milk (including flavored),
nutritionally equivalent milk alternatives (as
permitted by the school meal requirements),
and 100 percent fruit or vegetable juices. All
beverages must be no more than eight ounces
with the exception of water, which is
unlimited.
• Allowable beverages for middle school
students are limited to plain water, low fat
milk, nonfat milk (including flavored),
nutritionally equivalent milk alternatives (as
permitted by the school meal requirements),
and 100 percent fruit or vegetable juice. All
beverages must be no more than 12 ounces,
with the exception of water (which is
unlimited).
• Allowable beverages for high school
students are limited to plain water, lowfat
milk, nonfat milk (including flavored),
nutritionally equivalent milk alternatives (as
permitted by the school meal requirements),
and 100 percent fruit or vegetable juice. Milk
and milk equivalent alternatives and fruit or
vegetable juice must be no more than 12
ounces. Calorie-free, flavored and/or
unflavored carbonated water and other
calorie free beverages that comply with the
FDA standard of less than five calories per
serving must be no more than 20 ounces.
• Two alternative standards for low calorie
beverages for high school students are
provided for comment. The first alternative
would allow beverages of up to 40 calories
per 8 fl oz serving (or 60 calories per 12 fl
oz). The second would allow up to 50
calories per 8 fl oz (or 75 calories per 12 fl
oz). Both alternatives limit serving sizes to 12
fluid ounces or less. Beverages containing
caffeine are permitted at times other than at
meal service. There is no ounce restriction on
water.
III. Cost-Benefit Analysis
The proposed rule requires schools to
improve the nutritional quality of foods
offered for sale to students outside of the
Federal school lunch and school breakfast
programs. Changing the mix of competitive
foods offered by schools will likely change
student expenditures on those foods, with
potential implications for school food service
revenues. It may also change the extent to
which students purchase reimbursable
school meals, resulting in changes in
amounts transferred from USDA to SFAs and
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from students to SFAs for reduced price and
paid meals.
This analysis examines a range of possible
responses of students and schools, and
resulting changes in school revenue, based
on the experience of States, school districts,
and schools with similar standards. While
evidence on the overall impact of
competitive food standards on school
revenues is mixed, a number of schools
implementing such standards have reported
little change, and some have seen increases,
in net revenues. Our analysis illustrates a
range of possible revenue impacts, all of
which are relatively small (+0.4 percent to
¥0.7 percent). By way of comparison, USDA
has previously estimated that the combined
effect of the other school food service
revenue provisions included in HHFKA are
expected to increase overall school food
revenue by roughly six percent.50 The
combined effect of that rule and this proposal
is a net increase in SFA revenue.
The key benefit sought through this
proposed rule is to improve the food choices
that children make during the school day. By
helping to ensure that all foods sold at
school—those provided as part of a school
meal or sold in competition with such
meals—are aligned with the latest and best
dietary recommendations, the rule should
also improve the mix of foods that students
purchase and consume at school.
In turn, though the complexity of factors
that influence overall food consumption and
obesity prevent us from defining a level of
dietary change or disease or cost reduction
that is attributable to the rule, there is
evidence that standards like those proposed
in the rule will positively influence—and
perhaps directly improve—eating patterns
that contribute to students’ long-term health
and well-being, and reduce their risk for
obesity.
A. Existing Research on Revenue Effects
If the proposed standards are finalized and
implemented, students who currently
purchase competitive foods will adjust their
behaviors in a number of ways in response.
Some students will accept the new
competitive food offerings. Some will not
and will turn instead to the Federal
reimbursable meals programs. Other students
will replace school food purchases with food
from home. And, where the option exists,
students may spend their competitive food
dollars off campus. Student responses, in
turn, will depend on the ability of schools,
food manufacturers, and the foodservice
industry to offer appealing choices.
It is instructive to begin with a review of
studies and evaluations of existing State and
local standards. While none of the existing
standards are fully aligned with the
provisions of the proposed rule, they offer
the best available insight into the likely
consequences of the proposed rule on school
revenues and costs.
A number of studies have looked at the
effects of implementation of nutrition
standards on school food service revenues in
a handful of States:
50 http://www.fns.usda.gov/cnd/Governance/
regulations/2011-06-17.pdf.
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• A series of studies examined California’s
Linking Education, Activity and Food (LEAF)
pilot program (Woodward-Lopez et al. 2005a;
Vargas et al 2005). Among 16 high schools
that received LEAF grants to implement
competitive food standards adopted by
California, 13 reported increases in total food
service revenues, usually through increased
reimbursable meal sales that offset a
`
concurrent decrease in a la carte sales. Net
income increased in three of the five sites
that provided data on expenditures, and fell
at the other two sites. It is not clear how
much of the observed effects are solely due
to the changes in competitive food standards
because the pilot schools received grants
ranging from about $200,000 to $740,000 for
a 21 month implementation period (Center
for Weight and Health, 2005).
• A related assessment of the impact of
California’s legislated nutrition standards
reports that 10 of 11 schools that reported
financial data experienced increases of more
than five percent in total food and beverage
revenue after implementation (WoodwardLopez et al. 2010). Among the five schools
that provide data for non-food service sales
of competitive foods and beverages, four
experienced a decrease in revenue of more
than five percent and one experience a
modest increase.
• An estimated 80 percent of surveyed
principals in West Virginia reported little or
no change in revenues after implementation
of a state policy requiring schools to offer
healthier beverages and restrict ‘‘junk foods’’
and soda (West Virginia University, 2009).
• Pilot projects in Connecticut and
Arizona report, in some cases, increased food
sales, increased meal participation, and no
significant change or loss in food service
revenue (Long, Henderson, and Schwartz,
2010; Arizona Healthy School Model Policy
Implementation Pilot Study, 2005).
• Green Bay, Wisconsin officials reported
that ‘‘[w]hen low-nutrient foods were
`
removed from a la carte lines and replaced
`
with healthful alternatives, daily a la carte
revenue decreased by an average of 18
percent. However, the decreased emphasis on
`
a la carte sales prompted a 15 percent
increase in school meal participation[!]. The
revenue generated by the additional school
`
meals more than doubled the lost a la carte
revenue. Therefore, bottom-line dollars for
school foodservice have increased overall’’
(USDA, et al., 2005, p. 98).
• South Carolina’s Richland One District
‘‘reported losing approximately $300,000 in
`
annual a la carte revenue after implementing
[competitive food] changes, [but] school
lunch participation and subsequent federal
reimbursements increased by approximately
$400,000 in the same year’’ (GAO 2005, p.
43).
• Wharton, Long, and Schwartz (2008)
reviewed ‘‘the few available’’ revenue-related
articles and studies focused on healthier
competitive food standards and determined
that the ‘‘* * * data suggest that most
schools do not experience any overall losses
in revenue’’ after implementing healthier
standards (p. 249).
• Most studies have assessed the impact of
nutrition policies in the immediate postimplementation period. A recent effort
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examined longer-term impacts. Comparing
revenue data over three years from 42 middle
schools in five States, half of which adopted
healthier competitive food standards,
˜
Trevino et al. (2012) found no difference and
concluded that providing healthier food
options is affordable and does not
compromise school food service finances.
The Pew Health Group addressed the issue
of revenue changes due to healthier
competitive foods in its recent Health Impact
Assessment (HIA). After analyzing the
relationship between State policies and
school-related finances, Pew researchers
concluded that:
[W]hen schools and districts adopted
strong nutrition standards for snack and a la
carte foods and beverages, they generally did
not experience a decrease in revenue overall.
In most instances, school food service
revenues increased due to higher
participation in school meal programs.
However, in some cases, school districts
experienced initial declines in revenue when
strengthening nutrition standards. The HIA
concluded that, over time, the negative
impact on revenue could be minimized—and
in some cases reversed—by implementing a
range of strategies (Pew HIA, p. 4).
Similarly, after reviewing the evidence, the
National Center for Chronic Disease
Prevention and Health Promotion at CDC
concluded that ‘‘[w]hile some schools report
an initial decrease in revenue after
implementing nutrition standards, a growing
body of evidence suggest that schools can
have strong nutrition standards and maintain
financial stability’’ (CDC, Implementing
Strong Nutrition Standards for Schools:
Financial Implications, p. 2).
While the existing research suggests that
any impact of competitive food standards is
likely to be relatively modest, there is
substantial variation in the experience and
results to date. The information available
indicates that many schools have
successfully introduced competitive food
reforms with little or no loss of revenue. In
some of those schools, losses from reduced
sales of competitive foods were fully offset by
increases in reimbursable meal revenue. In
other schools, students responded favorably
to the healthier options and competitive food
revenue increased or remained at previous
levels. But not all schools that adopted or
piloted competitive food standards fared as
well. These experiences vary so widely that
they do not support a meaningful
quantitative national estimate of the
proposal’s net impact on program costs and
revenues.
B. Estimating School Revenue Changes
To assess the impacts of the proposed rule
on school revenue, we reviewed the evidence
summarized above and identified three
scenarios for student behavior and estimated
the revenue changes that could result:
• Scenario 1: Relatively high student
acceptance of new competitive foods, thereby
allowing schools to maintain existing
competitive food sales.
• Scenario 2: Lower competitive food sales
with fully offsetting increases in school meal
participation.
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• Scenario 3: Lower competitive food sales
with partially offsetting increases in school
meal participation.
We assume that the percentage change in
NSLP participation (DL) following
implementation of competitive food
standards will be directly related to the
percent change in competitive food
purchases (DCF), since a portion of
competitive food purchases are for lunch
consumption. We assume that the change in
competitive food revenue occurs largely from
students whose response to new standards
takes the form of increased or decreased
demand, and that all other students maintain
previous levels of purchasing.51 Students
who do not buy the new options are assumed
to behave as if competitive foods were not
available, and we model their behavior using
the effect of competitive foods availability on
NSLP participation as measured by Gordon,
et al. (2007). DL is then the product of DCF
and the competitive foods availability effect
(CFAE) divided by the baseline NSLP
participation rate (PR):52
DL = DCF × CFAE/PR
The value for CFAE is assumed to be ¥4.6
percentage points, based on the finding by
Gordon, et al. (SNDA III, vol. 2, p. 117) that
the NSLP participation rate was 4.6
percentage points higher in schools that did
not offer competitive foods during mealtimes
compared to those that did. The national
average participation rate measured in
SNDA–III was 61.7 percent. The value of
comparing changes in competitive food
revenue to changes in NSLP revenue is
limited to the extent that costs per dollar of
gross revenue from the two sources differ.
Although we do not have the data necessary
to estimate profit margins on competitive
foods, we expect that margins on NSLP meals
`
and a la carte items, the most important
subgroup of competitive foods, are similar.
We assume in our estimates that other
school groups incur the same percentage
change in competitive food revenue as SFAs.
This assumption may not be realistic given
the difference in the nature of the foods sold
in occasional fundraisers, in vending
`
machines, in snack bars, and in a la carte
lines. However, given the importance of this
revenue source for its sponsors, we expect
that small or independent school groups will
adapt in a manner that result in a revenue
impact comparable to that experienced by the
SFAs.
51 This is in contrast to the possibility that all
students reduce their purchases by the same
percentage.
52 This relationship assumes that (1) the increase
in NSLP participation must come from nonparticipants who bought competitive foods as part
of lunch, (2) that the decrease in competitive food
purchases occurs as a reduction in the number of
students purchasing competitive foods while
students still purchasing competitive foods do not
change their behavior, and (3) the proportion of
students who switch from purchasing competitive
foods as part of lunch to NSLP participation is the
same as the additional proportion of students who
participate in NSLP in schools where competitive
foods are not available.
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Scenario 1: High Student Acceptance of New
Competitive Foods
For this scenario, we look to the experience
of schools and school districts that have
maintained or increased competitive food
sales after introduction of healthier
standards. With relatively modest efforts to
engage students in developing standards and
to promote healthier choices, these schools
have demonstrated that student demand for
healthier competitive foods can be
maintained or increased.
Most competitive food revenue is
`
generated by sales of a la carte foods. If
competitive food revenue continues to be
`
driven largely by a la carte sales, and the
transition to healthier school meals (and, by
`
extension, healthier a la carte items) is
complete prior to the publication of
competitive food standards, then the
incremental effect of those standards on
competitive food revenue in the short term
could be relatively small.
Under this scenario, we assume a modest
increase (five percent in SY 2015–2016
following no change in the first year of
implementation) in competitive food revenue
during the initial transition to healthier
competitive foods. We choose five percent to
match the minimum competitive food
revenue increase recorded by three of ten
schools in the California Healthy Eating
Active Communities study (WoodwardLopez, et al., 2010).
We then account for the costs incurred by
schools that have already adopted
competitive food standards. While we cannot
precisely quantify these costs and revenue
impacts, our review of the standards in place
in the four largest States and the nation’s
largest school district provides a basis for a
lower bound adjustment: we reduce all of our
estimates by 20 percent. After the 20 percent
adjustment, we estimate an increase in
competitive food revenues of four percent
(DCF = 4.0).
Case studies confirm the general NSLP
participation effect described in SNDA–III,
suggesting that an increase in competitive
food purchases after implementation of the
proposed rule may come at the expense of
NSLP participation. Because this scenario
assumes a small increase in competitive food
revenues, we estimate that SFAs will
experience a slight (0.3 percent) decrease in
school meal participation (DL = ¥0.3).
We attribute 36 percent of the 0.3 percent
change in the lunch participation to students
who are eligible for free and reduced-price
meals, and the other 64 percent to students
who pay full price,53 based on unpublished
results showing that 64 percent of
competitive food purchases were made by
students not eligible for free or reduced-price
meals.54 Our analysis also utilizes the
proportions of free, reduced-price, and paid
lunches served projected by USDA for the FY
2013 President’s Budget. For FY 2011, the
observed proportions were 58, 8, and 33
53 Paid, reduced price, and free NSLP meals each
have some level of government subsidy, therefore
even lunches that are ‘‘full price’’ are subsidized.
54 Unpublished ERS analysis of SNDA–III data.
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percent for free, reduced price, and paid
meals.
Using our estimate of a 0.3 percent
decrease in NSLP participation, we estimate
effects on school meal participation, SFA
revenues from reimbursable meals, and
Federal reimbursement costs.55 Federal
reimbursements are necessarily lower than
SFA revenues for the same meals since the
SFA revenue includes student payments for
meals served at reduced or full price. Our
estimated reduction in Federal costs is the
product of the estimated decrease in NSLP
meals multiplied by projections of the value
of the reimbursements for free, reduced price,
and paid meals.56 The net impact in schools
whose experiences align with this estimate is
an overall school food revenue increase of
roughly 0.4 percent.
Scenario 2: Lower Competitive Food Sales
With Fully Offsetting Increases in School
Meal Participation
Evidence of the effects of nutrition
standards on revenues from competitive
foods and beverages for this estimate is
drawn from a case study of Texas schools
(Cullen and Watson, 2009).57 USDA’s
analysis of the Texas data concluded that
overall competitive food purchases declined
by six percent. Assuming each purchase
contributes roughly equivalently to revenues,
this would suggest a six percent decline in
revenue from competitive food sales. To
adjust for States and school districts that
have already adopted competitive food
standards, we assume that 20 percent of the
revenue impact has already been realized
nationwide. That reduces the estimated six
percent competitive food revenue loss to 4.8
percent (DCF = ¥4.8)
In this scenario, we model the effects of
moderately high acceptance of competitive
foods that meet proposed rule standards. As
students reduce their competitive food
consumption in search of alternatives, many
turn to reimbursable meals. After
implementation of changes to competitive
food and school meal standards, many of the
`
items offered a la carte (the largest
component of SFA competitive food sales)
will be identical to components offered in
reimbursable meals. In this scenario, those
most likely to turn away from competitive
foods are also those who recognize that they
may be able to get the same foods at lower
price in an NSLP meal (DL = 2.0). The net
impact in schools whose experiences align
with this scenario is a small decrease in
overall school food revenue of roughly ¥0.03
percent.
It is possible that students’ economic
circumstances will play a role in their
55 Our baseline number of NSLP meals, like our
baseline NSLP revenue, begins with FNS program
projections prepared for the 2013 President’s
Budget. These are adjusted for the changes in
lunches served as a result of the recently published
rule to implement Sections 205 and 206 of the
HHFKA. See rule and RIA in Federal Register, Vol.
76, No. 117, pp. 35301–35318.
56 FNS projections of Federal reimbursements for
free, reduced price, and paid lunches are those used
to prepare the FY 2013 President’s Budget, adjusted
for changes for Sections 205 and 206 of HHFKA.
57 The analysis that follows reflects the work of
both the USDA’s ERS and the FNS.
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decision to replace competitive foods with
reimbursable meals. Once reimbursable
meals and competitive foods are subject to
comparably healthy standards, and the
difference between competitive foods and a
reimbursable meal is reduced largely to price,
increased participation in the reimbursable
meals program may be particularly attractive
to students who qualify for free or reducedprice benefits.
Scenario 3: Lower Competitive Food Sales
With Partially Offsetting Increases in School
Meal Participation
We illustrated above what could happen if
competitive food revenue falls by 4.8 percent
(DCF = ¥4.8) and schools experience a fully
offsetting increase in school lunch
participation. It is possible, however, that
fewer students will opt for school meals,
preferring to bring lunch from home or
perhaps purchase foods from outside
vendors. For Scenario 3 we maintain the
reduction in competitive food revenue but
suggest a lower increase in NSLP
participation. If NSLP participation increases
0.36 percent (DL = 0.36), the net impact in
schools whose experiences align with this
estimate is a small decrease in overall school
food revenue of roughly ¥0.7 percent.
C. Impacts on Participating Children and
Families
Beyond revenue impacts to SFAs and other
school groups, changes in food purchasing
choices caused by the proposed rule will also
have an economic effect on children and
their families. The projected decreases in
competitive food revenues represent
reductions in spending by school children
and their families on school-provided
competitive foods. We do not have sufficient
information to estimate increases or
decreases in overall spending by students
who find alternatives to school-provided
competitive foods. Some students will spend
less overall by replacing competitive foods
consumption with free or reduced price
school meals. A decrease in competitive food
sales may also increase foods brought from
home and/or foods purchased outside of
schools. These imply revenue increases for
food industries that sell foods brought from
home and purchased outside the school
setting.
The rule will not impact all students in the
same way. For example, price and
availability of competitive foods may differ
by region of the country, constraining choices
for some but not all students. For some
students, choices will be limited by their
incomes. For other students, alternatives to
competitive foods will be limited by school
policy; students at schools with closed
campuses will have fewer options, but may
benefit by choosing healthier foods as a
result.
D. Administrative Costs
Under the proposed rule, local educational
agencies (LEAs) and SFAs will be required to
maintain records such as receipts, nutrition
labels, and/or product specifications for food
items that will be available to students on the
school campus during the school day. The
purpose of this documentation is to ensure
that those foods comply with the competitive
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food standards. Thus, there will be
recordkeeping costs associated with the
proposed rule and these costs will occur at
the State agency level, the SFA and LEA
level, and at the school level. The estimated
additional annual burden for recordkeeping
under the proposed rule is 926,935 hours,
divided among the State agencies (1,040
hours), LEAs and SFAs (417,160 hours), and
schools (508,735) hours. Our estimate uses
data from the Bureau of Labor Statistics on
wages and salaries for State and local
government employees and assumes no
growth in burden hours over time. Wages are
inflated using estimates from the 2013
President’s Budget.58 Note that there are no
new reporting requirements in the proposed
rule.
TABLE 3—ESTIMATE OF ADMINISTRATIVE COSTS FOR RECORDKEEPING FOR PROPOSED RULE
Fiscal year (millions)
Recordkeeping
2014
2015
2016
2017
2018
Total
State Agencies .................................................................
SFAs and LEAs ...............................................................
Schools ............................................................................
$0.03
10.8
13.1
$0.03
11.1
13.5
$0.03
11.5
14.0
$0.03
11.9
14.5
$0.03
12.2
14.9
$0.14
57.4
70.0
Total ..........................................................................
23.9
24.7
25.5
26.3
27.2
127.6
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It is also possible that some schools and
LEAs may have additional costs due to the
proposed rule. For example, some schools
may require new equipment such as vending
machines to accommodate new products and
package sizes. Additionally, schools and/or
LEAs may have contracts with vendors that
will require modification which could result
in some additional labor cost. Those costs are
not estimated here because we lack sufficient
information on how many schools or LEAs
could be affected and how those costs might
be distributed among affected locations.
E. Industry Effects
Although they are not directly regulated by
the proposed rule, food manufacturers and
distributors will face changes in demand by
schools and SFAs in response to the rule.
Manufacturers will face reduced school
demand for some products and increased
demand for others. Some food manufacturers
may not have existing product lines that meet
the proposed rule’s requirements and may
lose market share to other manufacturers.
The impact of tightening the nutritional
standards for food and beverages sold at
public schools in the United States on food
vendors is difficult to know ex-ante. It is
likely that the elasticity of demand for food
at schools is quite steep, implying that absent
available alternatives, most consumption
behavior will change aggregate sales by a
small amount.
U.S. SFAs that participate in the NSLP
purchased roughly $8.5 billion in food in SY
2009–2010, including the value of USDA
foods.59 That represents only about 1.3
percent of the $644 billion worth of
shipments from U.S. food manufacturers in
2010.60 FNS estimates that SFA revenue from
competitive food equals about 20 percent of
overall SFA revenue (see Table 1). If we
assume that the ratio of food cost to revenue
is consistent between competitive foods and
other school foods, then SFA purchases of
58 We use wages and salaries for administrative
employment in the state and local government
sector from the Bureau of Labor Statistics’
‘‘Employer Cost for Employee Compensation’’
database (http://www.bls.gov/data/home.htm). For
FY 2011, wages and salaries for these positions
averaged $23.52 per hour. We inflate these through
FY 2016 with projected growth in the State and
Local Expenditure Index prepared by OMB for use
in the FY 2013 President’s Budget.
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competitive foods totaled about $1.7 billion
in SY 2009–2010. That represents only about
0.3 percent of the $644 billion worth of
shipments from U.S. food manufacturers in
2010.
According to the 2007 Economic Census,
about 23.4 percent of food manufacturing
sales are by firms with 100 or fewer
employees.61 If we assume that competitive
food sales are distributed to firms in
proportion to their share of overall sales, we
can estimate that in 2010 figures, about $400
million of competitive food sales is carried
out by these small businesses, out of over
$150 billion in total sales by these firms.
Implementing nutrition standards for
competitive foods will result in a more
nutritious, and potentially more expensive,
mix of foods offered. If we assume that the
cost of these foods is, on average, seven
percent higher under the new standards—
comparable to the estimated cost increase for
school meals under updated nutrition
standards—and that this increase will reduce
demand for these foods comparably to school
meals,62 we would expect to see a two
percent reduction in overall sales of
competitive foods—about $34 million of the
$1.7 billion in sales estimated for SY 2009–
2010, with about $8 million of these losses
experienced by small business.
While data is not available to estimate the
possible distributional effects across the food
industry overall, research indicates that some
of the marketplace changes that would be
required under the proposed standards are
already taking place. Wescott et al. (2012), for
example, found that between 2004 and 2009
the beverage industry reduced the number of
calories shipped to schools by 90 percent,
with a total volume reduction in full-calorie
soft drinks of over 95 percent. Therefore, at
least with respect to these products, many of
the changes required by the proposed rule
have already taken place under existing selfregulation and State and local standards,
59 USDA
School Food Purchase Study III, 2012.
of Economic Analysis, Gross Domestic
Product by Industry, data for NAICS 311 and 312,
excluding animal foods, tobacco and alcoholic
beverages (http://bea.gov/industry/xls/
GDPbyInd_SHIP_NAICS_1998-2011.xls)
61 Bureau of the Census, 2007 Economic Census
(http://www.census.gov/econ/census07)/.
60 Bureau
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reducing the net impact of Federal standards
relative to current conditions.
Local vending machine operators may also
face some changes to their current business
model. Although the effect of the proposed
rule on individual operators will vary,
available industry and school data suggest
that the effect on this industry group as a
whole will be small. Vending machine sales
made up a small percentage of total
competitive food revenue in SY 2004–2005.
`
We estimate that a la carte sales accounted
for 93 percent of total competitive food
revenue. The remaining seven percent is
generated by a variety of alternate sources.
Although vending machines are the most
common of these alternate sources of
competitive food revenue (they were found
in 52 percent of schools in SY 2004–2005
(Gordon, et al., 2007, vol. 1, pp. 96–100))
they are not the only alternate source. About
26 percent of schools offered competitive
food in school stores, snack bars, food carts,
and occasional fundraisers (Gordon, et al.,
2007, vol. 1, p. 101).
Vending and manual foodservice operators
served 19,000 primary and secondary schools
in 2008, which was down about 14 percent
from 2006 (VendingTimes.com, p. 3).63
Primary and secondary schools accounted for
just 2.2 percent ($1 billion out of $45.6
billion) of total vending machine sales in
2008 (VendingTimes.com, p. 3).
These data suggest that the impact of the
proposed rule on the vending machine
industry as a whole will be limited. Just a
small share of vending industry revenue is
generated in primary and secondary schools.
And, importantly, some of that revenue is
generated from sales of foods that are already
compliant with the proposed rule standards,
such as 100 percent juice and bottled water.
Other products found in school vending
machines in SY 2004–2005 were also likely
62 See Gleason, ‘‘Participation in the National
School Lunch Program and the School Breakfast
Program,’’ Am J Clin Nutr 61: 213S–220S.
63 This figure is much smaller than the 52 percent
of schools figure from SNDA–III. The vending
industry data was gathered through a survey of
vending machine operators, providers of coinoperated entertainment services, coffee-break
service providers, and related industry subgroups.
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compliant or near-compliant with the
proposed rule.64
Both industry and Census Bureau data
indicate that most vending machine
operations are small businesses. The majority
of vending machine operators that operated
for the entire year in 2007 (76 percent)
employed fewer than ten individuals
according to the U.S. Economic Census.65
About 37 percent of operators generated less
than $250,000 in receipts, although those
operators accounted for less than three
percent of total revenue from this industry
group.66 Some small vendors may be
challenged by the changes contained in the
proposed rule. Whether small or large, many
vending machine operators will need to
modify their product lines to meet the
requirements of the rule.
Limited data from California suggests that
the transition to healthier competitive foods
can be managed, that healthier foods can be
marketed successfully in schools, and that
`
competitive food sales outside of the a la
carte line need not decline. In the first year
healthier competitive food policies under
California Senate Bill 19 (2001), seven of ten
pilot sites that were able to report such data
saw per capita decreases in non-foodservice
competitive food sales (Center for Weight and
Health, UC Berkeley, 2005, p. 12). However,
vending machine and/or school store revenue
increased in two other sites (both high
schools) which led researchers to conclude
that ‘‘SB 19 compliant foods and beverages
can be marketed successfully at the high
school level’’ (Center for Weight and Health,
UC Berkeley, 2005, p. 12).
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F. Distributional Effects
1. Revenues and Grade Level
Competitive food purchases and revenues
are not equally distributed across schools.
Elementary schools derive much less revenue
from competitive foods than do secondary
schools. They are typically smaller, much
less likely to have vending machines, and
`
usually serve a smaller assortment of a la
carte items. According to SNDA–III, high
schools obtain almost three times as much
revenue from competitive foods as do
64 The SNDA–III data do not allow us to identify
which other products in school vending machines
are compliant with the proposed rule standards.
Nor does the data allow us to estimate revenue from
vending machine sales of compliant products.
Nevertheless, the list of foods found in school
vending machines includes several categories of
products, in addition to water and 100 percent
juice, that are likely compliant with the proposed
rule, or include specific products that are
compliant. These include milk, other lowfat dairy
products, certain low calorie beverages, snacks such
as pretzels and reduced-fat chips, and even fruits
and vegetables. See Gordon, et al., 2007, pp. 104–
105.
65 Data for NAICS code 454210, ‘‘vending
machine operators.’’ U.S. Census Bureau, http://
www.census.gov/econ/industry/ec07/a454210.htm
(accessed 11/13/2011).
66 Ibid. Note that these statistics are for all
vending machine operators in NAICS code
4545210, not just those that serve the school
market. We do not know whether the concentration
of small vending machine operators that serve the
school market differs from the concentration of
small operators in the industry as a whole.
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elementary schools; therefore, changes in
competitive food standards will have a
greater impact at the middle- and high-school
levels than they will in elementary schools.
2. Low-Income Students
Differences in competitive food revenues
by free and reduced-price meal participation,
one indicator of whether schools serve
primarily lower-income students, are even
more dramatic. According to SNDA–III,
schools serving at least one-third of their
meals at full price to higher income students
obtain more than seven times as much
revenue from competitive food sales as
schools serving a larger percentage of free
and reduced-price (and hence lower-income)
students.67 However as noted previously,
revenues may drop more in terms of
percentages at lower-income schools if lowincome students are more price-sensitive
than high-income students.68 This difference
is mirrored in the behavior of low income
students. About two-thirds (64 percent) of
competitive foods and beverages are selected
by students who are not receiving free or
reduced price meals.
Given these purchasing patterns, revenue
losses would be substantial if students who
previously bought competitive foods and
beverages not allowed under the Federal
standards simply stopped buying any foods.
The revenue losses would be concentrated in
secondary schools and schools serving higher
proportions of non-poor students, i.e.,
students not eligible for free or reduced-price
meals. However, case studies based on
experience with established State- or districtlevel nutrition standards indicate that many
students will substitute other competitive
food and beverage purchases, or switch to
purchasing USDA school meals. This would
likely result in reducing revenue losses
substantially. In predominantly low income
schools, students may be even more inclined
to turn to reimbursable meals if not satisfied
with competitive food options. For those
students, a free or reduced price meal may
become the most attractive option.
Finally, there is some suggestion that
access to healthy foods in schools varies by
the socio-economic standing of the school
and its neighborhood (Tipler, 2010).
Improved nutrition standards for competitive
foods could lessen the nutrition gap among
schools.
G. Benefits
The proposed rule is intended to help
ensure that all foods sold at school—whether
provided as part of a school meal or sold in
competition with such meals—are aligned
with the latest and best dietary
recommendations. They will work in concert
with recent improvements in school meals to
support and promote diets that contribute to
students’ long-term health and well-being.
And they will support efforts of parents to
promote healthy choices for children, at
home and at school.
A growing body of evidence tells us that
giving school children healthful food options
will help them make healthier choices during
the school day. In 2012, the Pew Health
67 Unpublished
ERS analysis of SNDA–III data.
et al., 2010.
68 Woodward-Lopez,
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Group and the Robert Wood Johnson
Foundation conducted an extensive Health
Impact Assessment to evaluate potential
benefits that could result from national
standards for competitive foods sold in
schools during the school day. They
concluded that:
• A national competitive foods policy
would increase student exposure to healthier
foods and decrease exposure to less healthy
foods; and
• Increased access to a mix of healthier
food options is likely to change the mix of
foods that students purchase and consume at
school, for the better.
These kinds of changes in food exposure
and consumption at school are important
influences on the overall quality of children’s
diets. While nutrition standards for foods
sold at school may not on their own be a
determining factor in children’s overall diets,
they are a critical strategy to provide children
with healthy food options throughout the
entire school day, effectively holding
competitive foods to the same standards as
the rest of the foods sold at school during the
school day. This, in turn helps to ensure that
the school nutrition environment does all
that it can to promote healthy choices, and
help to prevent diet-related health problems.
Ancillary benefits could derive from the fact
that improving the nutritional value of
competitive foods may reinforce schoolbased nutrition education and promotion
efforts and contribute significantly to the
overall effectiveness of the school nutrition
environment in promoting healthful food and
physical activity choices.
The link between poor diets and health
problems such as childhood obesity are a
matter of particular policy concern given
their significant social and economic costs.
Obesity has become a major public health
concern in the U.S., second only to physical
activity among the top 10 leading health
indicators in the United States Healthy
People 2020 goals.69 According to data from
the National Health and Nutrition
Examination Survey 2007–2008, 34 percent
of the U.S. adult population is obese and an
additional 34 percent are overweight (Ogden
and Carroll, 2010).
The trend towards obesity is also evident
among children; 33 percent of U.S. children
and adolescents are now considered
overweight or obese (Beydoun and Wang,
2011), with current childhood obesity rates
four times higher in children ages 6 to 11
than they were in the early 1960s (19 vs. 4
percent), and three times higher (17 vs. 5
percent) for adolescents ages 12 to 19 (IOM,
2007b, p. 24). These increases are shared
across all socio-economic classes, regions of
the country, and have affected all major
racial and ethnic groups (Olshansky, et al.,
2005).
Excess body weight has long been
demonstrated to have health, social,
psychological, and economic consequences
for affected adults (Guthrie, Newman, and
Ralston, 2009; Wang, et al., 2008). Recent
research has also demonstrated that excess
body weight has negative impacts for obese
69 ‘‘Food Labeling: Calorie Labeling of Articles of
Food in Vending Machines.’’ NPRM. 2011.
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and overweight children. Research focused
specifically on the effects of obesity in
children indicates that obese children feel
they are less capable, both socially and
athletically, less attractive, and less
worthwhile than their non-obese
counterparts (Riazi, et al., 2010).
Further, there are direct economic costs
due to childhood obesity; $237.6 million (in
2005 dollars) in inpatient costs (Trasande, et
al., 2009) 70 and annual prescription drug,
emergency room, and outpatient costs of
$14.1 billion (Cawley, 2004).
Childhood obesity has also been linked to
cardiovascular disease in children as well as
in adults. Freeman, Dietz, Srinivasan, and
Berenson (1999) found that ‘‘compared with
other children, overweight children were 9.7
times as likely to have 2 [cardiovascular] risk
factors and 43.5 times as likely to have 3 risk
factors’’ (p. 1179) and concluded that
‘‘[b]ecause overweight is associated with
various risk factors even among young
children, it is possible that the successful
prevention and treatment of obesity in
childhood could reduce the adult incidence
of cardiovascular disease’’ (p. 1175).
It is known that overweight children have
a 70 percent chance of being obese or
overweight as adults. However, the actual
causes of obesity have proven elusive (ASPE,
no date). While the relationship between
obesity and poor dietary choices cannot be
explained by any one cause, there is general
agreement that reducing total calorie intake
is helpful in preventing or delaying the onset
of excess weight gain.
There is some recent evidence that
competitive food standards can improve
children’s dietary quality:
• Taber, Chriqui, and Chaloupka (2012)
compared calorie and nutrient intakes for
California high school students—with
competitive food standards in place—to
calorie and nutrient intakes for high school
students in 14 States with no competitive
food standards. They concluded that
California high school students consumed
fewer calories, less fat, and less sugar at
school than students in other States. Their
analysis ‘‘suggested that California students
did not compensate for consuming less
within school by consuming more
elsewhere’’ (p. 455). The consumption of
fewer calories in school ‘‘suggests that
competitive food standards may be a method
of reducing adolescent weight gain’’ (p. 456).
• A study of competitive food policies in
Connecticut concluded that ‘‘removing low
nutrition items from schools decreased
students’ consumption with no
compensatory increase at home’’ (Schwartz,
Novak, and Fiore, 2009, p. 999).
• Similarly, researchers for Healthy Eating
Research and Bridging the Gap found that
‘‘[t]he best evidence available indicates that
policies on snack foods and beverages sold in
school impact children’s diets and their risk
for obesity. Strong policies that prohibit or
restrict the sale of unhealthy competitive
70 Trasande, et al., 2009 report that between 1999
and 2005, hospitalizations related to obesity
increased 8.8 percent among children ages 2 to 5,
10.4 percent among children 6 to 11, and 11.4
percent among children ages 12 to 19 after
controlling for other factors.
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foods and drinks in schools are associated
with lower proportions of overweight or
obese students, or lower rates of increase in
student BMI’’ (Healthy Eating Research,
2012, p. 3).
Pew Health Group and Robert Wood
Johnson Foundation researchers noted that
the prevalence of children who are
overweight or obese has more than tripled in
the past three decades, which is of particular
concern because of the health problems
associated with obesity. In particular,
researchers found an increasing number of
children are being diagnosed with type 2
diabetes, high cholesterol, and high blood
pressure. These researchers further observed
that children with low socioeconomic status
and black and Hispanic children are at a
higher risk of experiencing one or more of
these illnesses (pp. 39–40, 56).
Their analysis also noted that:
[T]here is a strong data link between diet
and the risk for these chronic diseases. Given
the relationship between childhood obesity,
calorie consumption, and the development of
chronic disease risk factors at a young age,
this report proposes that a national
[competitive food] policy could alter
childhood and future chronic disease risk
factors by reducing access to energy-dense
snack foods in schools.
To the extent that the national policy
results in increases in students’ total dietary
intake of healthy foods and reductions in the
intake of low-nutrient, energy-dense snack
foods, it is likely to have a beneficial effect
on the risk of these diseases. However, the
magnitude of this effect would be
proportional to the degree of change in
students’ total dietary intake, and this factor
is uncertain (p. 68).
In summary, the most current,
comprehensive, and systematic review of
existing scientific research concluded that
competitive foods standards can have a
positive impact on reducing the risk for
obesity-related chronic diseases.
Because the factors that contribute both to
overall food consumption and to obesity are
so complex, it is not possible to define a level
of disease or cost reduction that is
attributable to the changes in competitive
foods expected to result from implementation
of the rule. USDA is unaware of any
comprehensive data allowing accurate
predictions of the effect of the proposed
requirements on consumer choice, especially
among children. But to illustrate the
magnitude of the potential benefits of a
reduction in childhood obesity, based on
$237.6 million in inpatient costs and $14.1
billion in outpatient costs, a one percent
reduction in childhood obesity implies a
$143 million reduction in health care costs.
Some researchers have suggested possible
negative consequences of regulating nutrition
content in competitive foods. They argue that
not allowing access to low nutrient, high
calorie snack foods in schools may result in
overconsumption of those same foods outside
the school setting (although as noted earlier,
the Taber et al. study concluded
overcompensation was not evident among
the California high school students in their
sample). Some groups have expressed
concerns that the focus on competitive foods
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is less on nutrition than obesity, thus
regulating competitive foods may contribute
to bodyweight and/or appearance issues and
result in increasing body insecurity feelings
among children. The focus on obesity may
also increase the stigmatization of children
who are perceived as being obese.
H. Limitations and Uncertainties
We conducted this analysis using available
data; due to the limitations of these data,
there are some important qualifications to
our analysis that should be noted. We discuss
a few of these below.
1. Limitations in Available Research
Available research generally supports the
notion that school food revenues will not
necessarily be adversely affected by the
implementation of healthier competitive food
standards. Some schools or school districts,
however, have seen revenue losses. Cullen
and Watson (2009, p. 709) note that smaller
districts might ‘‘have more barriers
associated with the bidding and food contract
process and availability of alternative
products’’ relative to large districts. In
addition, a five-month pilot program in North
Carolina elementary schools saw decreases in
competitive food sales with no offsetting
increase in school meal participation. The
published summaries of the pilot outcomes
attribute all of the loss to reduced
competitive food revenue and increases in
the cost to schools of acquiring foods (NC GA
2011). North Carolina’s State Superintendent
commented on the lack of available foods
that met the pilot standards and although she
stated that increases in the availability of
appropriate replacements would likely
improve the economic impact of the healthier
food standards, she still had concerns that
healthier products may never generate the
revenue necessary to meet North Carolina
school needs (NC GA 2011, p. 2 Atkinson
letter).
2. Prices of Competitive Foods
We do not have actual prices paid for
specific competitive food and beverage items.
While we assume that competitive items
meeting and not meeting the proposed rule
standards contribute equally to revenues, this
is uncertain. It is likely that reformulated
versions of existing competitive foods will
cost at least as much as foods currently
available, if for no other reason than the new
items do not have the same market share.
However, to meet calorie or fat standards,
manufacturers may simply reduce package
sizes, e.g., replacing 16 ounce 100 percent
juice drinks with four or eight ounce bottles.
In those cases, there is little reason to expect
higher prices. Additionally, not all compliant
foods will be close substitutes for existing
foods, e.g., fruit drinks that are not 100
percent fruit juice may be replaced by bottled
water at a similar or lower cost.
3. State and Local Support of Reimbursable
Meals
Information on State and local payments in
support of USDA school meals is not
available. Some States and localities make
payments that are tied to USDA school meal
participation. If combined Federal, State, and
local payments are greater (or less) than the
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costs of producing meals, SFAs would likely
make lunch pricing decisions with a view
toward optimizing their levels of Federal,
State, and local subsidies.
4. Student Response to New Standards
Only a few limited case studies assess
possible behavior change that may occur in
response to the proposed rule. Even these
limited studies are based on standards that
are not exactly the same as the proposed rule.
The local conditions in which they take place
may not match national conditions.
Implementation of State standards may have
been accompanied by other factors, such as
nutrition education or promotion of school
meals, which may have influenced outcomes.
While we believe that the evidence we
examined is generally consistent with the
suggestion that new standards will be
associated with purchases of healthier
competitive foods and increased school meal
participation, data limitations create
considerable uncertainty about the size of
these changes. We also lack information on
changes in purchasing behavior over time. As
students adjust to the new range of
competitive options, their purchasing
behavior could adapt, altering revenue
patterns.
5. Industry Response
This analysis assumes that food
manufacturers and vendors, SFAs, and other
school groups that sell competitive foods and
beverages will adapt their behaviors in
response to the proposed rule. Studies of
State and local changes in competitive food
and beverage policies indicate that these
behavioral changes will occur (Cullen and
Watson, 2009; Wharton, Long, and Schwartz,
2008; Woodward-Lopez, et al., 2010; USDA
2005). We draw on this literature to estimate
the possible effects of behavioral changes on
competitive food and beverage revenues.
This literature indicates that to a large
extent, lost revenues from products that can
no longer be sold in schools because of the
proposed rule may be offset by increased
purchases of products that are already widely
available and purchased as competitive items
(for example, bottled water) or by purchases
of newly available, healthier products. In
some cases changes are relatively simple. For
example juices currently sold in 12-oz
containers could be sold in 8-oz or 4-oz
containers, as appropriate for grade level. In
other cases, reformulations of existing
products are already underway. Actions by
State agencies and voluntary groups such as
Alliance for a Healthier Generation have
already encouraged food manufacturers to
develop new products for competitive food
sales: 4-oz fruit bowls; nonfat, no-sugar
added frozen yogurt; 4-oz frozen fruit bars;
and reduced-fat and sodium pizza with
whole grain crust (Alliance for a Healthier
Generation, 2010). Food service staff in
California, however, also reported that more
products are needed and that the costs of
such products are frequently higher than
those they replace (Woodward-Lopez, et al.,
2005b).
Establishment of Federal standards is
likely to spur further product development
and increased sales volume that may help to
bring prices in line with those of less-
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nutritious competitive items. Because State
and local experience to date has preceded the
establishment of Federal standards, their
results may overstate the challenges that
schools will face in implementing the
proposed rule. The pressures on school
revenue from high costs and limited
availability could ease in the period between
publication of proposed rule standards and
the effective date of a final rule.
6. SFA and School Compliance
Early studies on competitive food revenues
indicate that not all schools have complied
with existing State competitive food
standards.71 This may be due, in part, to a
lack of approved product choices, especially
for early implementers. Compliance may be
less of a challenge with national standards,
especially as industry and students continue
to adapt to State standards already in place.
But, to the extent that schools fail to
implement or fully enforce certain provisions
of the proposed rule, the revenue impact of
the rule will be lower. Each of our estimates
assumes full compliance with the proposed
rule.
7. School Participation Federal Meal
Programs
It is possible that some schools could
choose to leave NSLP and SBP to avoid the
new competitive food standards. Although
some schools may realize significant losses in
revenue from competitive foods, especially in
the short term, we believe it is unlikely that
many, if any, will choose to do so. On
average, SFAs receive just 16 percent of their
total revenue from competitive foods; 84
percent of revenue is derived from Federal
reimbursements for NSLP and SBP meals,
student payments, and State and local
contributions tied to those meals (USDA,
2008).
8. Food and Labor Costs
This analysis focuses on revenues in SFAs
and other school groups. It does not address
food and labor costs directly because few of
the research reports and case studies report
detailed cost information. One study
˜
(Trevino et al., 2012) that did report expenses
and labor costs in addition to revenues found
no statistically significant difference between
intervention and control schools after the
intervention schools implemented stronger
competitive food standards. Although the
differences were not statistically different,
intervention schools were found to have
higher excess revenue over expenses than the
control schools ($3.5 million versus $2.4
million) (pg. 421).
Although we do not address costs directly,
we expect that cost will have a limited effect
on the net revenue of SFAs and other school
groups. SFA competitive food revenue is
`
derived primarily from a la carte sales. Under
`
the proposed rule, a la carte items that are
available as part of a reimbursable meal are
deemed to meet the new standards and those
items will be subject to new school meal
standards under regulations that will take
71 See, for example, SNDA–III, V. 1, 2007;
Woodward-Lopez, et al., 2005b; Bullock, et al.,
2010; Woodward-Lopez, et al., 2010.
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effect prior to this competitive foods rule.72
`
To the extent that schools’ a la carte lines are
´
stocked with school meal entrees, side
dishes, and beverages that are also available
in reimbursable meals, much of the cost of
`
providing healthier a la carte items will have
been incurred before competitive food
standards take effect.
`
This does not apply, of course, to a la carte
items that are not components of a
reimbursable meal or to items sold in
vending machines or through other outlets;
schools may incur higher costs to replace
those items with items that meet this rule’s
standards. However, even for those foods,
industry and schools will have had some
time after implementation of new school
meals standards to prepare. Some of the fixed
costs of product development, contracting
with new suppliers, developing recipes, and
training kitchen staff will have already been
incurred by industry and schools as they
implement Federal school meal standards,
easing pressure, perhaps, on prices and the
administrative costs of complying with this
competitive foods rule.
IV. Alternatives
A. Full Implementation of IOM
Recommendations
We first consider a rule that adopts all of
the IOM standards without change. The
standards in the proposed rule were guided
in large part by the IOM standards, but were
also informed by other considerations. Thus,
for example, the proposed rule allows a
broader array of products in high schools
than are included in the IOM standards. In
addition, some of the IOM standards are
more restrictive than those contained in the
proposed rule, and it is possible that fewer
currently available food products meet the
standards.
The overall revenue effect on SFAs that
lose competitive food sales depends on the
extent to which students replace
consumption of competitive foods with
increased participation in the NSLP, an
unknown that may vary according to
characteristics of the student population
(such as percent of children eligible for free
or reduced price meals) or school policy
(allowing students to leave campus at lunch
time). Strong growth in NSLP participation,
reported by some schools, would fully offset
the reduction in competitive food receipts.
However, lesser growth in NSLP
participation allows for the possibility of
substantial overall revenue losses.
B. Less Comprehensive Standards
A second alternative considered would
place fewer restrictions on the types of
competitive foods and beverages available to
students. Under this scenario, students
would likely have a wider range of options
and, potentially, the choices available to
students would contain more of the foods
that they are already familiar with. This
alternative increases the likelihood that there
will be no net loss in competitive food
revenue.
72 The proposed school meal standards rule was
published in January, 2011. See Federal Register
Vol. 76, No. 9, p. 2494.
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Less comprehensive competitive food
standards could also have implications for
children’s health. The competitive food
standards are crafted specifically because of
concern about children’s health and
especially childhood obesity. Thus adopting
less comprehensive standards could reduce
the positive impact of the proposed standards
on children’s health.
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´
C. Exemption for Reimbursable Meal Entrees
and Side Dishes
As noted previously, many of the food
`
´
items sold a la carte are entrees or snacks that
are also served as part of a reimbursable
meal. The proposed rule provides three
alternative standards for NSLP menu items
`
sold a la carte. The first would allow NSLP
´
entrees and snacks to be sold any time as an
`
a la carte food as long as they meet the fat
and sugar standards in the proposed rule.
The other two alternatives have to do with
´
the menu cycle; providing NSLP entree and
snack items to be sold (1) on the same day
they were served as part of a reimbursable
meal, or (2) within four days of being served
as part of a reimbursable meal.
The primary benefit of an exemption that
is limited to foods on the current day’s menu
`
is that those items could be offered a la carte
no more often than they could be served in
reimbursable meals without exceeding
weekly NSLP or SBP restrictions on average
calories, fat, or sodium. This more limited
exemption would also encourage students to
consume a greater variety of foods, even if
`
they choose foods consistently from the a la
carte line. However, an exemption that is
´
limited to entrees and side dishes on the
current day’s menu could complicate meal
planning and preparation by denying schools
the ability to serve leftover items on the next
school day.
The primary benefit of an exemption
within four operating days of its offering in
an NSLP or SBP menu is that it would ease
school planning and increase efficiency by
allowing the service of leftover items more
flexibly. However, it could discourage variety
in student consumption, and may tend to
increase consumption of entrees higher than
average in calories, fat, and sodium that in
the school meals programs are balanced by
other offerings during the week.
D. School-Sponsored Fundraisers
The proposed rule offers two alternatives
on exempt fundraisers. The first alternative is
to allow State agencies to set the frequency
of exempt fund raisers and the second is
similar; State agencies would still set the
frequency of exempt fund raisers, but subject
to USDA approval. The proposed rule
complements the Federal nutrition standards
for reimbursable meals that take effect at the
start of SY 2012–2013. Together, these
reforms are designed to create the all-venue,
day-long healthy school food environment
recommended by IOM.73 The consistency of
the message on healthy eating conveyed to
73 For schools to ‘‘take full advantage of their
unique position to model and reinforce healthy
eating behaviors’’ competitive food policies must
‘‘consider foods and beverages offered in all venues
and throughout the school day’’ (IOM 2007a, pp.
25–26).
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students through these measures is
diminished by frequent exemptions for
fundraisers. If a consistent message is more
effective in influencing eating habits than an
inconsistent message, then frequent
fundraiser exemptions may reduce long-term
student adherence to a diet consistent with
the Dietary Guidelines. It is also important to
note that current practice in many schools is
quite limited. More than half of all schools,
and 39 percent of high schools, never sold
sweet or salty snacks as fundraisers in SY
2004–2005.
The benefits of partial or full State
discretion derive from State administrators’
knowledge of what will prove most effective
in their schools. State discretion may, for
example, give rise to creative policies that
encourage districts to move away from foodbased fundraisers while allowing for a short
transition period that recognizes individual
districts’ dependence on such revenue.
Through this type of flexibility, it is possible
that State discretion would ultimately result
in fewer exempt fundraisers than would be
the case under a uniform national standard.74
However, the option that would give States
full discretion over exempt fundraisers
entails some small risk that one or more
States or school districts (if States use their
discretion to leave the decision to local
districts) will adopt standards that impose
little or no restriction on the frequency of
exempt fundraisers. A policy that does not
limit the frequency of exempt fundraisers
risks undermining the goals of Federal
competitive food and reimbursable meal
regulations.
Providing States with partial discretion
over the frequency of exempt fundraisers
could also potentially result in a modest
increase in administrative costs at both the
State and Federal levels. That option will
require the development of policies on the
acceptability of State standards, and
procedures to administer the application and
approval process.
E. Total Sugar
The proposed rule’s alternative sugar
standards for competitive foods would limit
total sugar content to either 35 percent of
calories or 35 percent of weight. Both
standards would place a meaningful check
on the amount of sugar allowed in
competitive foods while providing
exceptions for certain fruit and vegetable
snacks and yogurt.
The calorie-based standard would be more
restrictive than the weight-based standard for
sugar-sweetened foods with high moisture
content, such as ice cream and other frozen
desserts.75 The proposed rule’s calorie-based
standard would not disallow those foods, but
for some individual products, the caloriebased standard would require that they
74 States and local districts would be free, as well,
to set policies that allowed fewer exempt
fundraisers than a uniform national standard.
However, only a policy of State discretion would
allow relatively permissive local standards for a
short transition period.
75 Flavored milk is not subject to the proposed
rule’s total sugar standard.
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contain less sugar than the weight-based
standard for an identically sized serving.76
For products with low moisture content
the ratio of fat to sugar is more critical.
Because a gram of fat has more than twice as
many calories as a gram of sugar, snack
products and desserts with a relatively high
fat content (from nuts or chocolate, for
example) may be disallowed under the
proposed rule’s weight-based sugar standard
while meeting its calorie-based standard.77
F. Naturally Occurring Ingredients and
Fortification
Competitive foods that do not satisfy one
of the proposed rule’s food group
requirements may still be sold to students if
they provide at least 10 percent of the daily
value of a ‘‘naturally occurring’’ nutrient of
concern: Calcium, potassium, vitamin D, or
dietary fiber. Naturally occurring nutrients
are those found in non-fortified foods. As an
example, the preamble to the rule lists dry
milk solids, cheese, or rhubarb as naturally
occurring sources of calcium. Processed
foods that use these naturally calcium-rich
foods as ingredients can meet the proposed
rule’s calcium standard. Processed foods that
are only able to reach the 10 percent daily
value for calcium through fortification with
a non-food source would not meet the
standard. The primary alternative to this
provision is to allow fortification with nonfood ingredients.
The Department believes that recognizing
only naturally occurring nutrient sources is
more consistent with the recommendation of
the Dietary Guidelines that ‘‘nutrients should
come primarily from foods’’ (USDA–HHS
2010, p. 49). A rule that does not credit the
contribution of non-food sources to meeting
the rule’s ten percent standard for DGA
nutrients of concern is also better aligned
with IOM recommendations. IOM cites
‘‘[e]merging evidence for the health benefits
of fruits, vegetables, and whole grains’’ that
‘‘reinforces the importance of improving the
overall quality of food intake rather than
nutrient-specific strategies such as
fortification and supplementation’’ (IOM,
2007a, p. 41).
Despite these benefits of a food-based
approach, the Department recognizes that
schools may be unable to distinguish
products that satisfy the ‘‘naturally
occurring’’ requirement from products that
do not. At present, the contribution of foodbased and non-food sources to the nutrient
values on processed food nutrition labels are
not shown separately. The practical effect of
76 For example, 100 grams of ready-to-eat
chocolate pudding (ID 19183 in the USDA National
Nutrient Database for Standard Reference, release
24) contains 142 calories and 17.17 grams of total
sugar. By weight, this product is 17.17 percent
sugar, well under the proposed rule’s 35 percent by
weight standard. But 17.17 grams of sugar have 65
calories (at 3.8 calories per gram). That is 46 percent
of the 142 total calories in this product, a figure that
exceeds the proposed rule’s 35 percent of calories
standard (http://ndb.nal.usda.gov/).
77 Certain varieties of trail mix, granola bars, and
whole grain cookies sometimes fall into this group.
Two examples from the USDA’s National Nutrient
Database for Standard Reference (release 24) are
product IDs 25056 (chocolate coated granola bar)
and 18533 (iced oatmeal cookie).
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this limitation may be that schools will
approve few competitive foods for sale on the
basis of their calcium, potassium, vitamin D,
or dietary fiber content alone. In an effort to
exclude items that achieve targeted levels of
these nutrients through non-food
fortification, schools may disallow any item
with non-food sources of these nutrients
unless they also satisfy one of the proposed
rule’s food group requirements or other
exemptions. A possible consequence is that
the proposed rule will not contribute as
effectively as intended to increasing student
intake of these nutrients of concern.
It is unclear how cost might impact the mix
of competitive foods offered for sale under
these alternate provisions. If fortification
with non-food sources of calcium, potassium,
vitamin D, or dietary fiber is an inexpensive
way for manufacturers to gain access to the
school competitive food market, then a rule
that allows non-food fortification may
increase the variety and lower the cost of
competitive food products available to
students. At the same time, inexpensive
fortified snacks and beverages may crowd out
whole grains, fruits, vegetables, and dairy
products.
G. Allowable Beverage Sizes in High Schools
The proposed rule would allow plain
water, milk, nutritionally equivalent milk
alternatives, and 100 percent fruit or
vegetable juice to be sold to elementary,
middle, and high school students outside of
electrolytes’’ (IOM, 2007a, p. 11). In these
limited circumstances, IOM would endorse
the decision of an athletic coach to make
such drinks available.
the meal service area. In addition to these,
the proposed rule would allow schools to
make certain calorie free and low calorie
beverages available to high school students.
(‘‘Calorie free’’ and ‘‘low calorie’’ are FDA
standards.78) At the high school level, the
proposed rule would limit all calorie free
beverages to 20 fluid ounces and low calorie
beverages to 12 fluid ounce containers. The
proposed rule places no size limit on
containers of plain water.
I. Caffeinated Beverages
H. Low Calorie Beverages
The proposed rule’s alternative calorie
limit for beverages for high school students
would permit up to either 40 calories per 8
fl oz serving (and 60 calories per 12 fl oz) or
50 calories per 8 fl oz serving (and 75 calories
per 12 fl oz). The higher 50 calorie limit
would permit the sale of some national brand
sports drinks in their standard formulas.79
The lower 40 calorie limit would only allow
the sale of reduced-calorie versions of those
drinks. The 50 calorie alternative would open
the door to a class of competitive beverages
with great market strength and consumer
appeal. Such a change might generate
significant revenue for schools and student
groups.
IOM specifically excludes sports drinks
from both its Tier 1 and Tier 2 lists of
beverages. However, IOM does recognize
their value for student athletes engaged in
prolonged physical activity for ‘‘facilitating
hydration, providing energy, and replacing
Consistent with IOM recommendations,
the proposed rule requires that beverages
served to elementary and middle school
students be caffeine free or include only
small amounts of naturally occurring
caffeine. The proposed rule, however, does
not restrict caffeinated products for high
school students, which is a departure from
the IOM guidelines. The Department invites
comments on providing the exception for
high school students.
V. Accounting Statement
As required by OMB Circular A–4, we have
prepared an accounting statement showing
the annualized estimates of benefits, costs
and transfers associated with the provisions
of this proposed rule.80 As discussed
throughout this impact analysis, available
data do not allow us to develop point
estimates of competitive food or reimbursable
meal revenue effects with any certainty. For
this reason, the only dollar figures presented
in the accounting statement are those
associated with Table 3’s State agency, LEA,
and school-level recordkeeping costs.
The accounting statement’s cost figures are
equal to the annualized, discounted sum of
the estimated cost stream from Table 3:
Fiscal year ($ millions)
2014
Total projected nominal cost of final rule ........................
2015
2016
2017
2018
Total
$23.9
$24.7
$25.5
$26.3
$27.2
$127.6
2018
Total
Applying 7 and 3 percent discount rates to
this nominal cost stream gives present values
(in 2012 dollars):
($ millions)
2014
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Total cost (present value, 7% discount rate) ...................
Total cost (present value, 3% discount rate) ...................
78 ‘‘Calorie free’’ may be used on a label for foods
with fewer than 5 calories per ‘‘reference amount
customarily consumed.’’ Foods may be labeled
‘‘low calorie’’ if they contain no more than 40
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$20.9
22.5
2015
2016
$20.1
22.6
calories per reference amount customarily
consumed (21 CFR 101.60(b)).
79 Nutrition labels on product Web sites for both
Gatorade and Powerade show 50 calories per 8 fl
oz serving.
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2017
$19.5
22.7
$18.8
22.7
$18.1
22.8
$97.4
113.3
80 OMB Circular A–4 is available at
www.whitehouse.gov/sites/default/files/omb/assets/
regulatory_matters_pdf/a-4.pdf.
81 The Excel formula for this is PMT(rate, #
periods, PV, 0, 1).
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The annualized values in FY 2012 dollars
of these discounted cost streams are
computed with the following formula, where
PV is the discounted present value of the cost
stream ($97.4 in the illustration), i is the
discount rate (7 percent), and n is the number
of years beyond FY 2012 (6).81
Outcome
scenario
Benefits
Annualized Monetized ($millions/year) ....................
n.a.
Estimate
Year dollar
n.a.
Discount rate
n.a.
n.a.
Period covered
FY 2014–2017.
Qualitative: The rule will ensure that all foods sold to children in school during the school day will meet macronutrient and food group standards
that are consistent with a healthy diet and are based on current nutrition science. The proposed rule will encourage the consumption of foods
such as whole grains, fruit, vegetables, and dairy products that are low in fat and added sugar. By allowing only the sale of competitive foods
that comply with Dietary Guidelines recommendations, this proposed rule aims to promote healthy eating habits.
Quantitative: SFA and State educational agency administrative expenses to comply with the rule’s reporting and recordkeeping requirements.
Annualized Monetized ($millions/year) ....................
1–4
$19.1
$20.3
2012
2012
7%
3%
FY 2014–2017.
Qualitative: The changes in competitive foods offered by schools will likely result in changes in student expenditures on competitive foods (sold
by SFAs and non-SFA school groups). It will also change the extent to which students purchase and consume reimbursable school meals, resulting in changes in amounts transferred from students to school food authorities, and from USDA to school food authorities, for reduced
price and paid meals. We have modeled a number of potential scenarios based on available data to assess impacts of competitive food
standards on overall school food revenue. While they vary widely, each scenario’s estimated impact is relatively small (+0.4 percent to ¥0.7
percent). The data are insufficient to assess the frequency or probability of schools experiencing any specific level of impact.
Alliance for a Healthier Generation.
Available at: http://www.healthier
generation.org/companies.
aspx?ID=3306.
Alliance for a Healthier Generation.
Competitive Food Success Stories.
Posted on University of Missouri
Extension Web site (accessed 6/22/2012).
http://extension.missouri.edu/healthy
life/resources/policydevelopment/Food
BevSuccessStories.pdf.
Alliance for a Healthier Generation. Key
Strategies for Maintaining Revenue while
Changing School Foods for the Better.
Fall 2010. Available at: http://www.
healthiergeneration.org/uploadedfiles/
For_Schools/_New_Builder_Pages/
Resources/10-2237.pdf
Alliance for a Healthier Generation. Moving
the Needle on Competitive Foods. Fall
2010. Available at: http://
www.healthiergeneration.org/
uploadedfiles/For_Schools/
_New_Builder_Pages/Resources/102237.pdf.
ASPE, Health & Human Services. (No Date.)
Childhood Obesity. Assistant Secretary
for Planning and Evaluation, U.S.
Department of Health & Human Services.
Available at: http://aspe.hhs.gov/health/
reports/child_obesity.
Beydoun, M.A. and Y. Wang. 2011. Sociodemographic disparities in distribution
shifts over time in various adiposity
measures among American children and
adolescents: What changes in prevalence
rates could not reveal. International
Journal of Pediatric Obesity, 6:21–35. As
cited in Food Labeling: Calorie Labeling
of Articles of Food in Vending Machines
NPRM. 2011. Preliminary Regulatory
Impact Analysis, Docket No. FDA–2011–
F–0171.
Bullock, S.L., L. Craypo, S.E. Clark, J. Barry,
and S.E. Samuels. 2010. Food and
Beverage Environment Analysis and
Monitoring System: A Reliability Study
in the School Food and Beverage
Environment. Journal of the American
Dietetic Association, 110:1084–1088.
Cawley, J. 2010. The Economics of Childhood
Obesity. Health Affairs, 29:364–371. As
cited in Food Labeling: Calorie Labeling
of Articles of Food in Vending Machines
NPRM. 2011. Preliminary Regulatory
Impact Analysis, Docket No. FDA–2011–
F–0171.
Centers for Disease Control. (No Date).
Implementing Strong Nutrition
Standards for Schools: Financial
Implications. Available at: http://
www.cdc.gov/healthyyouth/nutrition/
pdf/financial_implications.pdf. Accessed
11/6/2012.
Center for Science in the Public Interest
(CSPI), 2007. State School Foods Report
81 The Excel formula for this is PMT(rate, #
periods, PV, 0, 1).
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VI. References
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Card 2007: A State-by-State Evaluation of
Policies for Foods and Beverages Sold
through Vending Machines, School
`
Stores, A La Carte, and Other Venues
Outside of School Meals. Available at:
http://www.cspinet.org/
2007schoolreport.pdf. Access date,
August 15, 2011.
Center for Weight and Health, College of
Natural Resources, and School of Public
Health, University of California,
Berkeley, 2005. LEAF—Linking
Education, Activity, and Food, Pilot
Implementation of SB 19 in California
Middle and High Schools, Fiscal Impact
Report.
Christeson, W., A. D. Taggart, and S.
Messner-Zidell. 2010. Too Fat to Fight.
Mission Readiness: Military Leaders for
Kids. Available at: http://
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[FR Doc. 2013–02584 Filed 2–7–13; 8:45 am]
BILLING CODE 3410–30–P
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Agencies
[Federal Register Volume 78, Number 27 (Friday, February 8, 2013)]
[Proposed Rules]
[Pages 9529-9567]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02584]
[[Page 9529]]
Vol. 78
Friday,
No. 27
February 8, 2013
Part III
Department of Agriculture
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Food and Nutrition Service
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7 CFR Parts 210 and 220
National School Lunch Program and School Breakfast Program: Nutrition
Standards for All Foods Sold in School as Required by the Healthy,
Hunger-Free Kids Act of 2010; Proposed Rule
Federal Register / Vol. 78, No. 27 / Friday, February 8, 2013 /
Proposed Rules
[[Page 9530]]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 210 and 220
[FNS-2011-0019]
RIN 0584-AE09
National School Lunch Program and School Breakfast Program:
Nutrition Standards for All Foods Sold in School as Required by the
Healthy, Hunger-Free Kids Act of 2010
AGENCY: Food and Nutrition Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule proposes to amend the National School Lunch Program
and School Breakfast Program regulations consistent with amendments
made in the Healthy, Hunger-Free Kids Act of 2010 (HHFKA). The HHFKA
requires that the Secretary promulgate proposed regulations to
establish nutrition standards for foods sold in schools other than
those foods provided under the Child Nutrition Act of 1966 (CNA) and
the Richard B. Russell National School Lunch Act (NSLA). The HHFKA
amends the CNA, requiring that such standards shall be consistent with
the most recent Dietary Guidelines for Americans and that the Secretary
shall consider authoritative scientific recommendations for nutrition
standards; existing school nutrition standards, including voluntary
standards for beverages and snack foods; current State and local
standards; the practical application of the nutrition standards; and
special exemptions for infrequent school-sponsored fundraisers (other
than fundraising through vending machines, school stores, snack bars, a
la carte sales and any other exclusions determined by the Secretary).
The HHFKA also amended the NSLA to require that schools participating
in the National School Lunch Program make potable water available to
children at no charge in the place where lunches are served during the
meal service. These proposed changes are intended to improve the health
and well-being of the Nation's children, increase consumption of
healthful foods during the school day and create an environment that
reinforces the development of healthy eating habits.
DATES: Online comments submitted through the Federal eRulemaking Portal
on this proposed rule must be received on or before April 9, 2013.
Mailed comments on this rule must be postmarked on or before April 9,
2013.
Comments on Paperwork Reduction Act requirements: Comments on the
information collection requirements associated with this rule must be
received by April 9, 2013.
ADDRESSES: The Food and Nutrition Service (FNS) invites interested
persons to submit comments on this proposed rule. Comments may be
submitted by either of the following methods:
Federal eRulemaking Portal: Comments on the provisions in
this rule must be received on or before April 9, 2013 to be assured of
consideration. Go to http://www.regulations.gov, select ``Food and
Nutrition Service'' from the agency drop-down menu, and click
``Submit.'' In the Docket ID column of the search results select ``FNS-
2011-0019'' to submit or view public comments and to view supporting
and related materials available electronically. Information on using
Regulations.gov, including instructions for accessing documents,
submitting comments, and viewing the docket after the close of the
comment period, is available through the site's ``User Tips'' link.
By Mail: Mailed comments on the provisions in this rule
must be postmarked on or before April 9, 2013 to be assured of
consideration and should be sent to Julie Brewer, Chief, Policy and
Program Development Branch, Child Nutrition Division, Food and
Nutrition Service, P.O. Box 66874, Saint Louis, MO 63166.
All submissions received in response to this proposed rule will be
included in the record and will be available to the public. Please be
advised that the substance of the comments and the identity of the
individuals or entities submitting comments will be subject to public
disclosure. FNS will also make the comments publicly available by
posting a copy of all comments on http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Julie Brewer, Chief, Policy and
Program Development Branch, Child Nutrition Division, Food and
Nutrition Service, 3101 Park Center Drive, Alexandria, Virginia 22302,
or by telephone at (703) 305-2590.
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose of the Regulatory Action
This proposed rule sets forth provisions to implement sections 203
and 208 of Public Law 111-296, the Healthy, Hunger-Free Kids Act of
2010 (HHFKA) for schools that participate in the National School Lunch
Program (NSLP) and the School Breakfast Program (SBP). This rule
proposes to amend the NSLP and SBP regulations consistent with
amendments made in the HHFKA. The HHFKA requires the Secretary to
promulgate proposed regulations to establish nutrition standards for
foods sold in schools other than those foods provided under the Child
Nutrition Act of 1966 (CNA) and the Richard B. Russell National School
Lunch Act (NSLA). The HHFKA specifies that such nutrition standards
apply to all foods sold (a) outside the school meal programs; (b) on
the school campus; and (c) at any time during the school day. In
addition, the HHFKA requires that such standards be consistent with the
most recent Dietary Guidelines for Americans and that the Secretary
consider authoritative scientific recommendations for nutrition
standards; existing school nutrition standards, including voluntary
standards for beverages and snack foods; current State and local
standards; the practical application of the nutrition standards; and
special exemptions for infrequent school-sponsored fundraisers (other
than fundraising through vending machines, school stores, snack bars, a
la carte sales and any other exclusions determined by the Secretary).
These proposed changes are intended to improve the health and well-
being of the Nation's children, increase consumption of healthful foods
during the school day and create an environment that reinforces the
development of healthy eating habits.
The standards for food and beverages proposed in this rule
represent minimum standards that local educational agencies, school
food authorities and schools would be required to meet. State agencies
and/or local schools would have the discretion to establish their own
standards for non-program foods sold to children should they wish to do
so, as long as such standards are consistent with the final minimum
standards. This rule also proposes to codify a provision of the HHFKA
that requires schools participating in the NSLP to make free, potable
water available to children in the place lunches are served during meal
service.
Summary of Major Provisions
In formulating the proposal, USDA considered the Institute of
Medicine's (IOM) 2007 Nutrition Standards for Foods in Schools: Leading
the Way Toward Healthier Youth report, and reviewed nutrition standards
developed by other entities, including existing State and local
standards, and voluntary standards developed by organizations such as
the Alliance for a Healthier Generation (AHG). Rather than offer a
[[Page 9531]]
single approach, the proposal offers alternatives in several areas and
requests comment on the relative merits of each of the alternatives.
(These are noted below.)
Food Requirements--Under the proposed rule, any food sold in
schools must:
(1) Be either a fruit, a vegetable, a dairy product, a protein
food, a ``whole-grain rich'' grain product (50% or more whole grains by
weight or have whole grains as the first ingredient), or a combination
food that contains at least [frac14] cup of fruit or vegetable; or
(2) Contain 10% of the Daily Value (DV) of a nutrient cited as a
public health concern in the 2010 Dietary Guidelines for Americans
(DGA) (calcium, potassium, vitamin D, or fiber).
Additionally, foods sold must meet a range of calorie and nutrient
requirements:
Total fat must be <=35% of calories; saturated fat must be
<10% of calories; and trans fat must be 0g as stated on the label.
Exemptions are provided for reduced fat cheese; nuts and nut butters
without other ingredients and seafood with no added fat.
Snack items shall contain <=200 milligrams of sodium. For
entr[eacute]e items, sodium levels must be <=480 milligrams per
portion, for non-NSLP/SBP entr[eacute]e items.
For total sugar levels the proposal includes two
alternatives: one is <=35% of calories and the other is <=35% of
weight. Exemptions are provided for fruits and vegetables packed in
juice or extra-light syrup and for certain yogurts.
Snack items have a limit on calories of <=200 calories per
portion. Non- NSLP/SBP entr[eacute]e items have a calorie limit of
<=350 calories.
The proposal includes two alternatives to exempt one set of foods
from the food requirements--NSLP/SBP entrees and side dishes sold a la
carte. The first alternative would subject NSLP/SBP menu items only to
the fat and sugar standards with no restrictions regarding timeframes
for the service of such items sold a la carte. The second alternative
would exempt any menu item served as part of the NSLP or SBP, subject
to specific timeframe restrictions as outlined in the proposed rule
(the day that they are served in a meal or within 4 operating days of
service).
Beverage requirements
Under the proposal, all schools may sell plain water, plain low fat
milk, plain or flavored fat-free milk and milk alternatives permitted
by NSLP/SBP, and 100% fruit/vegetable juice. Portion sizes of milk and
juice vary by the age of students. Elementary schools may sell up to 8-
ounce portions. Middle schools and high schools may sell up to 12-ounce
portions.
Beyond this, the proposal offers additional beverage options in
high schools. These include 20 ounce servings or less for calorie-free,
flavored and/or unflavored carbonated water and other calorie-free
beverages that comply with the Food and Drug Administration (FDA)
standard of <5 cals/serving.
Additionally, the proposal would allow 12 ounce servings of other
beverages within a specified calorie limit. The proposal offers two
alternatives for this limit. The first is <= 40 cals/8 oz serving (or
<= 60 cals/12 oz serving), and the second is 50 cals/8 oz serving (or
75 cals/12 oz serving). Such beverages shall not be available in the
meal service area during the meal service periods.
Accompaniments--The proposal requires accompaniments to be pre-
portioned and offered only when food is sold. In addition,
accompaniments must ``fit'' within the nutrient profile of the food
that they accompany.
Fundraisers--The sale of food items that meet the proposed
nutrition requirements at fundraisers would not be limited in any way
under the proposed rule. However, the law permits USDA to allow for a
limited number of fundraisers to sell food and beverage items that do
not meet the proposed nutrition requirements. Because of the wide
variety of options available with regard to the frequency of fundraiser
exemptions, the proposed rule includes two alternative approaches that
provide discretion to State agencies in determining the frequency with
which such fundraising activities may take place, and requests other
suggestions. The proposed standards would not apply to non-school
hours, weekends and off-campus fundraising events.
Costs and Benefits
The principal benefit of the proposed rule is improvement in public
health. The primary purpose of the proposed rule is to ensure that
competitive foods are consistent with the most recent DGA, effectively
holding competitive foods to the same standards as other foods sold at
school during the school day. The link between poor diet and health
problems (such as childhood obesity) is a matter of particular policy
concern because the relevant health problems produce significant social
costs; imposing nutrition standards on competitive foods is one way to
ensure that children are provided with healthy food options throughout
the school day.
We anticipate the proposed rule will result in significant changes
to the nutritional quality of competitive foods available in schools,
although it is not possible to quantify those benefits on overall diets
or student health. Excess body weight has long been demonstrated to
have adverse health, social, psychological, and economic consequences
for affected adults, and recent research has also demonstrated that
excess body weight has negative impacts for obese and overweight
children. Ancillary benefits, which are also not quantifiable at the
present time, may also be realized by the nutrition standards in the
proposed rule, e.g., improving the nutritional value of competitive
foods will support the efforts of parents to promote healthy choices at
home and at school, reinforce school-based nutrition education and
promotion efforts, and contribute significantly to the overall
effectiveness of the school nutrition environment in promoting
healthful food and physical activity choices.
The proposed rule requires schools to improve the nutritional
quality of foods offered for sale to students outside of the Federal
school lunch and school breakfast programs. The new standards apply to
foods sold [agrave] la carte, in school stores, snack bars, or vending
machines. Upon implementation of the rule, students will face new food
choices from these sources. The new choices will meet standards for
calories, fat, saturated fat, sugar, and sodium, and have whole grains,
low fat dairy, fruits, vegetables, or protein foods as their main
ingredients. Our analysis examines a range of possible behavioral
responses of students and schools to these changes. To estimate the
effects on school revenue, we look to the experience of school
districts that have adopted or piloted competitive food reforms in
recent years. While no State standard aligns to all of the provisions
of the proposed rule, these State programs offer the closest ``real-
world'' analogue to the proposal.
The available information indicates that many schools have
successfully introduced competitive food reforms with little or no loss
of revenue. In some of those schools, losses from reduced sales of
competitive foods were fully offset by increases in reimbursable meal
revenue. In other schools, students responded favorably to the
healthier options, and competitive food revenue increased or remained
at previous levels.
But not all schools that adopted or piloted competitive food
standards fared as well. Some of the same studies and reports that
highlight school success
[[Page 9532]]
stories note that other schools sustained losses after implementing
similar standards. The competitive food revenue lost by those schools
was not offset (at least not fully) by revenue gains from the
reimbursable meal programs.
We present a series of possible school revenue effects in this
analysis that reflect the variation in outcomes across these case
studies, differences in the adopted nutrition standards and
implementation strategies, and differences in the schools' economic
circumstances. This discussion illustrates a range of potential
outcomes; the limited nature of available data and the substantial
variation in school experiences to date prevent any assessment of the
most likely outcome.
The analysis included in the proposed rule examines the possible
effects of the proposed rule on school revenues from competitive foods,
the administrative costs of complying with the rule and the benefits to
school children.\1\ The magnitude of these effects is subject to
considerable uncertainty; the ultimate impact of the rule will be
determined by the manner in which schools implement the new standards
and how students respond.
---------------------------------------------------------------------------
\1\ For simplicity and because the consumption of competitive
foods at breakfast is relatively low compared to the consumption of
competitive foods at lunch, we model the shift from competitive
foods to program meals as one that takes place at lunchtime only.
SNDA-III found that competitive foods were consumed by 29 percent of
NSLP non-participants during the lunch period in SY 2004-2005
(Gordon, et al., 2007, vol. 2, table VI.9, p. 196), but that
competitive foods were consumed by just 5 percent of SBP non-
participants during the breakfast period (vol. 2, table VII.9, p.
264).
---------------------------------------------------------------------------
Background
This rule sets forth proposed provisions to implement sections 203
and 208 of Public Law 111-296, the Healthy, Hunger-Free Kids Act of
2010 (HHFKA), which set conditions on schools that participate in
programs authorized under NSLA and the CNA. The largest of these
programs are the National School Lunch Program (NSLP) and the School
Breakfast Program (SBP). NSLP is available to over 50 million children
each school day; an average of 31.8 million children per day received a
reimbursable lunch in Fiscal Year (FY) 2011. In that same FY, SBP
served an average of 12.1 million children daily. Schools that
participate in the NSLP and SBP receive Federal reimbursement and USDA
Foods (donated commodities) for lunches that meet program requirements.
The level of Federal support provided varies by the household income of
the participating child, with the highest reimbursements to schools for
meals provided free to the children eligible for such meals.
Availability of Water During the Meal Service
Section 203 of the HHFKA amends section 9(a) of the NSLA (42 U.S.C.
(1758(a)) by requiring that schools participating in the NSLP make
potable water available to children at no charge in the place where
lunches are served during the meal service. This is a nondiscretionary
requirement of the HHFKA that became effective October 1, 2010.
There are a variety of ways that schools can choose to implement
this requirement. For example, schools can offer water pitchers and
cups on lunch tables, a water fountain, or a faucet that allows
students to fill their own bottles or cups with drinking water.
Whatever method is chosen, the water must be available without
restriction in the location where meals are served.
While potable water is required to be made available to students,
it is not considered part of the reimbursable meal, and students are
not required to take water. There is no separate funding available for
this provision and reimbursement may not be claimed. However,
reasonable costs associated with providing potable water would be an
allowable cost to the non-profit school food service account. Please
note that this proposed rule would also apply to afterschool snack
service claimed through the NSLP. In addition, while the statute does
not specifically require that potable water be served in the School
Breakfast Program, the availability of water during all meal services
is encouraged.
The Department recognizes that some food service areas and/or
procedures may require significant changes to properly implement this
provision, and guidance has been provided to State agencies to use with
schools. The Department issued an implementation memorandum entitled
``Child Nutrition Reauthorization 2010: Water Availability During
National School Lunch Program Meal Service,'' SP 28-2011, on April 14,
2011, and participated in the Food Research and Action Center's
webinar, ``Strategies for Success: Making the Most of the New School
Water and Milk Requirements,'' on May 24, 2011. On July 12, 2011, SP
28-2011 was revised to provide more detailed guidance in the form of a
series of questions and answers regarding the implementation of the
water requirement. This memorandum is available on the FNS Web site at
http://www.fns.usda.gov/cnd/governance/policy.htm.
State agencies and local school food authorities are reminded that
schools were required to comply with this provision not later than the
beginning of School Year 2011-12. This nondiscretionary requirement is
included in this proposed rule as an amendment to Sec. 210.10(a)(1).
Nutrition Standards for Food Sold in Schools in Competition With School
Meals
Federal child nutrition programs play a critical role in providing
nutritious, balanced meals to children and promoting healthy
lifestyles. Major strides have been made in recent years to improve the
quality of meals served to children through Federal child nutrition
programs. Despite this significant progress, however, considerable work
remains to be done to improve children's diets. Available research has
consistently shown that the diets of children in the U.S. do not meet
current national dietary recommendations for nutrition and health.
Overall, children today have diets that are low in fruits, vegetables,
whole grains, and dairy foods and high in sodium, fat and added sugars.
The 2010 DGA recommend that Americans increase their consumption of
whole grains, but according to the U.S. Department of Health and Human
Services (DHHS) report, Healthy People 2010, only 7 percent of children
ages 2 to 19 years currently meet this recommendation.
The link between poor diets and health problems such as childhood
obesity are a matter of particular policy concern given their
significant social and economic costs. Obesity, in addition to
nutrition and physical activity, has become a major public health
concern in the U.S.\2\ According to data from the National Health and
Nutrition Examination Survey 2007-2008, 34 percent of the U.S. adult
population is obese and an additional 34 percent are overweight (Ogden
and Carroll, 2010). The trend towards obesity is also evident among
children; 33 percent of U.S. children and adolescents are now
considered overweight or obese (Beydoun and Wang, 2011), with current
childhood obesity rates four times higher in children ages 6 to 11 than
they were in the early 1960s (19 vs. 4 percent), and three times higher
(17 vs. 5 percent) for adolescents ages 12 to 19 (IOM, 2007b, p. 24).
These increases are shared across
[[Page 9533]]
all socio-economic classes, regions of the country, and have affected
all major racial and ethnic groups (Olshansky, et al., 2005).
---------------------------------------------------------------------------
\2\ HealthyPeople.gov. ``Nutrition, Physical Activity, and
Obesity. Available at http://healthypeople.gov/2020/LHI/nutrition.aspx?tab=data.
---------------------------------------------------------------------------
Available health research \3\ shows a strong association between
obesity and other chronic diseases, including cardiovascular disease,
hypertension, and diabetes. Cardiovascular disease is the leading cause
of death in America, resulting in 500,000 annual deaths. Risk factors
for cardiovascular disease occur with much greater frequency among
obese children than they do among normal weight children. One quarter
of children ages 5 to 10 show early warning signs for heart disease,
such as elevated blood pressure or high cholesterol.
---------------------------------------------------------------------------
\3\ See, for example, Preventing Childhood Obesity: Health in
the Balance by Jeffrey P. Koplan, Catharyn T. Liverman, and Vivica
A. Kraak (Editors), Committee on Prevention of Obesity in Children
and Youth, Washington, DC: The National Academies Press, 2005.
---------------------------------------------------------------------------
This and other evidence indicates a need to improve the diets of
children. Since a significant portion of calories consumed by children
takes place at school, improving the nutritional profile of all foods
sold in school beyond Federally-reimbursable meals is critical to
improve the diets and overall health of American children more
generally, and to ensure that more children from all income levels
adopt the kind of healthful eating habits and lifestyles that will
enable them to live healthier, more productive lives.
Section 208 of the HHFKA amended Section 10 of the CNA providing
the Secretary new authority to establish nutrition standards for all
foods and beverages sold outside of the Federal child nutrition
programs in schools. Specifically, the HHFKA amended the CNA to require
that the Secretary promulgate proposed regulations to establish
nutrition standards for foods sold in schools other than those foods
provided under the CNA and the NSLA. The provisions specify that the
nutrition standards shall apply to all foods sold (a) outside the
school meal programs; (b) on the school campus; and (c) at any time
during the school day.
The provisions further stipulate that such standards be consistent
with the most recent DGA and that the Secretary consider authoritative
scientific recommendations for nutrition standards; existing school
nutrition standards, including voluntary standards for beverages and
snack foods and current State and local standards; the practical
application of the nutrition standards; and special exemptions for
infrequent school-sponsored fundraisers (other than fundraising through
vending machines, school stores, snack bars, a la carte sales and any
other exclusions determined by the Secretary).
Prior to enactment of the HHFKA, the Secretary's authority to
regulate the types of foods sold in schools was limited to meal pattern
requirements for meals served under NSLP and SBP and other foods sold
in the food service areas during meal periods. Restrictions on the sale
of foods of minimal nutritional value (FMNV) in food service areas
during meal periods are found at 7 CFR 210.11 and 220.12 and Appendix B
to parts 210 and 220. The term ``food service areas'' means any place
where school meals are being served or consumed, including classrooms
and multipurpose rooms that double as cafeterias during meal periods.
The Secretary did not have authority to establish regulatory
requirements for foods sold in other areas of the school campus or at
other times during the school day.
While meals provided through the Federal school meal programs must
meet certain nutritional requirements, schools may also provide foods
and beverages outside of these programs, such as a la carte items in
the school cafeteria as well as those sold through vending machines,
school stores, school fundraisers, and snack bars. These foods are
commonly referred to as ``competitive foods'' because they are sold in
competition with foods offered in school meal programs. The requirement
that local educational agencies have local school wellness policies,
pursuant to Section 9A of the NSLA, 42 USC 1786b, was initially
established in the Child Nutrition and WIC Reauthorization of 2004,
P.L. 108-265, and further strengthened by section 204 of the HHFKA. As
part of local wellness policies, schools are encouraged to establish
their own standards for competitive foods. In many cases, school food
authorities have been very successful in increasing the number of
healthy offerings in the area of competitive food sales and developing
standards for the sale of such foods and beverages in schools; however,
implementation of such policies has been varied. Likewise, voluntary
certification initiatives, such as USDA's HealthierUS School Challenge
(HUSSC) and the Healthy Schools program of the Alliance for a Healthier
Generation, set criteria for competitive foods and beverages when
schools offer them, but not all schools participate.
The goal of both the changes to the nutrition requirements for NSLP
and SBP meals required by the HHFKA and contained in the final rule,
Nutrition Standards in the National School Lunch and School Breakfast
Programs, (77 FR 4088, January 26, 2012), and the standards for
competitive foods outlined in this proposed rule is to improve the
health and well being of the Nation's children, increase consumption of
healthful foods during the school day and to create an environment that
reinforces the development of healthy eating habits.
This proposed rule includes standards for both foods and beverages
sold in schools outside of the Federal child nutrition programs, in
accordance with the intent of the HHFKA. Specifically, the HHFKA
clearly directs the Secretary to consider authoritative scientific
recommendations (which include those for both food and beverages) as
well as existing State, local and other voluntary standards for
beverages and snack foods. All such standards include beverage
standards. In addition, the Secretary's authority to set standards with
regard to reimbursable meals has historically included beverages, so it
is reasonable to believe that in extending this authority to other
foods sold in schools, Congress intended to include beverage standards.
Alternative approaches to several of the proposed provisions are
described in the preamble of this rulemaking and presented in the
proposed regulatory language, in order to solicit public comment on
their merits. Please note that the order in which these alternatives
are presented is not intended to indicate a preferred approach.
Considerations
As previously indicated, the nutrition standards established by the
Secretary must be consistent with the most recent DGA, which, for the
purposes of developing this proposed rule, are the 2010 Dietary
Guidelines for Americans released on January 31, 2011. The guidelines
are available at http://www.cnpp.usda.gov/DietaryGuidelines.htm. In
developing the competitive food standards, the Secretary is also
directed by the HHFKA to consider authoritative scientific
recommendations for nutrition standards; existing school nutrition
standards, including voluntary standards for beverages and snack foods
and State and local standards; and the practical application of the
nutrition standards. As part of USDA's review of authoritative
scientific recommendations for nutrition standards, the Agency gave
consideration to the National Academies' Institute of Medicine's (IOM)
2007 report entitled Nutrition
[[Page 9534]]
Standards for Foods in Schools: Leading the Way Toward Healthier Youth
(available at: http://www.cdc.gov/HealthyYouth/nutrition/standards.htm).
In addition, the Department conducted a broad review of nutrition
standards developed by other entities. These included USDA's HUSSC
standards, existing State and local school nutrition standards for
foods and beverages sold in competition with school meals, and existing
voluntary standards and recommendations that have been developed by
various organizations such as the National Alliance for Nutrition and
Activity and the Alliance for a Healthier Generation.
The Department also solicited input from Federal child nutrition
program stakeholders, including nutrition and health professionals,
academia, industry, interest groups and the public through a variety of
channels. Input gathered from these various sources has served to
assist the Department in formulating the standards and options proposed
in this rule. The practical application of the competitive food
nutrition standards in school settings was a key consideration for all
of the proposed standards. Additionally, over 4,400 schools to date
have been recognized through the HUSSC initiative and have adopted
strong competitive foods policies as part of their application for
recognition. The HUSSC criteria for competitive food policies is based
on IOM recommendations that promote offering competitive food items
that are limited in calories and low in total fat, trans fat, saturated
fat, sugar, sodium, and that also limit the types and portion sizes of
beverages that can be sold in competition with the reimbursable meal.
This proposed rule is predicated on the principle that the present
and future health and well-being of school-age children is profoundly
affected by dietary intake and the maintenance of a healthy weight.
Schools contribute to current and lifelong health and dietary patterns
and are uniquely positioned to model and reinforce healthful eating
behaviors in partnership with parents, teachers, and the broader
community. The practice of food sales in competition with federally-
reimbursable program meals and snacks is widespread. In school year
(SY) 2004-2005, 82 percent of all schools--and 92 percent of middle and
high schools--offered a la carte foods at lunch. Vending machines were
available in 52 percent of all schools and 26 percent of elementary
schools, 87 percent of middle schools and 98 percent of high schools
(Gordon, et al., 2007; SNDA-III, Volume 1, pp 102-114). Because all
foods and beverages available on the school campus represent
significant opportunity for the intake of calories and foods and
nutrients encouraged by the DGA, competitive food standards should be
designed to meet such nutrition recommendations.
Nutrition standards for all foods and beverages sold in schools
should be considered in the context of new meal patterns for the
Federal school meal programs and the goals of improving the nutrition
environment of our Nation's schools. The intent of this proposal is to
support the federally-reimbursed school nutrition programs as the major
source of foods and beverages offered at school and to ensure that all
foods and beverages sold on the school campus during the school day
will contribute to an overall healthful eating environment. These
proposed standards do not exclude any of the USDA NSLP/SBP Meal Pattern
food components or the DGA subgroups as long as the product meets the
general standards proposed for allowable competitive foods. It is
intended that these standards for competitive foods be simple in order
to encourage the inclusion of the ``Foods and Nutrients to Increase''
identified in the 2010 DGA, and that the standards be practical for
application at the school or district level.
The proposed standards and the proposed exceptions to the standards
include numerous areas of consensus and/or consistency among the
various source recommendations that were reviewed. In addition, there
are a number of areas where existing recommendations and/or voluntary
or State/local standards vary considerably in their specific approach
to issues. We carefully considered each of these. As a result, where
appropriate in these areas, the Department has proposed two or more
options for implementing standards and is interested in receiving
comments on which of these options best achieves the objectives of the
DGA while considering the practical application of standards in a
school setting.
Definitions
The HHFKA stipulates that the nutrition standards for competitive
food shall apply to all foods and beverages sold: (a) Outside the
school meals programs; (b) on the school campus; and (c) at any time
during the school day. Therefore, for the purpose of implementing
section 208 of the HHFKA, this rule includes proposed definitions for
``competitive food'', ``school campus'' and ``school day''.
There are many definitions of ``school day'' currently utilized by
schools across the country. In almost every instance, such definitions
apply to the instructional day, rather than to the availability of food
or meal services in schools during the school day. The definitions
proposed in this rule deal exclusively with the application of the
proposed competitive food standards and are intended to have no impact
whatsoever on any definition of instructional day or school campus that
is established by a State or a local educational agency or school for
other purposes. Competitive food is proposed to be defined as all food
and beverages sold to students on the School campus during the School
day, other than those meals reimbursable under programs authorized by
the NSLA and the CNA. School day is proposed to be defined, for the
purpose of competitive food standards implementation, as the period
from the midnight before, to 30 minutes after the end of the official
school day. Finally, School campus is proposed to be defined, for the
purpose of competitive food standards implementation, as all areas of
the property under the jurisdiction of the school that are accessible
to students during the school day.
The intent of the proposed definitions of school day and school
campus is to provide simple and straightforward criteria to ensure that
food that does not meet the standards outlined in this proposed rule is
not sold to students on the school campus during the school day. Given
the many activities, programs and schedules established by schools, it
is not possible to specify in regulations a precise time for the start
of the school day; therefore, this rule proposes that the sale of
competitive food to students be prohibited from the midnight before, to
30 minutes after the end of the official school day (i.e.,
instructional day). Competitive food, school day, and school campus are
defined in Sec. 210.11(a).
In addition, Sec. 210.11(b)(4) of this rule proposes that these
nutrition standards for competitive foods apply to any program
operating in the school on the school campus during the school day that
is serving meals reimbursed under any program authorized under the NSLA
or the CNA. Foods that do not meet the nutrition standards outlined in
this proposal should not be available for sale to students on the
school campus during the school day.
Nutrition Standards for Foods and Beverages
The standards proposed in this rule represent minimum standards
that local
[[Page 9535]]
educational agencies, school food authorities and schools must meet.
State agencies and/or local schools have the discretion to establish
their own competitive food standards should they wish to do so, as long
as such standards are consistent with the final minimum standards. This
option is included in Sec. 210.11(b)(1) of the proposed rule.
Competitive food standards apply to all age groups of students.
Additionally, the proposed rule includes separate standards for foods
and beverages.
General Nutrition Standards for Competitive Foods
The IOM in their report entitled Nutrition Standards for Foods in
Schools: Leading the Way Toward Healthier Youth categorized food and
beverages into two tiers, based on the extent of their consistency with
the DGA. Tier 2 foods are not relevant to this proposal since such
foods are those recommended to only be served to high school students
after the school day. Tier 1 foods and beverages are consistent with
``foods to be encouraged'' as defined in the DGA and are the basis for
many of the provisions of this proposed rule. IOM Tier 1 foods are
defined as fruit, 100% fruit and vegetable juices, vegetables, whole
grains and related combination products, and nonfat and low-fat dairy
products and NSLP food items that are part of the reimbursable meal
that are also sold a la carte that meet fat and sugar limits outlined
in the IOM report. This proposed rule is generally consistent with the
IOM standards and the DGA in that it permits the sale of Tier 1 foods
as well as additional foods containing a significant amount of one of
the four nutrients of public health concern, and/or fruits/vegetables.
To be an allowable competitive food in schools, an item shall:
(1) Meet all of the proposed competitive food nutrient standards;
and
(2) Be a grain product that contains 50 percent or more whole
grains by weight or have whole grains as the first ingredient or be one
of the non-grain main food groups as defined by the 2010 DGA: a fruit,
vegetable, dairy product, protein food (meat, beans, poultry, seafood,
eggs, nuts, seeds, etc.); or
(3) Contain 10 percent of the Daily Value (DV) of a naturally
occurring nutrient of public health concern from the DGA (e.g.,
calcium, potassium, vitamin D or dietary fiber); or
(4) Be a combination food that contains at least \1/4\ cup of fruit
or vegetable.
This proposal stipulates that, in cases in which water is the first
ingredient listed for a food item, the second ingredient must be one of
the above. Below is a brief summary chart depicting the proposed
standards contained in this rule. A thorough discussion of each
standard follows.
Proposed Competitive Foods Standards
------------------------------------------------------------------------
Exemptions to the
Food/nutrient Standard standard
------------------------------------------------------------------------
General Standard for To be allowable, a Fresh,
Competitive Food. competitive FOOD frozen and canned
item must: fruits and
(1) meet all of the vegetables with no
proposed added ingredients
competitive food except water or, in
nutrient standards; the case of fruit,
and. packed in 100%
(2) be a grain juice or extra
product that light syrup, exempt
contains 50% or from all proposed
more whole grains nutrient standards.
by weight or have
whole grains as the
first ingredient or
be one of the non-
grain main food
groups: a fruit,
vegetable, dairy
product, protein
food (meat, beans,
poultry, seafood,
eggs, nuts, seeds,
etc.), or.
(3) contain 10% of
the Daily Value
(DV) of a naturally
occurring nutrient
of public health
concern (i.e.,
calcium, potassium,
vitamin D or
dietary fiber) or;.
(4) be a
combination food
that contains at
least \1/4\ cup
of fruit or
vegetable.
If water is the ....................
first ingredient,
the second
ingredient must be
one of the above.
NSLP/SBP Entrees and Side Alternative A1: NSLP/
Dishes Sold A la Carte. SBP entrees and
side dishes sold a
la carte exempt
from all standards
except the fat and
sugar standards (<=
35% of total
calories from fat
or <= 35% of
calories or weight
from total sugar
(See Alternative C1
and C2)) ; or
Alternative A2: NSLP/ ....................
SBP entrees and
side dishes (except
grain based dessert
products) sold a la
carte exempt from
all standards.
Alternatives B1 and
B2 describe two
approaches to the
timing of service
associated with
this exemption.
Grain Items................. Acceptable grain ....................
products must
include 50% or more
whole grains by
weight or have
whole grains as the
first ingredient.
Total Fats.................. Dietary fat per Reduced fat
portion as cheese;
packaged: <= 35% of Nuts and
total calories from seeds and nut/seed
fat per portion as butters. Exemption
packaged. does not extend to
combination
products that
contain nuts, nut
butters or seeds or
seed butters with
other ingredients
such as peanut
butter and
crackers, trail
mix, chocolate
covered peanuts,
etc.;
Products
consisting of only
dried fruit with
nuts and/or seeds
with no added
nutritive
sweeteners or fat;
Seafood
with no added fat.
Saturated Fats.............. < 10% of Reduced fat
total calories per cheese
portion as packaged.
Trans Fats.................. Zero grams ....................
of trans fat per
portion as packaged
(<= 0.5 g per
portion).
[[Page 9536]]
Sodium...................... Snack and
side items: <= 200
mg sodium per
portion as packaged
for non NSLP/SBP
snack items;
....................
Entr[eacute]e
items: <= 480 mg
sodium per portion
for non-NSLP/SBP
entr[eacute]e items.
Total Sugars................ Alternative Fresh,
C1: <= 35% of frozen and canned
calories from total fruits/vegetables
sugars in foods; or with no added
Alternative sweeteners except
C2: <= 35% of for fruits packed
weight from total in 100% juice or
sugars in foods. extra light syrup;
Dried whole
fruits/vegetables,
dried whole fruit/
vegetable pieces;
and dried
dehydrated fruits/
vegetables with no
added nutritive
sweeteners.
Lowfat/
nonfat yogurt with
less than 30 grams
of sugar per 8
ounces.
Calories.................... <= 200
calories per
portion as packaged
including any added
accompaniments such
as butter, cream
cheese, salad
dressing etc. for
non NSLP/SBP snack
items and side
dishes sold a la
carte;.
<= 350 ....................
calories for non
NSLP/SBP
entr[eacute]e items
sold a la carte.
Accompaniments.............. Use of ....................
accompaniments
should be limited
when food is sold
to students in
school. All
accompaniments
shall be pre-
portioned and must
be included in the
nutrient profile as
a part of the item
served and meet all
proposed standards;
Caffeine.................... Elementary and ....................
Middle School
Foods and beverages
must be caffeine-
free, with the
exception of trace
amounts of
naturally-occurring
caffeine
substances. No
caffeine
restriction for
high school
students.
Beverages................... Elementary School...
No
caffeinated
beverages;
Plain water
(no size limit);
Low fat
milk, plain (<= 8
oz);
Non fat
milk, plain or
flavored (<= 8 oz),
including
nutritionally
equivalent milk
alternatives as
permitted by the
school meal
requirements; and
100% fruit/
vegetable juice (<=
8 oz).
Middle School.......
No
caffeinated
beverages;
Plain water
(no size limit);
Low fat
milk, plain (<= 12
oz);
Non fat
milk, plain or
flavored (<= 12 oz)
including
nutritionally
equivalent milk
alternatives as
permitted by the
school meal
requirements; and
100% fruit/
vegetable juice (<=
12 oz).
High School.........
Plain water
(no size limit);
Low fat
milk/plain (<= 12
fl. oz.);
Non fat
milk, plain or
flavored (<= 12 fl.
oz.), including
nutritionally
equivalent milk
alternatives as
permitted by the
school meal
requirements;
100% fruit/
vegetable juice (<=
12 fl. oz.);
Calorie-
free, flavored and/
or unflavored,
caffeinated or non-
caffeinated
carbonated water
allowed (<= 20fl.
oz), but not during
the meal service
periods;
Other
calorie free
caffeinated or non-
caffeinated
beverages that
comply with the FDA
standard of less
than 5 kcals/
serving. (<= 20 fl.
oz.), allowed, but
not during the meal
service periods;
and
Alternative
D1: Other
caffeinated or non-
caffeinated
beverages (<= 40
calories/8 oz
serving or <= 60
calories/12 oz
serving) in <= 12
oz servings
allowed, but not
during the meal
service periods; or.
Alternative
D2: Other
caffeinated or non-
caffeinated
beverages (<= 50
calories/8 oz or <=
75 calories/12 oz
serving) in <= 12
oz servings, but
not during the meal
service periods.
------------------------------------------------------------------------
[[Page 9537]]
The following discussion outlines the nutrition standards for
allowable competitive foods as proposed in this rule at Sec. 210.11.
General Exemption of NSLP and SBP Entrees and Side Dishes
This rule proposes two alternatives by which any menu item (both
entrees and side dishes) provided as part of the NSLP and/or SBP school
meal would be exempt from all or some of the proposed competitive food
nutrition standards, with the exception of grain based dessert products
which must meet all standards in order to be served.
The first alternative (A1) would align such an exemption with the
IOM recommendations related to NSLP and SBP menu items. If items are
served in the reimbursable meal, they would be exempt from all of the
proposed nutrition standards except they would still have to meet the
limits on fat and sugar. As discussed later in this preamble, the
proposed limit for fat is <=35% of total calories from fat per portion
as packaged. For sugar, two alternatives are proposed: Alternative C1:
<=35% of calories from total sugars in foods; or Alternative C2: <= 35%
of weight from total sugars in foods. The purpose of including this
alternative for meals is to ensure that the improvements that will
result from the updated nutrition standards would not be undermined.
The second alternative (A2) would exempt all menu items provided as
part of the NSLP or SBP reimbursable meal from the proposed competitive
food standards, with the exception of grain based dessert products
which must meet all standards in order to be served. For this
alternative, the rule also proposes two alternatives for comment with
regard to the frequency of allowable sale of the NSLP/SBP menu items as
competitive foods which are described as Alternatives (B1) and (B2)
below. These NSLP/SBP menu items would have to be served in the same or
smaller portion sizes as in the NSLP or SBP to be allowable. In
general, the proposed exemption for NSLP/SBP menu items supports the
new school meal patterns and the concept of school meals as being
healthful.
The first alternative proposed regarding the frequency of allowable
service of the exempted NSLP/SBP menu items (B1) would allow an
exemption to the proposed nutrient standards for competitive foods for
NSLP and SBP menu items on the same day that the items were served in
the school meals program. While this may limit flexibility for the
school food service and prevent the service of some leftover entrees
and/or side dishes during the menu cycle, this option would alleviate
concerns regarding the frequency with which particular food items are
available.
The second alternative (B2) would allow an exemption to the
proposed nutrient standards for competitive foods for NSLP and SBP menu
items served within four operating days of service in the programs.
This option provides an increase in flexibility for the school food
service.
The Department seeks comments on these alternatives, identified at
Alternatives B1and B2 in Sec. 210.11(c)(3) of the proposed rule.
Naturally Occurring Nutrients
One of the general standards proposed in this rule is that, in
order to be allowable, food items must contain 10% of the Daily Value
(DV) of a naturally occurring nutrient of public health concern:
calcium, potassium, vitamin D, and dietary fiber. Including the 10% DV
as a method to determine the foods that may be sold in schools
encourages consumption of these nutrients.
The Department is interested in receiving comments from the public
as to whether or not food items that contain only naturally occurring
nutrients should be allowed in this rule, or whether food items to
which specific nutrients of concern have been added should also be
allowable.
For example, if only naturally occurring nutrients were specified,
a product may be formulated to have 10% calcium by including
ingredient(s) in the product formulation that are naturally high in
calcium such as non-fat dry milk solids, or cheese. Obviously, the
ingredient(s) used and the amount needed would vary depending on the
product and may not be feasible for some products, but the nutrients
from these ingredients would be included in meeting the 10% DV level.
Using this method would not allow the addition of the discrete nutrient
(many forms exist for the addition of calcium to food, such as
tricalcium phosphate, calcium citrate malate, calcium lactate, etc.) to
count toward meeting the 10% DV requirement. The rationale to limit the
products to the naturally occurring nutrients is to limit the
consumption of products to which specific nutrients of concern have
been added and encourage consumption of whole foods or foods closer to
their whole state as encouraged by the DGA. One concern with this
approach is that schools may not be able to recognize when a specific
nutrient of concern has been added to a product or when the nutrient is
naturally occurring. Fortifications are often not highlighted on the
label and the nutrient facts panel does not currently make any
distinction between naturally occurring nutrients and those nutrients
available in a food through fortification. This requirement may be
found in Sec. 210.11(c)(2)(iv) of the proposal.
Combination Foods
Since many of the foods available to students contain a combination
of ingredients, for the purposes of this proposal, combination foods
are defined as products that contain two or more components that
represent two or more of the recommended food groups as specified in
the DGA (fruit, vegetable, dairy, protein or grains). This proposed
definition may be found at Sec. 210.11(a)(4).
Fruits and Vegetables
To be consistent with both the DGA and the IOM recommendations,
this rule proposes that fresh, frozen and canned fruits and vegetables
with no added ingredients except water or, in the case of fruit, packed
in 100 percent juice or extra light syrup, be exempt from all the
nutrient standards included in this rule. According to the DGA, fruits
and vegetables are nutrient dense; greater consumption of such foods in
the diet is encouraged. This provision is included at Sec. 210.11(d)
of this proposed rule.
Grain Items
This rule proposes that acceptable grain products must include
whole grains. To qualify as an allowable competitive food, grain
products shall meet at least one the following criteria as well as meet
all of the proposed nutrient standards:
(1) Contain 50% or more whole grains by weight; or
(2) Have whole grains as the first ingredient.
This standard is consistent with the DGA recommendations, the NSLP
meal pattern standards and the HUSSC whole grain requirement. It is
also practical because it can be easily identified by reading a product
label. This provision is included at Sec. 210.11(e).
Total Fats
To qualify as an allowable competitive food, this proposal
specifies that not more than 35 percent of the total calories per
portion as packaged shall be derived from fat. Nuts and seeds, peanut
and other nut butters, seafood, and reduced fat cheese would be exempt
from this standard. This standard is identical to the IOM
recommendation for total fats. However,
[[Page 9538]]
the Department is proposing to allow the following exemptions to the
total fat limitation. Please note that requirements and exemptions
other than total fat mentioned below are discussed later in this
preamble under the applicable section.
(1) Reduced fat cheese is exempt from the total fat and saturated
fat standard, but subject to the trans fat, calorie, sugar and sodium
standards. The exemption for reduced fat cheese is based primarily on
the availability of lower fat cheeses that children find palatable and
the recognition that reduced fat cheese is a source of calcium, a
nutrient of concern, and contributes to overall bone health. In
addition, this exemption is consistent with voluntary standards that
have been reviewed during the course of developing this proposal.
(2) Nuts and seeds and nut/seed butters are exempt from the total
fat standard, but subject to the saturated fat, trans fat, calorie,
sugar, and sodium standards. This exemption does not extend to
combination products that contain nuts, nut butters or seeds or seed
butters with other ingredients such as peanut butter and crackers,
trail mix, chocolate covered peanuts, etc. This exemption from the
total fat standard allows the inclusion of nuts and seeds within
reasonable calorie amounts. Without such an exemption, nuts and seeds
could not be sold alone without being combined with some other product
like added sugars or refined grain, which is not the intent of these
competitive food nutrition standards. Nuts, seeds and nut/seed butters
are nutrient-dense, good sources of monounsaturated and polyunsaturated
fatty acids, some of which are essential, and are sources of many
vitamins and minerals, as well as dietary fiber. In addition, ensuring
the allowance of nuts and seeds provides a shelf stable, vegetarian-
friendly protein source.
(3) Products that consist of only dried fruit with nuts and/or
seeds with no added nutritive sweeteners or fat are exempt from the
total fat and sugar standard; but are subject to the saturated fat,
trans fat, calorie and sodium standards, for reasons similar to those
cited above. In addition, dried fruit has the same nutritional benefits
of fruits and will assist in helping children meet their daily fruit
requirements.
(4) Seafood with no added fat is exempt from the total fat
requirement in order to increase omega-3 fatty acids; but still subject
to the proposed sugar, saturated fat, trans fat, calorie and sodium
standards.
In summary, reduced fat cheese, nuts, seeds and nut/seed butters
and dried fruit are popular food items among school-aged children and
can make a positive contribution to overall health, especially since
these food items must meet the other nutrient standards proposed. These
provisions may be found at Sec. 210.11(f).
Saturated Fats
To qualify as an allowable competitive food, it is proposed that
less than 10% of the total calories per portion of a food be derived
from saturated fats. Cheese is exempt from the total fat and saturated
fat standard if it is reduced fat cheese, as discussed above. However,
such reduced fat cheese products remain subject to the proposed
calorie, trans fat, sugar and sodium standards outlined in this
rulemaking. This standard is also consistent with the DGA and may be
found in Sec. 210.11(g) of this proposed rule.
Trans Fats
It is proposed that allowable competitive foods contain zero grams
trans fat per portion as packaged (not more than 0.5 g per portion).
This standard is identical to the IOM and DGA recommendations and may
be found in Sec. 210.11(h) of this proposed rule.
Total Sugars
This proposed rule provides two alternatives for comment regarding
total sugars in foods. Alternative C1 requires that in order to be
considered an allowable competitive food item, no more than 35% of
calories shall be derived from total sugars in foods. This is identical
to the recommendation made by the IOM. Alternative C2 requires that
allowable competitive food items shall not contain more than 35% of
their weight from total sugars in foods. This standard was included in
a number of voluntary standards that were reviewed during the
development of this proposed rule. The calculations associated with
these two alternatives differ. Generally, when sugar by weight is
utilized, foods with a higher percentage of calories from total sugar
would be allowable as competitive foods in schools. This may also
result in an increase in the number/types of foods which may be sold in
schools, particularly with regard to dairy products such as ice cream.
The Department requests comment on these alternatives.
In addition, ideally, the sugar standard would apply to the added
sugars in foods, since added sugars are identified in the 2010 DGA as a
food component to reduce. However, because the Nutrition Facts label
does not differentiate between added and naturally occurring sugars in
foods and beverages, a standard limiting total sugars is the most
reasonable standard. Regardless of which measure (total sugars by
weight or calories) is utilized, this proposed rule includes the
following exemptions to this requirement:
(1) Dried whole fruits or vegetables; dried whole fruit or
vegetable pieces; and dried dehydrated fruits or vegetables with no
added nutritive sweeteners are exempt from the sugar standard, but are
subject to the calorie, total fat, saturated fat, trans fat and sodium
standards;
(2) Products that consist of only dried fruit with nuts and/or
seeds with no added nutritive sweeteners or fat are exempt from the
total fat and sugar standard, but are subject to the calorie, trans
fat, saturated fat and sodium standards; and
(3) Flavored and unflavored nonfat and low-fat yogurt with no more
than 30 grams of total sugars per 8 ounce serving are exempt from the
sugar standard, but are subject to the calorie, total fat, saturated
fat, trans fat and sodium standards.
The exemption from the total sugar standard proposed in items (1)
and (2) above has been made since those food items are nutrient dense
and contribute to total intake of fruit and vegetables, which has been
identified in the 2010 DGA as a food group targeted for increased
consumption. Since the water has been removed from dried products
during processing, it is more calorically dense than fresh fruits and
vegetables. For this reason, the calorie standards are proposed to
apply to dried fruits and dried vegetables as well as dried fruits
mixed with nuts and/or seeds. We acknowledge that for certain dried
fruit products, the addition of nutritive sweeteners may be necessary
for processing and palatability (i.e. cranberries). Therefore we are
requesting feedback from commenters on whether the standard should
include specific dried fruit products that require nutritive sweeteners
in the total sugars exemption.
The proposed sugar standards are found in Sec. 210.11(i).
Sodium
This rule proposes that allowable entr[eacute]e items contain no
more than 480 mg sodium per portion as served. This standard is
identical to the IOM recommendation for entrees.
For purposes of this proposed rule, an entr[eacute]e item is
proposed to be defined in Sec. 210.11(k) as an item that includes only
[[Page 9539]]
the following three categories of main dish food items:
(1) A combination food of meat or meat alternate and whole grain-
rich bread (for example, turkey sandwich, peanut butter on grain-rich
bread, pizza with whole grain-rich crust, hot dog or hamburger on a
grain-rich bun, a bean and cheese burrito, nachos with chili and
cheese);
(2) A combination food of vegetable or fruit and meat or meat
alternate (for example, chef's salad, fruit and cheese platter, chicken
vegetable stir-fry); or
(3) A meat or meat alternate alone (e.g., fish filet, Salisbury
steak, seafood, egg or chicken) with the exception of yogurt, low-fat
or reduced fat cheese, nuts, seeds and nut or seed butters. This
exception is being proposed since yogurt, cheese, nuts, seeds and nut
or seed butters alone are generally considered to be snack or dessert
items, not entr[eacute]e items.
The Department is proposing that allowable snack items contain no
more than 200 mg of sodium per portion as packaged. This standard
reflects the IOM recommendation with regard to snack items.
In addition, as previously discussed, this rule proposes to exempt
any items sold as part of the school meal during specified periods from
all or most (except total fat and sugar) competitive food standards
(Sec. 210.11(c)(3)). The proposed sodium standards are found in Sec.
210.11(j) and (k).
Calories
This rule proposes that, to be considered allowable, snack items
shall contain no more than 200 calories per portion as packaged
including any added accompaniments such as butter, cream cheese, salad
dressing etc. A la carte snack items/side dishes served in the same or
smaller portion size as served in the NSLP or the SBP during specific
periods would be exempt from this calorie restriction.
This proposed rule stipulates that entr[eacute]e items sold a la
carte shall contain no more than 350 calories per portion as served and
meet all of the other nutrition standards specified.
However, consistent with the sodium standard exemption, this rule
proposes to exempt entr[eacute]e items from this calorie requirement if
the entr[eacute]e items sold a la carte are NSLP or SBP entrees that
are to be offered during specific periods as part of the reimbursable
school meal and are served in the same or smaller portion size as
offered in the NSLP or SBP (Sec. 210.11(c)(3)). The proposed calorie
standards are found in Sec. 210.11(j) and (k).
Caffeine
This rule proposes that competitive foods and beverages served to
elementary and middle school-aged children must be caffeine-free, with
the exception of trace amounts of naturally occurring caffeine
substances. This standard is consistent with the IOM recommendation. In
the IOM report, it was concluded that although there may be some
benefits associated with caffeine consumption among adults, offering
foods and beverages containing significant amounts of caffeine to
school aged children was not appropriate due to the potential for
adverse effects, including physical dependency and withdrawal. Caffeine
is not proposed to be restricted for high school-aged students. Given
the practical realities and market for caffeinated beverages enjoyed by
high school aged students, it was not deemed practical to restrict
caffeinated beverages for this age group. However, the Department does
request comments on this exception for high school students. This
proposed provision may be found at Sec. 210.11(l).
Beverages
In developing proposed standards for beverages sold in competition
with school meals, the Department is proposing standards for allowable
beverage types that are consistent with the IOM recommendations for
elementary and middle school students, but which allow a greater
variety of beverages for sale to high school students. Specifically,
calorie-free, flavored and/or carbonated water, and low-calorie (less
than 40 or 50 calories per 8 ounces) beverages are allowed for high
school students, but not allowed for elementary or middle school
students. This approach recognizes the wide range of beverages
available to high school students in the broader marketplace and the
increased independence such students have, relative to younger
students, in making consumer choices. Given those circumstances, the
Department considers it reasonable to provide high school students a
broader range of choices, while still limiting those choices to those
which are more nutrient dense and/or lower in calories than other
options. Elementary and middle school students may develop healthier
habits because of this limitation.
The proposed rule also specifies allowable beverages and maximum
portion sizes for such beverages. The proposed beverage standards
provide consistent sizes for each age group.
The proposed beverage requirements are:
Elementary School:
Plain water (no size limit);
Low fat milk, plain (not more than 8 fluid ounces);
Non fat milk, plain or flavored (not more than 8 fluid
ounces);
Nutritionally equivalent milk alternatives as permitted by
the school meal requirements (not more than 8 fluid ounces); and
100% fruit/vegetable juice (not more than 8 fluid ounces)
Middle School:
Plain water (no size limit);
Low fat milk, plain (not more than 12 fluid ounces);
Non fat milk, plain or flavored (not more than 12 fluid
ounces);
Nutritionally equivalent milk alternatives as permitted by
the school meal requirements (not more than 12 fluid ounces); and
100% fruit/vegetable juice (not more than 12 fluid
ounces);
High School:
Plain water (no size limit);
Low fat milk, plain (not more than 12 fluid ounces);
Non fat milk, plain or flavored (not more than 12 fluid
ounces);
Nutritionally equivalent milk alternatives as permitted by
the school meal standards (not more than 12 fluid ounces);
100% fruit/vegetable juice (not more than 12 fluid
ounces);
Calorie-free, flavored and/or carbonated water (not more
than 20 fluid ounces) allowed, but not in the meal service area during
meal service periods;
Other beverages (not more than 20 fluid ounces) that
comply with the FDA requirement for bearing a ``calorie free'' claim of
less than 5 kcals/serving allowed, but not in the meal service area
during meal service periods; and
Other beverages in <= 12 oz servings allowed, but not in
the meal service area during the meal service periods. Two alternatives
are proposed. The first (D1) would allow 40 calories per 8 ounce
serving of beverages (or no more than 60 calories per 12 ounce serving
of such beverages) for high school students. The second (D2) would
allow 50 calories per 8 ounce serving of beverages (or no more than 75
calories per 12 ounce serving of such beverages) for high school
students. The slightly higher calorie limit would allow a broader range
sports drinks to be purchased.
The beverage standards proposed in this rule are consistent with
most currently established voluntary standards regarding the types of
beverages sold to students on campus
[[Page 9540]]
during the school day. However, the package/container sizes for 100%
juice and milk as proposed in this rule are larger than those
recommended by the IOM in its report on nutrition standards for food in
schools (IOM did not recommend allowing any amount of other caloric
beverages aside from juice and milk). The amounts of 100% juice and
milk proposed for elementary and middle schools are also higher than
the voluntary standards set by the Alliance for a Healthier Generation.
The American Academy of Pediatrics recommends limiting 100 percent
juice for children 7 to 18 years old to 8 to 12 ounces per day. Under
the interpretation of the new meal pattern requirements there is no
juice limit per day but rather per week. The Dietary Guidelines
Advisory Committee Report states that limited and inconsistent evidence
suggests that for most children, intake of 100 percent fruit juice is
not associated with increased fat, when consumed in amounts that are
appropriate for age and energy needs of the child. The DGA 2010
recommends that most of one's fruit choices should be whole or cut-up
fruit, rather than juice, for the benefits that dietary fiber provides.
Most children 9 years and older consume less than one cup of milk
per day. While allowing package sizes for milk up to 12 ounces for
secondary school students does contribute extra calories, it also
provides children with needed calcium, vitamin D and potassium and
could help move children's consumption of Dairy foods closer to dietary
recommendations.
As indicated previously, the rationale behind the approach taken in
this proposed rule is the practical recognition of current packaging
practices.
However, the Department realizes that there would be an increase in
calories and added sugars incurred by allowing larger package sizes and
welcomes public comments on the proposed beverage amounts.
These proposed provisions are found in Sec. 210.11(b)(2) and Sec.
210.11(m).
Fundraisers
School-sponsored fundraisers are recognized as reasonable
enhancements to the school community as well as a method of financing
some important school-sanctioned activities for students. The sale of
food items that meet the proposed nutrition requirements (as well as
the sale of non-food items) at fundraisers would not be limited in any
way under the proposed rule. In addition, the proposed standards would
not apply to food sold during non-school hours, weekends and off-campus
fundraising events such as concessions during after-school sporting
events. Further, the proposed standards would not apply to food or
beverages sold on school grounds, during school hours at ``a limited
number'' of school fundraisers. The determination of what constitutes
``a limited number'' will be decided by the state agencies under one of
two alternative approaches. It is expected that state agencies will
ensure that the frequency of such fundraisers on school grounds, during
school hours does not reach a level to impair the effectiveness of
nutrition requirements described in this rule. With respect to other
non-exempted fundraising activities during the school day (including
fundraising through vending machines, school stores, snack bars, a la
carte sales, and other similar activities as determined by the
Secretary), the food and beverage items sold must meet the proposed
nutrition standards for competitive foods.
The Department is especially interested in obtaining input from the
public on this particular provision. This proposed rule includes two
alternative approaches to exemptions to the competitive food standards
for school-sponsored fundraisers, as well as a request for other
suggestions from commenters. In addition, since the Department does not
have detailed data regarding fundraising activities at schools,
especially with regard to the types, frequency, restrictions during
meal time, etc., that have been established by schools, commenters may
also wish to provide input in this area.
The first alternative is to allow State agencies the discretion to
establish limitations on the number of exempt fundraisers that may be
held during the school year. The second alternative is to allow State
agencies to set exempt fundraising frequency standards, subject to USDA
approval.
Suggested timeframes from commenters for the conduct of exempt
fundraisers in schools are also welcome. The two alternative approaches
discussed above are included in Sec. 210.11(b)(5).
Regardless of the approach ultimately adopted by the Department in
a final rule, it is important to note that individual States and/or
school districts may implement more restrictive competitive food
standards, including those related to the frequency with which exempt
fundraisers may be held in schools.
As stated above, this rule does not propose standards for frequency
of school-sponsored fundraisers that provide foods or beverages that
meet the nutrition standards for competitive foods. The limitations in
this rule would deal only with those school-sponsored fundraisers that
are exempt from the competitive food nutrition standards. However, the
proposal does prohibit the sale of specially exempted fundraiser foods
and beverages during the school meal service so as not to compete with
the school meal.
Other Proposed Standards
Accompaniments
To reduce the added sodium, fats and sugars in food available and
served to students during the school day, it is proposed that the use
of accompaniments be limited when food is sold to students in school.
All accompaniments shall be pre-portioned and must be included in the
nutrient profile as a part of the item served as well as meet all of
the proposed standards. For example, dressings served with salads,
butter or jelly on muffins, cream cheese with a bagel and garnishes
shall be pre-portioned in amounts appropriate to ensure that the
competitive food standards are met and shall be included in the
nutrient profile of the item. The Department seeks comment on the
impact that such a requirement may have on competitive food service in
schools. This proposed provision is found in Sec. 210.11(n).
Foods of Minimal Nutritional Value (FMNV)
This rule requires that all food and beverages available and served
to students meet the specific standards for competitive foods outlined
in this proposed rule. It is no longer necessary, therefore, to retain
the more narrowly defined standards for food of minimal nutritional
value included in the current regulations. Accordingly, the proposal
would remove the definition of ``food of minimal nutritional value''
from 7 CFR part 210 and the definition of ``foods of minimal
nutritional value'' from 7 CFR part 220, and make other conforming
changes in both of these parts.
Summary of General Impacts of the Proposed Competitive Food Standards
As proposed in this rule, all food and beverage products are
subject to each of the proposed competitive food standards, with some
specific exemptions for food items to be encouraged. Many existing
products, particularly those encouraged by the Dietary Guidelines,
would be available without restriction under these standards. Many
products that would not meet these standards under current product
formulations and package sizes
[[Page 9541]]
could meet the standards with changes to product packaging size or
product formulation. In some cases, necessary formulation changes would
be relatively modest (e.g., adding or increasing whole grains in
certain products), while in others, more significant changes would be
required in order for a product to meet the competitive food standards.
Some products may also be able to meet the standards by modifying
packaging; for example, reducing existing single-serving packages to
meet calorie or sodium requirements. Finally, there are some products,
such as those in which sugar is the primary ingredient, for which it is
unlikely that changes could modify the product in a way that would
allow the product to comply with the competitive food standards. Such
products include soft drinks that contain sugar and/or caffeine
(proposed to be restricted for elementary and middle school students),
candy and other confections, whole milk, jams, jellies, certain dessert
items as well as certain fruit products that contain added sugars.
Snack foods such as chips and other bagged snack items would most
likely be most impacted by the proposed sodium, calorie and fat
standards, as well as the requirement that the item contain 50% or more
whole grains, or have its first ingredient be a whole grain or other
food to encourage as recommended by the DGA. As currently packaged,
many baked tortilla chips, reduced fat corn chips and baked potato
chips would meet the proposed standards and would be allowed. However,
other snack products as currently packaged and formulated, such as
regular corn chips, cheese puffs and many flavored popcorn snack items
would not meet the standards.
Grain based dessert items such as cookies, snack bars, pastries and
cakes would likely be most impacted by the proposed grain, sugar, fat,
and calorie standards. As currently packaged, many low-fat granola bars
could be sold, while many cereal bars, cookies, and snack cakes
currently contain too much sugar to meet the proposed standards. A
number of other popular products, such as certain sweet snack crackers,
may be able to meet the standards if such items are reformulated to
increase the amount of whole grains they contain.
Fruit-based products with relatively limited amounts of added sugar
or other products would be allowed. For example, some frozen fruit
treats have water and fruit as their first ingredients and are below
the sugar limits. However, many other fruit snacks and fruit beverages
that have added ingredients would be limited by sugar and calorie
limits. For example, nearly half of the calories contained in most
gummy fruit snack and fruit roll-up type products are derived from
sugar. Similarly, many frozen fruit popsicles or sorbet products have
water and sugar as their first ingredients and, as such, would not meet
the proposed standards.
Dairy snack products are most impacted by the proposed fat, sugar,
and sodium standards included in this rule. Some frozen dairy products,
puddings, etc, as currently formulated would meet the proposed
standards, while others would not. However, most low fat/nonfat yogurt
products will meet the standards due to the total sugar exemption
proposed in this rule.
In addition, low fat cheeses are proposed to be exempt from the fat
standards, and many lower-sodium cheese products would qualify.
Beverages, other than milk, would be limited by calorie and
caffeine standards. While regular soda would not be allowed, diet sodas
would be permitted in high schools in 20 oz. containers. Zero calorie
versions of sport drinks or fitness waters would also be allowed in
high schools in 20 oz. portions, as would 12 oz. portions of sports
drinks or other beverages with 40 calories per 8 oz. (Alternative D1)
or 50 calories per 8 oz (Alternative D2)In evaluating the impacts of
this proposed rule, the Department has also considered the impacts of
these changes on the vendors that supply food items, including
competitive food items, to schools for sale outside of the Federal
school meal programs. The proposed rule may require a number of SFA's
to significantly change the food items that are offered for sale on
school grounds. However, from the date of publication of this proposed
rule, SFA's and their vendors will have significant time to prepare for
this transition. Further, while it is anticipated that this regulation
will eventually improve the nutritional options offered to students,
the Department estimates overall direct impact on the sales of food
items in the U.S. would be very limited. Currently, the Department
estimates that the sale of competitive foods in schools may represent
less than one percent of all food shipments from U.S. food
manufacturers. Notwithstanding this initial analysis, the Department is
specifically seeking comments on impacts of the proposed rule on the
U.S. food industry, including small businesses, beyond what is
discussed above and on ways these impacts can be minimized consistent
with the purposes of section 10 of the Child Nutrition Act of 1966.
Recordkeeping and Monitoring Requirements
This rule proposes to impose recordkeeping requirements on local
educational agencies regarding the implementation of these proposed
nutrition standards in areas under their jurisdiction that are outside
of the control of the school food service operation. The competitive
food nutrition standards apply throughout the school campus and apply
to all food available for sale to students outside of the reimbursable
school meals at any venue available to students for the purchase of
food, such as school stores, vending machines, concession stands,
fundraising events held on campus, snack bars, etc. It is the
responsibility of school food authorities to ensure and document that
foods sold by the school food service to students during the meal
service periods in meal service areas meet the proposed competitive
food standards. However, since these competitive food standards apply
to foods sold throughout all of the venues available in the schools
(other than reimbursable meals), the responsibility for demonstrating
compliance with these competitive food requirements must also include
the local educational agency, as defined in Sec. 210.2 of the current
NSLP regulations, as well. This proposed rule provides that local
educational agencies shall require that, at a minimum, receipts,
nutrition labels or product specifications be maintained by those
designated as responsible for competitive food service at the various
venues in the schools in order to ensure and document compliance with
the competitive food requirements for the foods and beverages available
to be sold to students at these venues. FNS will provide technical
assistance and guidance as necessary to State agencies and local
educational agencies in this regard. This proposed provision may be
found at Sec. 210.11(b)(3).
It is proposed that State agencies be responsible for monitoring
compliance with the requirements of the competitive food nutrition
standards through a review of local educational agency records
documenting compliance with these requirements. This requirement has
been included in Sec. 210.18(h)(7) as part of the general areas of
State agency administrative review responsibilities. As with other
program violations, if a State agency determines during an
administrative review that violations of the competitive food standards
have occurred, corrective action plans would be required to be
submitted to the State agency by the local educational agency and
school
[[Page 9542]]
food authority. FNS will consider any further actions that may be
associated with continued noncompliance with competitive food
standards, among other program violations, in a forthcoming proposed
rule implementing Section 303 of the HHFKA, Fines for Violating Program
Requirements.
Procedural Matters
Executive Order 12866 and Executive Order 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
This proposed rule has been designated an ``economically
significant regulatory action'' under section 3(f) of Executive Order
12866. Accordingly, the rule has been reviewed by the Office of
Management and Budget.
Regulatory Flexibility Analysis
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act of 1980 (5 U.S.C.601-612). It has been
certified that this rule will have a significant economic impact on a
substantial number of small entities.
The requirements established by this proposed rule will apply to
school districts, which meet the definitions of ``small governmental
jurisdiction'' and ``small entity'' in the Regulatory Flexibility Act.
An Initial Regulatory Flexibility Act analysis is included in the
preamble.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of the UMRA, the
Department generally must prepare a written statement, including a
cost/benefit analysis, for proposed and final rules with Federal
mandates that may result in expenditures to State, local, or Tribal
governments, in the aggregate, or to the private sector, of $100
million or more in any one year. When such a statement is needed for a
rule, section 205 of the UMRA generally requires the Department to
identify and consider a reasonable number of regulatory alternatives
and adopt the least costly, more cost-effective or least burdensome
alternative that achieves the objectives of the rule. This rule does
not contain Federal mandates (under the regulatory provisions of Title
II of the UMRA) that impose costs on State, local, or Tribal
governments or to the private sector of $100 million or more in any one
year. This rule is, therefore, not subject to the requirements of
sections 202 and 205 of the UMRA.
Executive Order 12372
The NSLP is listed in the Catalog of Federal Domestic Assistance
under No. 10.555. The SBP is listed in the Catalog of Federal Domestic
Assistance under No. 10.553. For the reasons set forth in the final
rule in 7 CFR part 3015, Subpart V and related notice (48 FR 29115,
June 24, 1983), these programs are included in the scope of Executive
Order 12372, which requires intergovernmental consultation with State
and local officials.
Executive Order 13132
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have federalism implications, agencies are directed
to provide a statement for inclusion in the preamble to the regulations
describing the agency's considerations in terms of the three categories
called for under section (6)(b)(2)(B) of Executive Order 13132. USDA
has considered the impact of this rule on State and local governments
and has determined that this rule does not have federalism
implications. This rule does not impose substantial or direct
compliance costs on State and local governments. Therefore, under
Section 6(b) of the Executive Order, a federalism summary impact
statement is not required.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is intended to have preemptive effect with
respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless specified in the DATES section of the final rule. Prior to any
judicial challenge to the provisions of this rule or the application of
its provisions, all applicable administrative procedures must be
exhausted.
Civil Rights Impact Analysis
FNS has reviewed this rule in accordance with Departmental
Regulations 4300-4, ``Civil Rights Impact Analysis,'' and 1512-1,
``Regulatory Decision Making Requirements.'' After a careful review of
the rule's intent and provisions, FNS has determined that this rule is
not intended to limit or reduce in any way the ability of protected
classes of individuals to receive benefits on the basis of their race,
color, national origin, sex, age or disability nor is it intended to
have a differential impact on minority owned or operated business
establishments and woman-owned or operated business establishments that
participate in the Child Nutrition Programs.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR
1320), requires that the Office of Management and Budget (OMB) approve
all collections of information by a Federal agency from the public
before they can be implemented. Respondents are not required to respond
to any collection of information unless it displays a current, valid
OMB control number. This proposal would require a new collection. The
new provisions in this rule which would increase burden hours, affect
the information collection requirements that will be merged into the
National School Lunch Program, OMB Control Number 0584-0006,
expiration date 5/31/2012. The current collection burden inventory for
the National School Lunch Program is 12,181,012. These changes are
contingent upon OMB approval under the Paperwork Reduction Act of 1995.
When the information collection requirements have been approved, FNS
will publish a separate action in the Federal Register announcing OMB's
approval.
Comments on the information collection in this proposed rule must
be received by April 9, 2013.
Send comments to the Office of Information and Regulatory Affairs,
OMB, Attention: Desk Officer for FNS, Washington, DC 20503. Please also
send a copy of your comments to Jon Garcia, Program Analysis and
Monitoring Branch, Child Nutrition Division, 3101 Park Center Drive,
Alexandria, VA 22302. For further information, or for copies of the
information collection requirements, please contact Lynn Rodgers-
Kuperman at the address indicated above. Comments are invited on: (1)
Whether the proposed collection of information is necessary for the
[[Page 9543]]
proper performance of the Agency's functions, including whether the
information will have practical utility; (2) the accuracy of the
Agency's estimate of the proposed information collection burden,
including the validity of the methodology and assumptions used; (3)
ways to enhance the quality, utility and clarity of the information to
be collected; and (4) ways to minimize the burden of the collection of
information on those who are to respond, including use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology.
All responses to this request for comments will be summarized and
included in the request for OMB approval. All comments will also become
a matter of public record.
Title: National School Lunch Program and School Breakfast Program:
Nutrition Standards for All Foods Sold in School as Required by the
Healthy, Hunger-Free Kids Act of 2010.
OMB Number: 0584-NEW
Expiration Date: Not Yet Determined
Type of Request: New Collection
Abstract: This rule sets forth proposed provisions to implement
sections 203 and 208 of Public Law 111-296, the Healthy, Hunger-Free
Kids Act of 2010 (HHFKA), enacted December 13, 2010.
Section 203 of the HHFKA amends section 9(a) of the Richard B.
Russell National School Lunch Act by requiring that schools
participating in the NSLP make potable water available to children at
no charge in the place where lunches are served during the meal
service. This is a nondiscretionary requirement of the HHFKA, effective
October 1, 2010.
Section 208 of the HHFKA amends Section 10 of the Child Nutrition
Act of 1966 (42 U.S.C. 1779) to give the Secretary of Agriculture new
authority to establish nutrition standards for all foods and beverages
sold outside of the Federal school meal programs on the campus of
schools during the school day. The CNA as amended by the HHFKA requires
that the Secretary promulgate proposed regulations to establish
science-based nutrition standards for foods sold in schools other than
those foods provided under the CNA and NSLA.
Those participating in the SBP also participate in the NSLP, thus
the burden associated with the SBP will be carried in the NSLP. The
average burden per record and the annual burden hours for recordkeeping
are explained below and summarized in the charts which follow. In
addition, provisions under sections 203 and 208 of the HHFKA do not
contain new reporting requirements.
Recordkeepers for this Proposed Rule: State Agencies (SAs) (57) and
School Food Authorities (SFAs) (20,858) and Schools (101,747)
Estimated Number of Recordkeepers for this Proposed Rule: 122,662
Estimated Number of Records per Recordkeeper for this Proposed
Rule: 1.033457
Estimated Total Annual Records: 126,766
Estimated Average Burden Hours per Record: 7.31217
Estimated Total Annual Burden Hours on Recordkeepers for this
Proposed Rule: 926,935
Estimated Annual Burden for 0584--New, Nutrition Standards for All Foods Sold in School
[7 CFR 210]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated
number of Records per Average Average burden Annual burden
Section record- record- keeper annual records per record hours
keepers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping
--------------------------------------------------------------------------------------------------------------------------------------------------------
SAs shall ensure that the LEA complies 7 CFR 210.18(h)(7) 57 73 4,161 0.25 1,040
with the nutrition standards for
competitive foods and retains
documentation demonstrating compliance.
LEAs and SFAs shall be responsible for 7 CFR 210.11(b)(3) 20,858 1 20,858 20 417,160
maintaining records documenting
compliance with the competitive food
standards.
Organizations responsible for 7 CFR 210.11(b)(3) 101,747 1 101,747 5 508,735
competitive food service at various
venues in schools shall maintain
records.
-------------------------------------------------------------------------------
Total Recordkeeping for Proposed ............................... 122,662 .............. 126,766 7.3122 926,935
Rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------
7 CFR 210.15 and 7 CFR 210.20 require that, to participate in the
National School Lunch Program, school food authorities and State
agencies must maintain records to demonstrate compliance with Program
requirements. 7 CFR 210.23 further requires that State agencies and
school food authorities maintain records for a period of 3 years.
Summary of Burden (OMB 0584-NEW)
------------------------------------------------------------------------
------------------------------------------------------------------------
Total No. Recordkeepers............................... 122,662
Average No. Records per Recordkeeper.................. 1.033457
Total Annual Records.................................. 126,766
Average Hours per Record.............................. 7.31217
Total Burden Hours for Part 210 with Proposed Rule.... 13,107,947
Current OMB Inventory for Part 210.................... 12,181,012
Difference (New Burden Requested with Proposed Rule).. 926,935
------------------------------------------------------------------------
[[Page 9544]]
E-Government Act Compliance
The Food and Nutrition Service is committed to complying with the
E-Government Act of 2002, to promote the use of the Internet and other
information technologies to provide increased opportunities for citizen
access to Government information and services and for other purposes.
Executive Order 13175--Consultation and Coordination With Indian Tribal
Governments
Executive Order 13175 requires Federal agencies to consult and
coordinate with Tribes on a government-to-government basis on policies
that have Tribal implications, including regulations, legislative
comments or proposed legislation, and other policy statements or
actions that have substantial direct effects on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the federal government and Indian Tribes. In Spring 2011, FNS offered
opportunities for consultation with Tribal officials or their designees
to discuss the impact of the Healthy, Hunger-Free Kids Act of 2010 on
tribes or Indian Tribal governments. The consultation sessions were
coordinated by FNS and held on the following dates and locations:
1. HHFKA Webinar & Conference Call--April 12, 2011
2. Mountain Plains--HHFKA Consultation, Rapid City, SD--March 23,
2011
3. HHFKA Webinar & Conference Call--June, 22, 2011
4. Tribal Self-Governance Annual Conference in Palm Springs, CA--
May 2, 2011
5. National Congress of American Indians Mid-Year Conference,
Milwaukee, WI--June 14, 2011
The five consultation sessions in total provided the opportunity to
address Tribal concerns related to school meals. There were no comments
about this regulation during any of the aforementioned Tribal
consultation sessions.
Reports from these consultations are part of the USDA annual
reporting on Tribal consultation and collaboration. FNS will respond in
a timely and meaningful manner to Tribal government requests for
consultation concerning this rule. Currently, FNS provides regularly
scheduled quarterly consultation sessions as a venue for collaborative
conversations with Tribal officials or their designees.
Regulatory Impact Analysis Summary
As required for all rules that have been designated as significant
by the Office of Management and Budget, a Regulatory Impact Analysis
(RIA) was developed for this proposal. A summary is presented below.
The full RIA is published as part of the Docket on www.regulations.gov.
Need for Action
The proposed rule responds to two provisions of the Healthy,
Hunger-Free Kids Act of 2010. Section 208 of HHFKA amended Section 10
of the Child Nutrition Act of 1966 to require the Secretary to
establish science-based nutrition standards for all foods sold in
schools during the school day.
Benefits
The primary purpose of the proposed rule is to ensure that
nutrition standards for competitive foods are consistent with the most
recent DGA recommendations, effectively holding competitive foods to
the same standards as the rest of the foods sold at school during the
school day. These standards, combined with recent improvements in
school meals, will help promote diets that contribute to students'
long-term health and well-being. And they will support parents' efforts
to promote healthy choices for children at home and at school.
Obesity has become a major public health concern in the U.S., with
one-third of U.S. children and adolescents now considered overweight or
obese (Beydoun and Wang 2011 \4\), with current childhood obesity rates
four times higher in children ages six to 11 than they were in the
early 1960s (19 vs. 4 percent), and three times higher (17 vs. 5
percent) for adolescents ages 12 to 19.\5\ Research focused
specifically on the effects of obesity in children indicates that obese
children feel they are less capable, both socially and athletically,
less attractive, and less worthwhile than their non-obese
counterparts.\6\ Further, there are direct economic costs due to
childhood obesity: $237.6 million (in 2005 dollars) in inpatient costs
\7\ and annual prescription drug, emergency room, and outpatient costs
of $14.1 billion.\8\
---------------------------------------------------------------------------
\4\ Beydoun, M.A. and Y. Wang. 2011. Socio-demographic
disparities in distribution shifts over time in various adiposity
measures among American children and adolescents: What changes in
prevalence rates could not reveal. International Journal of
Pediatric Obesity, 6:21-35. As cited in Food Labeling: Calorie
Labeling of Articles of Food in Vending Machines NPRM. 2011.
Preliminary Regulatory Impact Analysis, Docket No. FDA-2011-F-0171.
\5\ Ogden et al. Prevalence of Obesity Among Children and
Adolescents: United States, Trends 1963-1965 Through 2007-2008. CDC-
NHCS, NCHS Health E-Stat, June 2010. On the web at http://www.cdc.gov/nchs/data/hestat/obesity_child_07_08/obesity_child_07_08.htm.
\6\ Riazi, A., S. Shakoor, I. Dundas, C. Eiser, and S.A.
McKenzie. 2010. Health-related quality of life in a clinical sample
of obese children and adolescents. Health and Quality of Life
Outcomes, 8:134-139.Samuels & Associates. 2006. Competitive Foods.
Policy Brief prepared by Samuels & Associates for The California
Endowment and Robert Wood Johnson Foundation. Available at: http://www.healthyeatingactivecommunities.org/downloads/
\7\ Trasande, L., Y. Liu, G. Fryer, and M. Weitzman. 2009.
Trends: Effects of Childhood Obesity on Hospital Care and Costs,
1999-2005. Health Affairs, 28:w751-w760.
\8\ Cawley, J. 2010. The Economics of Childhood Obesity. Health
Affairs, 29:364-371. As cited in Food Labeling: Calorie Labeling of
Articles of Food in Vending Machines NPRM. 2011. Preliminary
Regulatory Impact Analysis, Docket No. FDA-2011-F-0171.
---------------------------------------------------------------------------
Because the factors that contribute both to overall food
consumption and to obesity are so complex, it is not possible to define
a level of disease or cost reduction expected to result from
implementation of the rule. There is some evidence, however, that
competitive food standards can improve children's dietary quality:
Taber, Chriqui, and Chaloupka (2012 \9\) concluded that
California high school students consumed fewer calories, less fat, and
less sugar at school than students in other States. Their analysis
``suggested that California students did not compensate for consuming
less within school by consuming more elsewhere'' (p. 455).
---------------------------------------------------------------------------
\9\ Taber, D.R., J.F. Chriqui, and F. J. Chaloupka. 2012.
Differences in Nutrient Intake Associated With State Laws Regarding
Fat, Sugar, and Caloric Content of Competitive Foods. Archives of
Pediatric & Adolescent Medicine, 166:452-458.
---------------------------------------------------------------------------
Schwartz, Novak, and Fiore, (2009 \10\) determined that
healthier competitive food standards decreased student consumption of
low nutrition items with no compensating increase at home.
---------------------------------------------------------------------------
\10\ Schwartz, M.B., S.A. Novak, and S.S. Fiore. 2009. The
Impact of Removing Snacks of Low Nutritional Value from Middle
Schools. Health Education & Behavior, 36:999-1011.
---------------------------------------------------------------------------
Researchers at Healthy Eating Research and Bridging the
Gap found that ``[t]he best evidence available indicates that policies
on snack foods and beverages sold in school impact children's diets and
their risk for obesity. Strong policies that prohibit or restrict the
sale of unhealthy competitive foods and drinks in schools are
associated with lower proportions of overweight or obese students, or
lower rates of increase in student BMI'' (Healthy Eating Research and
Bridging the Gap, 2012, p. 3 \11\).
---------------------------------------------------------------------------
\11\ Healthy Eating Research and Bridging the Gap. 2012.
Influence of Competitive Food and Beverage Policies on Children's
Diets and Childhood Obesity. Available at http://www.healthyeatingresearch.org/images/stories/her_research_briefs/Competitive_Foods_Issue_Brief_HER_BTG_7-2012.pdf.
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[[Page 9545]]
A recent, comprehensive, and groundbreaking assessment of the
evidence on the importance of competitive food standards conducted by
the Pew Health Group concluded that a national competitive foods policy
would increase student exposure to healthier foods, decrease exposure
to less healthy foods, and would also likely improve the mix of foods
that students purchase and consume at school. Researchers concluded
that these kinds of changes in food exposure and consumption at school
are important influences on the overall quality of children's diets.
Although nutrition standards for foods sold at school alone may not
be a determining factor in children's overall diets, they are critical
to providing children with healthy food options throughout the entire
school day. Thus, these standards will help to ensure that the school
nutrition environment does all that it can to promote healthy choices,
and help to prevent diet-related health problems. Ancillary benefits
could derive from the fact that improving the nutritional value of
competitive foods may reinforce school-based nutrition education and
promotion efforts and contribute significantly to the overall
effectiveness of the school nutrition environment in promoting
healthful food and physical activity choices.\12\
---------------------------------------------------------------------------
\12\ Pew Health Group and Robert Wood Johnson Foundation. 2012.
Heath Impact Assessment: National Nutrition Standards for Snack and
a la Carte Foods and Beverages Sold in Schools. Available online:
http://www.pewhealth.org/uploadedFiles/PHG/Content_Level_Pages/Reports/KS%20HIA_FULL%20Report%20062212_WEB%20FINAL-v2.pdf.
---------------------------------------------------------------------------
Costs
The proposed rule requires schools to improve the nutritional
quality of foods offered for sale to students outside of the Federal
school lunch and school breakfast programs. The new standards apply to
foods sold [agrave] la carte, in school stores or vending machines,
and, pending provisions of the final rule regarding occasional
exemptions, through in-school fundraisers sponsored by students,
parents, or other school-affiliated groups. Upon implementation of the
rule, students will face new food choices from these sources. The new
choices will meet standards for fat, saturated fat, sugar, and sodium,
and have whole grains, low fat dairy, fruits, vegetables, or protein
foods as their main ingredients. Our analysis examines a range of
possible behavioral responses of students and schools to these changes.
To estimate potential effects on school revenue, we look to the
experience of school districts that have adopted or piloted competitive
food reforms in recent years.
The practice of selling foods in competition with Federally
reimbursable program meals and snacks is widespread. In SY 2004-2005,
82 percent of all schools--and 92 percent of middle and high schools--
offered [agrave] la carte foods at lunch. Vending machines were
available in 52 percent of all schools and 26 percent of elementary
schools, 87 percent of middle schools, and 98 percent of high schools
(Gordon, et al., 2007; Volume 1, pp 102-114).
The limited information available indicates that many schools have
successfully introduced competitive food reforms with little or no loss
of revenue and in a few cases, revenues from competitive foods
increased after introducing healthier foods. In some of the schools
that showed declines in competitive food revenues, losses from reduced
sales were fully offset by increases in reimbursable meal revenue. In
other schools, students responded favorably to the healthier options
and competitive food revenue declined little or not at all.
But not all schools that adopted or piloted competitive food
standards fared as well. Some of the same studies and reports that
highlight school success stories note that other schools sustained some
loss after implementing similar standards. While in some cases these
were short-term losses, even in the long-term the competitive food
revenue lost by those schools was not offset (at least not fully) by
revenue gains from the reimbursable meal programs.
Our analysis examines the possible effects of the proposed rule on
school revenues from competitive foods and the administrative costs of
complying with the rule's competitive foods provisions. The analysis
uses available data to construct model-based scenarios that different
schools may experience in implementing the proposed rule. While these
vary in their impact on overall school food revenue, each scenario's
estimated impact is relatively small (+0.4 percent to -0.7 percent). In
comparison, the regulations implementing the school food service
revenue provisions of HHFKA would increase average overall school food
revenue by roughly six percent. That said, the data behind the
scenarios are insufficient to assess the frequency or probability of
schools experiencing the impacts shown in each.
List of Subjects
7 CFR Part 210
Grant programs-education; Grant programs-health; Infants and
children; Nutrition; Reporting and recordkeeping requirements; School
breakfast and lunch programs; Surplus agricultural commodities.
7 CFR Part 220
Grant programs-education; Grant programs-health; Infants and
children; Nutrition; Reporting and recordkeeping requirements; School
breakfast and lunch programs.
Accordingly, for the reasons discussed in the preamble, 7 CFR parts
210 and 220 are proposed to be amended as follows:
PART 210--NATIONAL SCHOOL LUNCH PROGRAM
0
1. The authority citation for 7 CFR part 210 continues to read as
follows:
Authority: 42 U.S.C. 1751-1760, 1779.
0
2. In Sec. 210.1, revise the second sentence of paragraph (b) to read
as follows:
Sec. 210.1 General purpose and scope.
* * * * *
(b) * * * It specifies Program responsibilities of State and local
officials in the areas of program administration, preparation and
service of nutritious lunches, the sale of competitive foods, payment
of funds, use of program funds, program monitoring and reporting and
recordkeeping requirements.
0
3. In Sec. 210.10, amend paragraphs (a)(1)(i) and (a)(1)(ii) by adding
a new sentence at the end of the each paragraph.
The additions read as follows:
Sec. 210.10 Nutrition standards and menu planning approaches for
lunches and requirements for afterschool snacks.
(a) * * *
(1) * * *
(i) * * * Schools shall make potable water available to children at
no charge in the place where lunches are served during the meal
service.
(ii) * * * Schools shall make potable water available to children
at no charge in the place where afterschool snacks are served during
the afterschool snack service.
* * * * *
0
(4) Revise Sec. 210.11 to read as follows:
Sec. 210.11 Competitive food service and standards.
(a) Definitions. For the purpose of this section:
[[Page 9546]]
(1) Competitive food means all food and beverages other than meals
reimbursed under programs authorized by the Richard B. Russell National
School Lunch Act and the Child Nutrition Act of 1966 available for sale
to students on the School campus during the School day;
(2) School day means, for the purpose of competitive food standards
implementation, the period from the midnight before, to 30 minutes
after the end of the official school day;
(3) School campus means, for the purpose of competitive food
standards implementation, all areas of the property under the
jurisdiction of the school that are accessible to students during the
school day; and
(4) Combination foods means products that contain two or more
components representing two or more of the recommended food groups:
fruit, vegetable, dairy, protein or grains.
(b) General requirements for competitive food.
(1) State agencies and/or local educational agencies shall
establish such policies and procedures as are necessary to ensure
compliance with this section. State agencies and/or local educational
agencies may impose additional restrictions on competitive foods,
provided that they are not inconsistent with the requirements of this
part.
(2) The sale of otherwise allowable calorie-free and low calorie,
flavored and/or carbonated water as provided in paragraphs (m)(3)(vi),
(m)(3)(vii), and (m)(3)(viii) of this section in food service areas
during the meal service is prohibited.
(3) The local educational agency is responsible for the maintenance
of records that document compliance with the nutrition standards for
all competitive food available for sale to students in areas under its
jurisdiction that are outside of the control of the school food
authority responsible for the service of reimbursable school meals.
School food authorities shall be responsible for maintaining records
documenting compliance with these standards in meal service areas
during meal service periods. The local educational agency shall be
responsible for ensuring that organizations designated as responsible
for food service at the various venues in the schools maintain records
in order to ensure and document compliance with the nutrition
requirements for the foods and beverages available to be sold to
students at these venues during the school day as required by this
part. At a minimum, such records shall include receipts, nutrition
labels and/or product specifications for the items available for sale
to students on the school campus during the school day.
(4) The nutrition standards for the sale of competitive food
outlined in this section shall apply to competitive food for all
programs authorized by the Richard B. Russell National School Lunch Act
and the Child Nutrition Act of 1966 operating on the school campus
during the school day.
(5) Fundraiser restrictions. Food and beverage items sold during
the school day shall meet the nutrition standards for competitive food
as required in this part. A special exemption shall be allowed for the
sale of food and/or beverages that do not meet the competitive food
nutrient standards as required in this section for the purpose of
conducting a school-sponsored fundraiser. Such specially exempted
fundraisers shall not take place more than:
(i) Alternative E1: the frequency specified by the State agency
during such periods that schools are in session; or
(ii) Alternative E2: the frequency specified by the State agency
and approved by USDA during such periods that schools are in session.
No specially exempted fundraiser foods or beverages may be sold in
competition with school meals in the food service area during the meal
service.
(c) General nutrition standards for competitive foods.
(1) At a minimum, all competitive food sold to students on the
school campus during the school day must meet the nutrition standards
specified in this section.
(2) To be allowable, a competitive food item must:
(i) Meet all of the competitive food nutrient standards as outlined
in this section; and
(ii) Be a grain product that contains 50 percent or more whole
grains by weight or have as the first ingredient a whole grain; or
(iii) Have as the first ingredient one of the non-grain main food
groups: fruit, vegetable, dairy product or protein foods (meat, beans,
poultry, seafood, eggs, nuts, seeds, etc.); or
(iv) Contain 10 percent of the Daily Value of a naturally occurring
nutrient of public health concern (i.e., calcium, potassium, vitamin D
or dietary fiber); or
(v) Be a combination food that contains \1/4\ cup of fruit or
vegetable; and
(vi) If water is the first ingredient, the second ingredient must
be one of the food items in (c)(2)(i), (c)(2)(ii), (c)(2)(iii),
(c)(2)(iv) or (c)(2)(v) of this section.
(3) Exemptions.
(i) Alternative A1: All menu items provided as part of the NSLP or
SBP reimbursable meal are exempt from these competitive food standards
with the exception of the standards established for total fat and
sugar, as specified. Grain based dessert products must meet all
standards in order to be served. Such menu items shall be served in the
same or smaller portion sizes as in the NSLP or SBP to be allowable; or
(ii) Alternative A2: All menu items provided as part of the NSLP or
SBP reimbursable meal are exempt from these competitive food standards,
with the exception of grain based dessert products which must meet all
standards in order to be served. Such menu items shall be served in the
same or smaller portion sizes as in the NSLP or SBP to be allowable,
and must meet the timeframe exemptions specified in paragraph (4) of
this section.
(4) Exemptions.
(i) Alternative B1: Exemptions to these nutrition requirements
include side dishes (other than grain based dessert items) and
entr[eacute]e items sold a la carte in accordance with the requirements
of paragraph (3)(ii) [Alternative A2] that are NSLP or SBP meal items
that are offered on the same day as part of the reimbursable school
meal. Such side dishes and entr[eacute]e items must be offered in the
same or smaller portion size as offered in the NSLP or SBP and meet the
standards specific to the NSLP and SBP; or
(ii) Alternative B2: Exemptions to these nutrition requirements
include side dishes (other than grain based dessert items) and
entr[eacute]e items sold a la carte in accordance with the requirements
of paragraph (3)(ii) [Alternative A2] that are NSLP or SBP meal items
that are offered within four operating days of their service as part of
the reimbursable school meal during the current menu cycle. Such side
dishes and entr[eacute]e items must be offered in the same or smaller
portion size as offered in the NSLP or SBP and meet the standards
specific to the NSLP and SBP.
(d) Fruits and vegetables. Fresh, frozen and canned fruits and
vegetables with no added ingredients except water or, in the case of
fruit, packed in 100 percent fruit juice or extra light syrup, are
exempt from the nutrient standards included in this section.
(e) Grain products. Grain products acceptable as a competitive food
must include 50 percent or more whole grains by weight or have whole
grain as the first ingredient. Grain products shall
[[Page 9547]]
meet all of the other nutrient standards included in this section.
(f) Total fat.
(1) The total fat content of a competitive food shall be not more
than 35 percent of total calories from fat per portion as packaged.
(2) Exemptions to this requirement include the following:
(i) Reduced fat cheese is exempt from the total fat and saturated
fat standard, but subject to the required trans fat, calorie, sugar and
sodium standards;
(ii) Nuts and Seeds and Nut/Seed Butters are exempt from total fat
standard, but subject to the required saturated fat, trans fat,
calorie, sugar and sodium standards. This exemption does not extend to
combination products that contain nuts, nut butters or seeds or seed
butters with other ingredients such as peanut butter and crackers,
trail mix, chocolate covered peanuts, etc.;
(iii) Products that consist of only dried fruit with nuts and/or
seeds with no added nutritive sweeteners or fat are exempt from the
total fat and sugar standards, but subject to the required saturated
fat, trans fat, calorie and sodium standards; and
(iv) Seafood with no added fat is exempt from the total fat
requirement in order to increase omega-3 fatty acids in diets as
recommended by the 2010 DGA; but subject to the required sugar,
saturated fat, trans fat, calorie and sodium standards.
(g) Saturated fat.
(1) The saturated fat content of a competitive food must be less
than 10 percent of total calories per portion, except as specified in
paragraph (g)(2).
(2) Reduced fat cheese is exempt from the total fat and saturated
fat standards, but subject to the calorie, trans fat, sugar and sodium
standards.
(h) Trans fat. The trans fat content of a competitive food must be
zero grams trans fat per portion as packaged (not more than 0.5 grams
per portion).
(i) Total sugars.
(1) Alternatives.
(i) Alternative C1: Total sugars contained in a competitive food
item must be not more than 35 percent of calories per portion.
(ii) Alternative C2: Total sugars contained in a competitive food
item must be not more that 35 percent of weight per portion.
(2) Exemptions to this requirement are:
(i) Dried whole fruits or vegetables; dried whole fruit or
vegetable pieces; and dried dehydrated fruits or vegetables with no
added nutritive sweeteners are exempt from the sugar standard, but
subject to the calorie, total fat, saturated fat, trans fat and sodium
standards;
(ii) Products that consist of only dried fruit with nuts and/or
seeds with no added nutritive sweeteners or fat are exempt from the
total fat and sugar standards, but subject to the calorie, trans fat,
saturated fat and sodium standards; and
(iii) Flavored and unflavored nonfat and low-fat yogurt with no
more than 30 grams of total sugars per 8 ounce serving is exempt from
the sugar standard, but subject to the calorie, total fat, saturated
fat, trans fat and sodium standards.
(j) Calorie and sodium content for snack items and side dishes sold
a la carte. Snack items and side dishes sold a la carte other than
those exempt from the competitive food nutrition standards as provided
in Sec. 210.11(c)(3) shall have not more than 200 calories and not
more than 200 mg of sodium per portion as served, including the
calories and sodium contained in any added accompaniments such as
butter, cream cheese, salad dressing etc., and shall meet all of the
other nutrient standards for non entr[eacute]e items.
(k) Calorie and sodium content for entr[eacute]e items sold a la
carte.
(1) An entr[eacute]e item is defined as an item that is either:
(i) A combination food of meat or meat alternate and whole grain-
rich/bread; or
(ii) A combination food of vegetable or fruit and meat or meat
alternate; or
(iii) A meat or meat alternate alone with the exception of yogurt,
low-fat or reduced fat cheese, nuts, seeds and nut or seed butters.
(2) Entr[eacute]e items sold a la carte other than those exempt
from the competitive food nutrition standards as provided in Sec.
210.11(c)(3) shall contain no more than 350 calories and 480 mg. of
sodium per portion as served and meet all of the other nutrient
standards in this section.
(l) Caffeine. Foods and beverages available to elementary and
middle school-aged students shall be caffeine-free, with the exception
of trace amounts of naturally occurring caffeine substances.
(m) Beverages.
(1) Allowable beverages for elementary school-aged students shall
be limited to:
(i) Plain water (no size limit);
(ii) Low fat milk, plain (no more than 8 fluid ounces);
(iii) Non fat milk, plain or flavored (no more than 8 fluid
ounces);
(iv) Nutritionally equivalent milk alternatives as permitted in
Sec. 210.10 and Sec. 220.8 (no more than 8 fluid ounces); and
(v) 100 percent fruit/vegetable juice (no more than 8 fluid
ounces).
(2) Allowable beverages for middle school-aged students shall be
limited to:
(i) Plain water (no size limit);
(ii) Low fat milk, plain (no more than 12 fluid ounces);
(iii) Non fat milk, plain or flavored (no more than 12 fluid
ounces);
(iv) Nutritionally equivalent milk alternatives as permitted in
Sec. 210.10 and Sec. 220.8 (no more than 12 fluid ounces); and
(v) 100 percent fruit/vegetable juice (no more than 12 fluid
ounces).
(3) Allowable beverages for high school-aged students shall be
limited to:
(i) Plain water (no size limit);
(ii) Low fat milk, plain (no more than 12 fluid ounces);
(iii) Non fat milk, plain or flavored (no more than 12 fluid
ounces);
(iv) Nutritionally equivalent milk alternatives as permitted in
Sec. 210.10 and Sec. 220.8 (no more than 12 fluid ounces);
(v) 100 percent fruit/vegetable juice (no more than 12 fluid
ounces);
(vi) Calorie-free, flavored and/or carbonated water (no more than
20 fluid ounces), except that such beverages shall not be available or
served to students in the food service area during the meal service
period;
(vii) No more than 20 fluid ounce servings of other beverages that
comply with the Food and Drug Administration requirement for bearing a
``calorie free'' claim of less than 5 kcals/serving, except that such
beverages shall not be available or served to students in the food
service area during the meal service period; and
(viii) Alternative D1: No more than 12 fluid ounce servings of
other beverages that contain no more than 40 calories per 8 fluid ounce
serving or 60 calories per 12 fluid ounce serving, except that such
beverages shall not be available or served to students in the food
service area during the meal service period; or
(ix) Alternative D2: No more than 12 fluid ounce servings of other
beverages that contain no more than 50 calories per 8 fluid ounce
serving or 75 calories per 12 ounce serving, except that such beverages
shall not be available or served to students in the food service area
during the meal service period.
(n) Accompaniments. The use of accompaniments shall be limited when
competitive food is sold to students in school. All accompaniments to a
competitive food item shall be pre-portioned and the ingredients of
such accompaniments must be included in the nutrient profile as a part
of the food item served and shall meet all of the nutritional standards
for competitive food as required in this section.
0
5. In Sec. 210.18, a new paragraph (h)(7) is added to read as follows:
Sec. 210.18 Administrative reviews.
* * * * *
[[Page 9548]]
(h) * * *
(7) Compliance with competitive food standards. The State agency
shall ensure that the local educational agency complies with the
nutrition standards for competitive foods and retains documentation
demonstrating compliance with the competitive food service and
standards outlined in Sec. 210.11.
0
6. Appendix B to Part 210 is removed and reserved.
PART 220--SCHOOL BREAKFAST PROGRAM
0
1. The authority citation for 7 CFR part 220 continues to read as
follows:
Authority: 42 U.S.C. 1773, 1779, unless otherwise noted.
0
2. In Sec. 220.2,
(a) The definition of ``Foods of minimal nutritional value'' is
removed; and
(b) The definition of ``Competitive foods'' is removed.
0
3. Section 220.12 is revised as follows:
Sec. 220.12 Competitive food services.
Competitive food services shall comply with the requirements
specified in Sec. 210.11 of this chapter.
0
4. Appendix B to Part 220 is removed and reserved.
Dated: February 1, 2013.
Kevin W. Concannon,
Under Secretary, Food, Nutrition, and Consumer Services.
Note: The following appendix will not appear in the Code of
Federal Regulations:
Initial Regulatory Flexibility Analysis--Proposed Rule
National School Lunch Program and School Breakfast Program: Nutrition
Standards for All Foods Sold in School as Required by the Healthy,
Hunger-Free Kids Act of 2010
Agency: Food and Nutrition Service, USDA.
Background: The Regulatory Flexibility Act (RFA) requires
agencies to consider the impact of their rules on small entities and
to evaluate alternatives that would accomplish the same objectives
without undue burden when the rules impose a significant economic
impact on a substantial number of small entities. Inherent in the
RFA is the desire to remove barriers to competition and encourage
consideration of ways to tailor regulations to the size of the
regulated entities.
The RFA does not require that agencies necessarily minimize a
rule's impact on small entities if there are significant, legal,
policy, factual, or other reasons for the rule's impacts. The RFA
requires only that agencies determine, to the extent feasible, the
rule's economic impact on small entities, explore regulatory
alternatives for reducing any significant economic impact on a
substantial number of such entities, and explain the reasons for
their regulatory choices.
Reasons That Action Is Being Considered: This rule sets forth
proposed provisions to implement section 208 of Public Law 111-296,
the Healthy, Hunger-Free Kids Act of 2010 (HHFKA). Section 208
amends Section 10 of the Child Nutrition Act of 1966 (42 U.S.C.
1779) (CNA) to give the Secretary of Agriculture new authority to
establish science-based nutrition standards for all foods and
beverages sold outside of the Federal child nutrition programs on
the school campus during the school day. The Act also specifies that
the nutrition standards shall apply to all foods sold (a) outside
the school meal programs; (b) on the school campus; and (c) at any
time during the school day.
Objectives of, and Legal Basis for, the Proposed Rule: As stated
above, the legal basis for the proposed rule are the amendments made
to the CNA by HHFKA. The objectives of this rule are to establish
nutrition standards for all foods sold to students in schools other
than meals served through child nutrition programs authorized under
the NSLA or the CNA and to improve the health and well being of the
Nation's school-aged children.
Number of Small Entities to Which the Proposed Rule Will Apply:
This proposed rule directly regulates the 55 State education
agencies and 2 State Departments of Agriculture that operate the
NSLP pursuant to agreements with USDA's Food and Nutrition Service.
In turn, its provisions apply to school districts, school food
authorities, schools and others that prepare and sell foods other
than those provided as reimbursable school lunches and breakfasts
(such as [agrave] la carte food sales, vending machines, or other
competitive food venues). While State agencies are not considered
small entities as State populations exceed the 50,000 threshold for
a small government jurisdiction, many of the service-providing
institutions that work with them to implement the program do meet
definitions of small entities:
Nearly 101,000 schools and residential child care
institutions (RCCIs) participate in NSLP. These include more than
90,000 public schools, 6,000 private schools, and about 5,000 RCCIs.
A majority of those institutions also provide competitive foods
through [agrave] la carte menus, vending, school stores, snack bars,
fundraisers, or some combination of venues. Within individual
schools, a variety of school groups (e.g., student clubs, parent
teacher organizations, or parent ``booster'' organizations
supporting activities such as sports, music, and enrichment
activities) earn revenue from competitive foods.
School Food Authorities (SFAs) earn competitive food
revenues primarily through [agrave] la carte sales, but may also
earn revenues from vending machine sales, school stores, snack bars,
and other outlets.
Manufacturers, wholesalers, and distributors, including
vending machine operators, are not regulated by the proposed rule,
but are indirectly affected. Of this group, vending operators with
machines in primary and secondary schools may be the most affected.
Vending businesses tend to have few employees; 76 percent of
companies that operated for the entire year in 2007 employed fewer
than 10 people.\13\ Vending machines in primary and secondary
schools make up just two percent of vending industry sales.\14\
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\13\ Vending machine operators are described by ``NAICS'' code
454210. The code does not account for all vending machine businesses
and data is not available to assess the proportion of vending
machine businesses in schools. The statistics by establishment size
are from the U.S. Census Bureau, 2007 Economic Census. Table 2,
``Employment Size of Establishments for the U.S.'' on http://www.census.gov/econ/industry/ec07/a454210.htm.
\14\ The vending industry estimates that primary and secondary
schools accounted for 2.2 percent ($1 billion out of $45.6 billion)
of total vending machine sales in 2008. Census of the Industry 2009,
Vending Times, http://www.vendingtimes.com/Media/Sites-AdministratorsSiteNavigation/VendingTimes_Census2009.pdf.
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Food service management companies (FSMCs) that prepare
school meals or menus under contract to SFAs may be indirectly
affected by the proposed rule in that they may also prepare foods
for the [aacute] la carte menu. Thirteen percent of public school
SFAs contracted with FSMCs in school year (SY) 2004-2005.\15\ Of
23,000 food service contractors that operated for the full year in
2007, 86 percent employed fewer than 100 workers.\16\
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\15\ U.S. Department of Agriculture, Food and Nutrition Service,
Office of Research, Nutrition and Analysis, School Nutrition Dietary
Assessment Study-III, Vol. I, 2007, p. 34 http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/SNDAIII-Vol1.pdf.
\16\ Census Bureau, 2007 Economic Census, NAICS 72231. Table 2,
``Employment Size of Establishments for the U.S.'' on http://www.census.gov/econ/industry/ec07/a72231.htm.
---------------------------------------------------------------------------
Projected Reporting, Recordkeeping and Other Compliance
Requirements: The analysis below covers only those organizations
impacted by the proposed rule that were determined to be small
entities.
School Food Authorities and Other School Groups
An estimated 95 percent of competitive school food sales accrue
to SFAs; the remaining five percent accrues to other school groups
such as student clubs, parent teacher organizations, or parent
``booster'' organizations. If SFAs, other school groups, and the
food industry are able to satisfy current student demand for
competitive foods with new options that meet the proposed rule
standards, then there may be no change in competitive food sales or
competitive food revenue. And although the evidence base is limited,
it suggests that many SFAs and other school groups have successfully
introduced competitive food reforms with little or no loss of
revenue, and in a few cases, revenues from competitive food sales
have increased after introducing healthier foods. In some cases,
decreases in competitive food sales have been offset by increases in
school meal participation. In other cases, schools have experienced
a decline in overall school food revenue.
The available data do not allow us to estimate the potential
school revenue effect with any certainty. Instead, we have prepared
[[Page 9549]]
a series of estimates that represent a range of plausible outcomes
given the variety of experiences observed in several case studies.
At one end of this range, we calculate that a four percent increase
in competitive food revenues would result in a +0.4 percent increase
in school food revenue over five years. At the other end of the
range, we calculate that the standards in the proposed rule could
reduce competitive food revenue by an estimated 4.8 percent,
resulting in an overall decrease in school food revenues of -0.7
percent over five years. (Additional detail is provided in the
Regulatory Impact Analysis for this rule.)
Case studies that consider the impacts of competitive food
nutrition standards on SFA revenues find that reductions in
competitive food revenue were often fully offset by increases in
reimbursable meal revenue as students redirected their demand for
competitive foods to the reimbursable school meal programs. In other
instances, the lost competitive food revenue was not offset (at
least not fully) by revenue gains from the reimbursable meal
programs. Most SFAs have a number of options and some flexibility
within available revenue streams and operations that can help
minimize lost revenue. For example, about half of all SFA revenues
are from Federal payments for reimbursable meals. SFAs can increase
revenues to the extent that schools successfully encourage greater
meal participation. In addition, the revenue impacts presented here
are from a baseline that increased substantially at the start of SY
2011-2012, on implementation of interim final regulations for
Sections 205 and 206 of HHFKA. These provisions will ensure that the
revenue from competitive food sales is aligned with their cost.\17\
The requirements of Section 206 are estimated to increase
competitive food revenue by 35 percent, while the scenarios
presented here anticipate a competitive food revenue loss of no more
than 4.8 percent. The combined effect of both provisions remains a
net increase in SFA competitive food revenue under all of these
scenarios.\18\
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\17\ Federal Register, Vol. 76, No. 117, pp. 35301-35318.
\18\ The same is not true of competitive food revenue of non-SFA
school groups. Competitive food revenue that does not accrue to the
foodservice account is not subject to regulation under Section 206.
---------------------------------------------------------------------------
It is also worth noting that USDA estimates that just over 98
percent of SFA competitive food revenue is generated by sales of
[agrave] la carte foods and ``many foods are only offered [agrave]
la carte when available as part of a reimbursable meal'' (SNDA-III,
p. 119).\19\ Under regulations that took effect July 1, 2012, school
meals are currently required to meet new nutrition standards.
Because the school meal standards are similar to those proposed for
competitive foods, many of the foods served [agrave] la carte will
meet the standards in the final competitive food rule before it
takes effect. For other entr[eacute]es and side dishes served as
part of a reimbursable meal, the proposed rule would provide a
limited exemption from competitive food requirements. In addition,
the new school meal nutrition standards will provide an opportunity
for schools and for industry to adjust to the new requirements
before the competitive food standards take effect. In addition, at
least 39 States currently have competitive food policies, the
majority of which exceed existing Federal standards. In these
States, industry may already have made a number adjustments to the
products offered for sale.
---------------------------------------------------------------------------
\19\ SNDA III: www.fns.usda.gov/Ora/menu/Published/CNP/FILES/SNDAIII-Vol1.pdf.
---------------------------------------------------------------------------
Unlike SFAs other school groups cannot make up lost revenues
through school meal sales. The proposed rule mitigates the impact of
the proposed rule on such groups by providing an exception for
occasional fundraisers that do not meet the proposed competitive
food standards. Alternatively, these groups may explore fundraising
options that include foods that do meet the proposed standards or
find other modes of fundraising that do not include competitive
foods.
Industry Groups
Manufacturers, wholesalers, foodservice management companies,
and distributors, including vending machine operators, are not
directly regulated under the proposed rule but may be affected
indirectly in the sense that schools will need to purchase a
different mix of foods to satisfy the requirements of the rule.
However, many States have already adopted their own competitive food
standards, and the food industry is already responding by producing
a variety of products that meet current State as well as the
proposed Federal standards. Consider, for example, that Wescott et
al. (2012) found that between 2004 and 2009, the beverage industry
reduced calories shipped to schools by 90 percent, with a total
volume reduction in full-calorie soft drinks of over 95 percent.
Consistent with SBA guidance, which notes that ``[t]he courts
have held that the RFA requires an agency to perform a regulatory
flexibility analysis of small entity impacts only when a rule
directly regulates them'' (SBA, p. 20),\20\ we do not attempt to
quantify the economic effect of the proposed rule on these industry
groups. However, we briefly mention two industry groups that may be
more directly affected by the rule than others.
---------------------------------------------------------------------------
\20\ SBA, ``A Guide for Government Agencies''.
---------------------------------------------------------------------------
(1) Vending.
Vending machine operators served an estimated 19,000 primary and
secondary schools in the U.S. in 2008.\21\ For 2008, the vending
industry estimated that primary and secondary schools accounted for
just two percent of total vending machine dollar sales. Both
industry and U.S. Census data indicate that most vending machine
operations are small businesses. The majority of vending machine
operators that operated for the entire year in 2007 (76 percent)
employed fewer than 10 individuals according to the U.S. Economic
Census.\22\ The same source also finds that 37 percent of vending
machine operators that operated for all of 2007 generated less than
$250,000 in receipts, although those operators accounted for less
than 3 percent of total revenue from this industry group.\23\
Because of the relatively large number of small vending machine
operators, some small vendors may be challenged by the changes
contained in the proposed rule. Whether small or large, many vending
machine operators will need to modify their product lines to meet
the requirements of the rule.
---------------------------------------------------------------------------
\21\ VendingTimes.com, Census of the Industry, 2009 Edition.
Automatic Merchandiser magazine, June/July 2011.
\22\ Data for NAICS code 454210, ``vending machine operators.''
U.S. Census Bureau, http://www.census.gov/econ/industry/ec07/a454210.htm (accessed 11/13/2011).
\23\ Ibid. Note that these statistics are for all vending
machine operators in NAICS code 4545210, not just those that serve
the school market. We do not know whether the concentration of small
vending machine operators that serve the school market differs from
the concentration of small operators in the industry as a whole.
---------------------------------------------------------------------------
(2) Food Service Management Companies.
FSMCs are potentially indirectly affected by the proposed rule.
FSMCs that provide [agrave] la carte foods to schools under contract
to SFAs will need to provide foods that conform to the changes in
the proposed rule. As with the SFAs, we anticipate that many of
those costs will have already been incurred through changes in the
school meal requirements.
Administrative Costs
The proposed rule requires that State agencies ensure that all
schools, SFAs, and other food groups comply with its competitive
food standards. State agencies must also retain documentation
demonstrating compliance. Schools, SFAs, and other food groups are
responsible for maintaining records documenting compliance with
competitive food standards. It is anticipated that the
administrative cost to 57 State agencies, 101,000 schools, and
21,000 SFAs will total $124 million over five years (or about $245
per school per year on average).
Distributional Impacts
A key characteristic associated with a school's dependence on
competitive food revenue is grade level. High schools are more
likely to offer competitive foods than are elementary schools. This
is true of [agrave] la carte foods, foods sold through vending
machines, and foods sold in school stores or snack bars.\24\
Competitive food revenue is also associated with a school's mix of
low and high income students. According to SNDA-III, schools serving
at least one-third of their meals at full price to higher income
students obtain more than seven times as much revenue from
competitive food sales as schools serving a larger percentage of
free and reduced-price (and hence lower-income) students.\25\ Other
factors that may be associated with student access to competitive
food sources and school revenue from competitive foods include
whether students have the option of leaving campus during the school
day, and whether schools grant students the right to leave the
cafeteria during meal times. Generally, student
[[Page 9550]]
mobility privileges increase with grade level.\26\ These factors are
not necessarily associated with school or SFA size.
---------------------------------------------------------------------------
\24\ U.S. Department of Agriculture, Food and Nutrition Service,
2007, School Nutrition Dietary Assessment Study-III, Vol. I by
Mathematica Policy Research, Inc., (SNDA-III), pp. 73-77, 86-89.
\25\ Unpublished ERS analysis of SNDA-III data.
\26\ Ibid., p. 78.
---------------------------------------------------------------------------
The most important source of competitive food revenue is
[agrave] la carte sales. Sales from vending machines are less
common, accounting for only about five percent of all competitive
food sales. In general, small schools are less likely than larger
schools to have vending machines accessible to students: just 36
percent of schools with fewer than 500 students had vending
machines. That increases to 48 percent of schools with 500 to 1,000
students and 78 percent of schools with more than 1,000
students.\27\
---------------------------------------------------------------------------
\27\ Ibid., p. 88.
---------------------------------------------------------------------------
Federal Rules That May Duplicate, Overlap or Conflict with the
Proposed Rule: FNS is unaware of any such Federal rules or laws.
Significant Alternatives: HHFKA requires USDA to establish
standards that are consistent with the most recent Dietary
Guidelines for Americans (DGA) using ``authoritative scientific
recommendations'' (HHFKA section 208). The proposed rule standards
reflect nutrition guidelines set forth in the 2010 DGA, by the
National Academies' Institute of Medicine in Nutrition Standards for
Foods in Schools (2007), standards already adopted by States and
localities, and standards identified by other organizations.
The proposed rule reflects a considered balance among these
guidelines. It is possible to derive an alternative, however, that
would require fewer changes to allowed competitive foods. While
different standards might reduce the cost of the rule for some
regulated parties, there is little evidence that the economic costs
of the rule fall disproportionately on the smallest SFAs, schools,
or other school groups within these schools. A rule less closely
aligned with DGA and other scientific recommendations would not
provide particular relief to these small entities, but may result in
fewer improvements to the school nutrition environment and
children's health.
USDA also considered a separate implementation schedule for
small entities.\28\ This may offer smaller schools and businesses
more time to adjust to the new requirements. But because the
majority of competitive food revenues come from [agrave] la carte
sales, and because [agrave] la carte foods will be subject to the
new school meal pattern requirements, many [agrave] la carte foods
will already meet healthier food standards when the proposed
competitive food rule becomes effective. While vending machines are
not subject to the meal pattern standards, they are more commonly
found in large schools: over three quarters of schools with more
than 1,000 students have vending machines as compared to a third of
schools with fewer than 500 students.\29\ FNS determined, therefore,
that the potential benefit of deferring implementation for smaller
schools would not outweigh the potentially adverse impact of
deferring important improvements to the school nutrition environment
for all children.
---------------------------------------------------------------------------
\28\ A more permissive compliance schedule for small entities is
one of the alternative cited in SBA, ``A Guide for Government
Agencies,'' p. 35.
\29\ SNDA-III., p. 88.
Regulatory Impact Analysis
Agency: Food and Nutrition Service, USDA.
Title: Nutrition Standards for All Foods Sold In School.
Nature of Action: Proposed Rule.
Need for Action: Section 208 of the Healthy, Hunger-Free Kids
Act of 2010 requires the U.S. Department of Agriculture (USDA) to
establish science-based nutrition standards for all foods sold in
schools during the school day. The standards proposed in this rule
are intended to help ensure that all foods sold at school--whether
provided as part of a school meal or sold in competition with such
meals--are aligned with the latest and best dietary recommendations.
They will work in concert with recent improvements in school meals
to support and promote diets that contribute to students' long-term
health and well-being. And they will support efforts of parents to
promote healthy choices for children, at home and at school.
Affected Parties: All parties involved in the operation and
administration of programs authorized under the National School
Lunch Act or the Child Nutrition Act that operate on the school
campus during the school day. These include State education
agencies, local school food authorities, local educational agencies,
schools, students, and the food production, distribution, and
service industry.
Abbreviations:
DGA Dietary Guidelines for Americans
FDA Food and Drug Administration
FMNV Foods of Minimal Nutritional Value
FY Fiscal Year
HHFKA Healthy, Hunger-Free Kids Act
IOM Institute of Medicine
NSLP National School Lunch Program
SBP School Breakfast Program
SFA School Food Authority
SLBCS-II School Lunch and Breakfast Cost Study II
SNDA-III School Nutrition Dietary Assessment III
SY School Year
USDA United States Department of Agriculture
Contents
I. Introduction
A. Overview
B. Background
C. Baseline
D. Previous Recommendations and Existing Standards
1. Institute of Medicine Recommendations
2. Voluntary Standards
3. Competitive Food Standards in Five Largest States
II. Development of Federal Standards
III. Cost--Benefit Analysis
A. Existing Research on Revenue Effects
B. Estimating School Revenue Changes
C. Impacts on Participating Children and Families
D. Administrative Costs
E. Industry Effects
F. Distributional Effects
1. Grade Level
2. Low Income Students
G. Benefits
H. Limitations and Uncertainties
1. Limitations in Available Research
2. Prices of Competitive Foods
3. State and Local Support of Reimbursable Meals
4. Student Response to New Standards
5. Industry Response
6. SFA and School Compliance
7. School Participation in the NSLP
8. Food and Labor Costs
IV. Alternatives
A. Full Implementation of IOM Recommendations
B. Less Comprehensive Standards
C. Exemption for Reimbursable Meal Entr[eacute]es and Side
Dishes
D. School-sponsored Fundraisers
E. Total Sugar
F. Naturally Occurring Ingredients and Fortification
G. Allowable Beverage Sizes in High School
H. Low Calorie Beverages
I. Caffeinated Beverages
V. Accounting Statement
VI. References
I. Introduction
A. Overview
There has been increasing public interest in the rising
prevalence of overweight and obesity in the United States,
particularly among children. The school nutrition environment is a
significant influence on children's health and well-being. Recent
studies have shown that children typically consume between 26 and 35
percent of their total daily calories at school, and as much as 50
percent for children who participate in both school lunch and
breakfast programs (Fox 2010; Guthrie, et al., 2009).
In response to these concerns, the Healthy Hunger-Free Kids Act
(HHFKA) of 2010 required USDA to establish science-based nutrition
standards for all foods sold in schools during the school day. The
standards proposed here are intended to help ensure that all foods
sold at school--whether provided as part of a school meal or sold in
competition with such meals--are aligned with the latest and best
dietary recommendations.
The proposed competitive food standards will work in concert
with recent improvements in school meals to support and promote
diets that contribute to students' long-term health and well-being.
Congress highlighted the relationship between school meal
improvements and standards for other school foods, noting that the
prevalence of ``unhealthy [competitive] foods in our schools not
only undermines children's health but also undermines annual
taxpayer investments of over $15.5 billion in the National School
Lunch and School Breakfast Programs'' (Senate Report 111-178, p. 8).
The benefits sought through this rulemaking focus on improving
the food choices that children make during the school day. A growing
body of evidence tells us that giving school children healthful food
options will help improve these choices. A recent, comprehensive,
and groundbreaking assessment of the evidence by the Pew
[[Page 9551]]
Health Group and Robert Wood Johnson Foundation concluded that:
A national competitive foods policy would increase
student exposure to healthier foods and decrease exposure to less
healthy foods, and
Increased access to a mix of healthier food options is
likely to change the mix of foods that students purchase and consume
at school, for the better.
Researchers for Healthy Eating Research and Bridging the Gap,
Robert Wood Johnson Foundation-sponsored research programs examining
environmental influences on youth diets and obesity, have concluded
that strong policies that prohibit or restrict the sale of unhealthy
competitive foods and drinks in schools improve children's diets and
reduce their risk for obesity.
Because setting national standards will change the range of food
products sold in schools, they may affect the revenues schools earn
from these foods, as well as participation in school meals. The
evidence on the overall impact of competitive food standards on
school revenues is mixed. However, a number of schools implementing
such standards have reported little change, and some increases, in
net revenues.
B. Background
Children generally have two options for school food purchases:
(1) Foods provided under the National School Lunch Program (NSLP),
the School Breakfast Program (SBP), or other child nutrition
programs authorized under the National School Lunch Act or the Child
Nutrition Act, and (2) competitive foods purchased [agrave] la carte
in school cafeterias or from vending machines at school. NSLP is
available to over 50 million children each school day; an average of
31.8 million children per day ate a reimbursable lunch in fiscal
year (FY) 2011. Additional children are served by the Child and
Adult Care Food and the Summer Food Service Programs that operate
from NSLP and SBP participating schools. While meals served through
these programs are required to meet nutritional standards based on
the most recent Dietary Guidelines for Americans (DGA), competitive
foods are subject to far fewer Federal dietary standards. Existing
regulations address only the place and timing of sales of foods of
minimal nutritional value (FMNV).\30\
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\30\ FMNV include carbonated beverages, water ices, chewing gum,
hard candy, jellies and gums, marshmallow candies, fondant,
licorice, spun candy, and candy-coated popcorn. The current policy
restricts the sales of FMNV during meal service in food service
areas. See 7 CRF 210.11.
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The sale of food in competition with Federal reimbursable
program meals and snacks is widespread. In school year (SY) 2004-
2005, 82 percent of all schools--and 92 percent of middle and high
schools--offered [agrave] la carte foods at lunch. Vending machines
were available in 52 percent of all schools, and 26 percent of
elementary schools, 87 percent of middle schools, and 98 percent of
high schools (Gordon, et al., 2007; Volume 1, pp. 102-114).\31\
Revenues from competitive foods, however, are far smaller than
revenues from USDA-funded school meals. In SY 2005-2006,
approximately 84 percent of school food authority (SFA) revenue was
derived from reimbursable school meals, from a combination of USDA
subsidies, State and local funds, and student meal payments. The
remaining 16 percent was derived from non-reimbursable food sales
(USDA 2008, p. xii). Half of secondary school students consume at
least one snack food per day at school, an average of 273 to 336
calories per day. This amount is significant considering that an
excess of 110 to 165 calories per day may be responsible for rising
rates of childhood obesity (Fox et al 2009, Wang et al 2006, cited
in Pew Health Group, 2012).
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\31\ SNDA-III found the top five most commonly offered [agrave]
la carte lunch items were milk, juice and water, snacks, baked
goods, and mixed dishes (for example, salads, pizza, etc.). For
vending machines, the top five most commonly offered items included
juice and water, other beverages (for example, carbonated and energy
drinks, coffee and tea, etc.) snacks, baked goods, and bread or
grain products.
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Many observers, including parents and military leaders, have
expressed concerns about the competitive foods available to children
at school (Gordon, et al., 2007; Christeson, Taggart, and Messner-
Zidell, 2010; Christeson, et al., 2012). In response, a number of
States have implemented competitive food standards. In 2004, GAO
reported that 21 States had created standards that went beyond
existing Federal standards. In 2010, the School Nutrition
Association reported that the number of States with competitive food
policies had increased to 36.32 33 34 More recently, the
Centers for Disease Control and Prevention (CDC) reported that 39
States had established competitive food policies as of October 2010;
in two of those States, legislation had recently passed to require
competitive food standards, but neither State had yet defined
specific standards.\35\ A 2012 study conducted for FNS found that at
least half of States had competitive food standards for foods sold
in vending machines, [agrave] la carte, school stores, and snack
bars, and almost half had nutrition standards for foods sold in bake
sales (Westat, 2012, p., 5-25).
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\32\ GAO-04-673. April 2004. The GAO identified 23 States, but 2
of the 23 had only created committees to assess competitive food
issues. The report considered both timing of competitive foods sales
and the types of products offered. In terms of timing, of the 21
States with competitive food policies, 14 limited access to
competitive foods at times associated with meal periods, 5 limited
competitive food sales during the entire school day, and 2 States
varied the standards by the type of school. In terms of the types of
foods, 6 of the 21 States limited access to all competitive foods, 8
limited access only to FMNV, and 7 States limited selected
competitive foods. Seventeen of the States limited access at all
grade levels, while the remaining 4 States had policies that applied
only to selected schools. GAO also found that within States,
individual schools and districts had policies that were stricter
than the State standards.
\33\ A recent study by Taber, et al. (2011), takes a broad look
at State competitive food standards, utilizing CDC data to estimate
effects of State policy changes between 2000 and 2006.
\34\ Similar to the GAO report, a report from the School
Nutrition Association (SNA) indicates 23 States had competitive food
policies on or before 2004. There is at least one difference among
the States identified by GAO and those identified by SNA, but it is
not clear how many other discrepancies may exist.
\35\ CDC included State laws, regulations, and policies enacted
or passed since October 2010. We use the term policy to generically
refer to all three.
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The Pew Health Group and Robert Wood Johnson Foundation recently
reviewed data on the types of snack foods and beverages sold in
secondary schools via vending machines, school stores, and snack
bars.\36\ The data were extracted from a biennial assessment from
the CDC that uses surveys of principals and health education
teachers to measure policies and practices across the nation. Key
findings show:
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\36\ ``Out of Balance: A Look at Snack Foods in Secondary
Schools across the States,'' The Pew Health Group and the Robert
Wood Johnson Foundation (2012). The report examines data contained
in N. D. Brener et al., ``School Health Profiles 2010:
Characteristics of Health Programs Among Secondary Schools in
Selected U.S. 21 Sites,'' U.S. Department of Human Services, Centers
for Disease Control and Prevention (2011).
---------------------------------------------------------------------------
The availability of snack foods in secondary schools
varies tremendously from state to state. This variation is likely
the result of a disparate patchwork of policies at the state and
local levels. Fewer than 5 percent of school districts have food and
beverage policies that meet or exceed the 2010 Dietary Guidelines
for Americans.
``Under this patchwork of policies, the majority of our
nation's children live in states where less healthy snack food
choices are readily available.''
Overall, the availability of healthy snacks such as fruits and
vegetables is limited. The vast majority of secondary schools in 49
states do not sell fruits and vegetables in snack food venues (Pew
Health Group, 2012).
C. Baseline Competitive Food Revenue
As shown in Table 1, we estimate that overall revenue in SFAs
will be about $34 billion to $36 billion each fiscal year between
2015 and 2018. Overall revenue includes the value of Federal
reimbursements for NSLP and SBP meals,\37\ student payments, and
State and local contributions. This estimate is derived from the
relationship between Federal reimbursements and total SFA revenue
estimated in the School Lunch and Breakfast Cost Study (SLBCS-II)
(USDA 2008).
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\37\ an estimate prepared for the FY 2013 President's Budget.
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USDA's most recent budget projections forecasted a total of
$16.0 billion in Federal meal reimbursements in FY 2014, exclusive
of the effects of sections 205 and 206 of HHFKA on Federal
reimbursements and competitive food revenue. We use findings from
the SLBCS-II about the relationship between Federal meal
reimbursements and overall SFA revenue to derive an estimate of
$31.6 billion in SFA revenue in FY 2014, and then adjust this upward
for HHFKA impacts \38\ to a total of $33.5 billion in SFA revenue in
that year.
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\38\ The estimated increase in SFA revenues in 2014 from these
provisions is $581 million for reimbursable meals, and $1.3 billion
for competitive food revenue, for a total increase of about $1.9
billion. See 76 Federal Register 35301-35318, especially p. 35305.
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Our estimate of competitive food revenues under current policies
and practices also uses
[[Page 9552]]
SLBCS-II,\39\ which showed that SFA competitive food revenue
accounted for 15.8 percent of overall SFA revenue prior to HHFKA.
For FY 2014, we begin with the estimated $31.6 billion in SFA
revenue that excludes the effects of HHFKA on Federal meal
reimbursements and student payments for program meals and
competitive foods. For FY 2014, that implies baseline SFA
competitive food revenues of $5.0 billion.\40\ We add an estimated
$1.3 billion increase in competitive food revenue from HHFKA Section
206 to get an adjusted $6.3 billion in SFA competitive food revenue.
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\39\ For purposes of this analysis we assume that the revenue
generated from competitive food sales has increased at the same rate
as the growth in SFA revenue from reimbursable paid lunches. For
years after FY 2010, we assume that baseline competitive food
revenue will increase at the same rate as the projected increase in
SFA revenue from reimbursable paid lunches contained in the FY 2013
President's Budget.
\40\ $31.6 billion x 15.8% = $5.0 billion.
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To estimate the proportions of these revenues generated by
[agrave] la carte sales and vending machines, we use SNDA-III data
to show that about 98.3 percent of SFA competitive food revenue was
generated by sales of [agrave] la carte foods; virtually all of the
rest, 1.7 percent, was generated by vending machine sales.
Data from SNDA-III indicate that 95 percent of competitive food
revenue accrues to SFA accounts; just five percent of competitive
food revenue accrues to non-SFA student, parent and other school
group accounts.\41\ Our estimate of competitive food revenue
generated by these groups in the last three months of FY 2014 is $40
million.\42\ If none of the competitive food revenue raised by non-
SFA school groups comes from [agrave] la carte, then [agrave] la
carte sales accounted for roughly 93 percent (= 0.98 x 0.95) of
total SFA and non-SFA competitive food revenue in SY 2004-2005.
---------------------------------------------------------------------------
\41\ ERS analysis of unpublished data from the third School
Nutrition Dietary Assessment Study (SNDA-III). Note that SNDA-III
may underestimate other school group revenues to the extent that
these groups share in revenue from school stores that sell food or
engage in separate fundraising events. SNDA-III reports that 44
percent of schools allow student group fundraisers, but 75 percent
of those schools tend to hold them less than once per week. Just 14
percent of schools operated snack bars or school stores that might
generate revenue for non-SFA school groups. For this reason, we
believe that our estimates capture the larger share of revenue
raised by these groups. According to SNDA-III's principals' surveys,
44 percent of schools sold competitive foods in vending machines and
through periodic fundraisers in SY 2004-2005. Just 11 percent of
schools sold competitive foods in school stores, and just 3 percent
sold competitive foods in school snack bars. See Gordon, et al.,
2007, vol. 1, pp. 77-79.
\42\ Because other school groups do not generate revenue from
[agrave] la carte sales, we start with the SFA competitive food
revenue excluding our estimate of the SFA competitive food revenue
increase from HHFKA, which is almost entirely from [agrave] la carte
sales. Our FY 2014 competitive food baseline for other school groups
is therefore: [($31.6 billion x 15.8 percent) / 0.95] x .05 = $263
million. The part year effect for the last three months of FY 2014
reduces that to $40 million.
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We inflate these full-year figures for 2015 through 2018 based
on the assumptions in the President's Budget. Because this analysis
assumes that the rule will take effect in July 2014, the start of SY
2014-2015, we reduce the FY 2014 figures in Table 1 to include only
the last three months of the fiscal year--about 15 percent of the
full-year figures.\43\
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\43\ The FY 2014 figures in Table 1 are just 15.1 percent of our
full year FY 2014 estimates. 15.1 percent is the ratio of paid
reimbursable lunches served from July through September 2011 to the
number of paid reimbursable lunches served from October 2010 through
September 2011. We use paid reimbursable lunches, rather than total
lunches or total Federal reimbursements, as the best proxy (among
available administrative data) for the share of competitive foods
purchased in the first three months of the fiscal year. An
unpublished ERS analysis of SNDA-III data found that schools with
the greatest share of children eligible for paid meals generate far
more competitive food revenue than schools with higher percentages
of free or reduced-price eligible children. For SFA revenue, the
figure in Table 1 is equal to $33.6 billion x 15.1 percent, or $5.1
billion.
Table 1--Baseline Competitive Food and Overall SFA Revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline SFA revenue (all sources)...................... $5,062 $34,045 $34,694 $35,350 $36,451 $145,601
Baseline competitive food revenue....................... 993 6,758 6,921 7,102 7,296 29,070
SFA revenue............................................. 954 6,492 6,651 6,828 7,013 27,938
[agrave] la carte................................... 937 6,382 6,538 6,712 6,894 27,463
vending and other sources........................... 16 110 113 116 119 475
Other school group revenue.............................. 40 266 270 274 283 1,132
[agrave] la carte................................... 0 0 0 0 0 0
vending and other sources........................... 40 266 270 274 283 1,132
--------------------------------------------------------------------------------------------------------------------------------------------------------
Other school groups generate their competitive food revenue from
periodic fundraisers, vending machines, snack bars, and school
stores. These groups include student clubs, parent teacher
organizations, or parent organizations supporting sports, music, and
other enrichment activities. Much of the non-SFA competitive food
revenue is controlled by school principals for special school
events, sports, or general fundraising.
Given the implementation of Section 206 and significant State
and local school food initiatives adopted since SY 2004-2005, our
baseline estimate of competitive food revenue generated by other
school groups is highly uncertain. We encourage reviewers of this
proposed rule to offer additional information that might improve
these estimates through the regulatory comment process.
D. Previous Recommendations and Existing Standards
Although HHFKA established Federal authority for comprehensive
nutrition standards for all foods in school, efforts to define and
implement such standards have been underway for a number of years.
Our analysis briefly describes these activities to provide
additional context for the proposed rule.
1. Institute of Medicine Recommendations
In 2005, Congress directed CDC to commission the Institute of
Medicine (IOM) to develop a set of nutrition standards for
competitive school foods (House Report 108-792). Nutrition Standards
for Foods in Schools: Leading the Way toward Healthier Youth set
forth its recommendations for nutrient and other standards. The
committee first identified a set of guiding principles, recognizing
that:
a. The present and future health and well-being of school-age
children are profoundly affected by dietary intake and the
maintenance of a healthy weight.
b. Schools contribute to current and lifelong health and dietary
patterns and are uniquely positioned to model and reinforce
healthful eating behaviors in partnership with parents, teachers,
and the broader community.
c. Because * * * foods and beverages available on the school
campus represent significant caloric intake, they should be designed
to meet nutrition standards.
d. Foods and beverages have health effects beyond those related
to vitamins, minerals, and other known individual components.
e. Implementation of nutrition standards for foods and beverages
offered in schools will likely require clear policies; technical and
financial support; a monitoring, enforcement, and evaluation
program; and new food and beverage products (IOM, 2007a, p. 3).
The committee then identified its intentions:
[[Page 9553]]
The federally reimbursable school nutrition programs
will be the primary source of foods and beverages offered at school.
All foods and beverages offered on the school campus
will contribute to an overall healthful eating environment.
Nutrition standards will be established for foods and
beverages offered outside the federally reimbursable school
nutrition programs.
The recommended nutrition standards will be based on
the Dietary Guidelines for Americans, with consideration given to
other relevant science-based resources.
The nutrition standards will apply to foods and
beverages offered to all school-age children (generally ages 4
through 18 years) with consideration given to the developmental
differences between children in elementary, middle, and high schools
(IOM, 2007a, p. 3).
Finally, the Committee recommended a two-tier system: Tier 1
consisting of foods and beverages to be encouraged and Tier 2
consisting of snack foods that do not meet Tier 1 criteria but still
meet the recommendations for fats, sugars, and sodium set forth in
the DGA.
Under the IOM recommendation, [agrave] la carte entr[eacute]es
would be required to be on the NSLP menu and meet Tier 1 criteria
with two exceptions: the amount of allowed sodium would increase
from 200 milligrams (mg) to no more than 480 mg, and the 200 calorie
limit imposed on Tier 1 foods would not apply; [agrave] la carte
entr[eacute]es would have to meet the calorie content of comparable
NSLP entr[eacute]e items.
2. Voluntary Standards
USDA's HealthierUS School Challenge (HUSSC), and the Alliance
for a Healthier Generation's Healthy Schools Program offer two
models of voluntary standards adopted by many schools across the
country.
HUSSC began in 2004 as a way to promote healthier school
environments through nutrition and physical activity, with four
award levels: bronze, silver, gold, and gold of distinction. HUSSC
includes standards for competitive foods that are similar to the
standards in the proposed rule. At all award levels, competitive
foods and beverages must meet the following standards:
No more than 35% of calories from total fat (excluding
nuts, seeds, nut butters and reduced-fat cheese),
Less than 0.5 grams (g) trans fats per serving,\44\
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\44\ Current rules allow manufacturers to report a product has
``zero grams'' of trans fat as long as there are less than 0.5 g
trans fat per serving. See 21 CFR Part 101.62.
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No more than 10% saturated fat (reduced-fat cheese is
exempt),
Total sugar must be at or below 35% by weight (includes
naturally occurring and added sugars. Fruits, vegetables, and milk
are exempt),
Portion sizes may not exceed the serving size of the
food served in school meals and other competitive foods may not
exceed 200 calories as packaged.
Only low-fat or fat-free milk and USDA approved
alternative dairy beverages may be offered,
Milk serving size is limited to 8-fluid ounces,
Fruit and vegetable juices must be 100% full strength
with no sweeteners or non-nutritive sweeteners, and
Water that is non-flavored, non-sweetened, non-
carbonated, non-caffeinated, without non-nutritive sweeteners is
allowed.
For bronze and silver awards, competitive food
standards apply to foods sold in the meal service area during meal
periods.
For gold and gold of distinction awards, competitive
food standards apply anywhere in the school and at any time during
the school day.
For bronze, silver, and gold awards, sodium cannot
exceed 480 mg for snack foods or 600 mg for entr[eacute]es.
For gold of distinction awards, sodium cannot exceed
200 mg for snack foods or 480 mg for entr[eacute]es.
As of January 2013, almost 5,000 schools in 49 States and the
District of Columbia were certified HUSSC schools, and all of these
schools, regardless of award level, have already moved at least part
way to the proposed competitive food standards.\45\
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\45\ FNS HealthierUS School Challenge at http://www.fns.usda.gov/tn/healthierus/index.html. A nutrition standards
chart is available at http://www.fns.usda.gov/tn/healthierus/award_chart.pdf.
---------------------------------------------------------------------------
Schools that are a part of the Alliance for a Healthier
Generation's Healthy Schools Program voluntarily adopt competitive
food standards that require:
No more than 35 percent of calories from total fat,
No more than 10 percent of calories from saturated fat,
0 g trans fat, and
No more than 480 mg sodium.
The Alliance for a Healthier Generation also recommends schools
serve whole grain products; fresh, canned, or frozen fruit (in fruit
juice or light syrup); and non-fried vegetables. The more than
14,000 schools currently participating in the Alliance for a
Healthier Generation Healthy Schools Program have also moved towards
the standards in the proposed rule.\46\
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\46\ School participation numbers are from the Healthy School
Program, Alliance for a Healthier Generation Web site. http://www.healthiergeneration.org/schools.aspx.
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3. Competitive Food Standards in Five Largest States
The five States with the largest numbers of students enrolled in
NSLP-participating schools are California, Florida, Illinois, New
York, and Texas. These States account for 37 percent of all students
enrolled nationally in NSLP participating schools (18.7 million
students). All five of these States have had school competitive food
policies since 2004 or earlier. School districts in these States
have already confronted some of the challenges of transitioning
students toward improved competitive foods and have dealt with the
consequences of any changes in overall revenues.
In California, elementary children may purchase only milk (2% or
less), fruit or vegetable juices that are at least 50 percent juice
with no added sweeteners, and water with no added sweeteners.
Generally, foods must not have more than 35 percent of calories from
fat, 10 percent of calories from saturated fat, and 0 calories from
trans fat, and no more than 35 percent sugar by weight. Nuts, nut
butters, seeds, eggs, cheese packaged for individual sale, fruit,
vegetables that have not been deep fried, and legumes are also
allowed for purchase. These standards apply regardless of the time
of day.
Middle and high school children may purchase water, milk (2% or
less), fruit and vegetable drinks that are at least 50 percent
juice, and electrolyte replacement beverages with no more than 2.1 g
of added sweetener per one fluid ounce. They may also purchase food
items [agrave] la carte as long as the foods have no more than 400
calories per entr[eacute]e and no more than four g of fat per 100
calories. Entr[eacute]es from NSLP meals are also allowed. These
standards are in place from 30 minutes before the school day through
30 minutes after the school day (CSPI, 2007).
Florida does not allow any competitive food sales on elementary
school campuses during the day and does not allow competitive foods
from vending, school stores, and other food sales in secondary
schools until an hour after the last lunch period. Carbonated
beverages are allowed if 100 percent fruit juices are also available
where those beverages are sold (CSPI, 2007).
Illinois policy on competitive foods applies only to grades
eight and below, for foods sold during the school day, with the
exception of foods that are sold as part of a reimbursable meal or
sold within the food service area. Allowable beverages include
water, milk, fruit and vegetable drinks that are at least 50 percent
fruit juice and yogurt or ice-based smoothie drinks with fewer than
400 calories that are made with fresh or frozen fruit or fruit
drinks containing at least 50 percent fruit juice.
Foods that are allowed to be sold outside food service areas or
within food service areas other than during meal service must have
no more than 35 percent of calories from fat and 10 percent of
calories from saturated fat, no more than 35 percent sugar by
weight, and may not contain more than 200 calories per serving.
Nuts, seeds, nut butters, eggs, cheese packaged for individual sale,
fruits or non-fried vegetables, or lowfat yogurt products are also
allowed (CSPI, 2007).
New York State broadly restricts the sales of FMNV and ``all
other candy'' from the beginning of the school day through the end
of the last scheduled meal period. New York's State Education
Department, however, allows competitive food standards to be set at
the district level (DiNapoli, 2009), and New York City, for example,
has adopted standards that are much more rigorous than the State-
level standards.
Competitive food sales standards within New York City schools
apply to food sales from the beginning of the school day through 6
p.m. weekdays. Students can sell New York State Department of
Education approved foods in schools any time during the day, as long
as the sale occurs outside of the school cafeteria. PTAs can hold a
monthly fundraiser during the day with non-approved food items as
long as the sale occurs outside
[[Page 9554]]
the cafeteria and complies with standards set in the Chancellor's
Regulations. Allowed beverages include water or low-calorie drinks
without artificial flavors or colors, at 10 calories per eight
ounces for elementary and middle schools and 25 calories per eight
ounces in high schools. Lowfat (1%) and fat free milk are also
allowed.
Snack vending machines are not permitted in schools with
students in pre-kindergarten through fifth grade. For students above
grade five, competitive foods must have no more than 35 percent of
calories from fat (nuts and nut butters are exempt), less than 10
percent of calories from saturated fat, and 0.5 g or less of trans
fat; no more than 35 percent of calories from sugar (fruit products
with no added sugar are exempt), less than 200 total calories, may
not exceed 200 mg sodium, and grain-based products must contain at
least two grams of fiber per serving (New York City, 2010).\47\
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\47\ These city-level food standards became effective in
February of 2010 and are different than the State-level standards
considered in the State schools food report card (CSPI, 2007).
---------------------------------------------------------------------------
Texas State policy does not allow the sale of FMNV or any food
or beverage that is not provided by school food service on
elementary school campuses until after the end of the last scheduled
class period (CSPI, 2007). Allowed beverages include milk (2% or
less), water, and 100 percent vegetable or fruit juices. For middle
schools, FMNV, candy, and carbonated beverages sales are not
permitted until the last scheduled class. Twelve ounce containers of
beverages, other than milk and FMNV, with no more than 30 g sugar
per eight ounces are allowed. These beverages might include sports
and fruit drinks and sweetened ice teas.
At the high school level, FMNV may be sold only after the last
scheduled class. Sugared and carbonated beverages of no more than 12
ounces may be offered, but only 15 percent of vending machine slots
or service points may be devoted to these beverages. In all grades,
individual food items may not contain more than 23 g of fat per
serving, with the exception that once per week one food with 28 g (1
ounce) of fat per serving is allowed.
Schools must eliminate deep-fat frying as a method of on-site
preparation for foods served as part of reimbursable school meals,
[agrave] la carte, snack lines, and competitive foods. Servings of
potatoes may not exceed three ounces, may be offered no more than
once per week, and students may only purchase one serving at a time.
Baked potato products (wedges, slices, whole, new potatoes) that are
produced from raw potatoes and have not been pre-fried, flash-fried
or par-fried in any way may be served without restriction. Fruit
and/or vegetables must be offered daily on all points of service
(CSPI, 2007).
While none of these States have policies that match all of the
standards in the proposed rule, California, Illinois, and New York
City meet several: California meets or exceeds the proposed
standards for calories; total, saturated, and trans fats; and sugar.
Illinois meets proposed standards for calories, total and saturated
fat, and sugar. New York City meets proposed standards for total,
saturated, and trans fats, sodium, and sugar. On the other end of
the spectrum, Texas only provides a standard for total fat (though
it is more restrictive than the proposed rule), and Florida does not
set specific nutrient standards.
Table 2 provides a summary description of a number of existing
sets of nutrition standards that are in already in place. These
include two voluntary programs: USDA's HealthierUS Schools Challenge
and the Alliance for a Healthier Generation's Healthy Schools
Program. We have also outlined the standards in effect in four of
the five States with the largest numbers of students enrolled in
NSLP-participating schools.\48\
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\48\ Florida is not included in this summary table because it
does not identify nutrient standards. Instead, it bans competitive
food sales on elementary school campuses during the school day and
does not allow competitive foods from vending, school stores, and
other food sales in secondary schools until an hour after the last
lunch period.
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BILLING CODE 3410-30-P
[[Page 9555]]
[GRAPHIC] [TIFF OMITTED] TP08FE13.000
BILLING CODE 3410-30-C
II. Development of Federal Standards
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\49\ Many of the standards provide exemptions for nuts, nut
butters, seeds, and fruits, etc. Those exemptions are not shown in
the table.
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Section 208 of the HHFKA, requires USDA to establish science-
based nutrition standards for all foods and beverages sold on school
campuses during the school day. These standards must be consistent
with the most recent DGA and authoritative scientific
recommendations (HHFKA, 2010, p. 98). The proposed rule addresses
all competitive foods and beverages sold on campuses throughout the
school day. It is guided by the same principles that underlie the
2007 IOM recommendations. At the same time, in developing the rule
FNS reviewed existing currently implemented State and local school
nutrition and voluntary standards to promote practicality and ease
of implementation.
The proposed rule improves the competitive food options
available to students by replacing less healthy items with
appropriately sized entr[eacute]es, side dishes, and snacks that
emphasize foods from the food groups that are the basis of a healthy
diet, consistent with the DGA. In this way, the rule is designed to
help ensure the success of school meal standards introduced in July
2012. However, the rule does not prescribe a specific set of
competitive foods, nor does it establish targets for particular food
groups. Instead, the proposed rule puts students in a position to
make their own healthy choices, and encourages the development of
healthy habits for life.
The proposed rule establishes guidelines for all foods sold
outside of school meal programs on the school campus at any time
during the school day. The school day for purposes of this rule
extends from midnight to 30 minutes past the end of the official
school day. The school campus includes all areas under jurisdiction
of the school that are accessible to students.
[[Page 9556]]
Schools may allow the sale of food that does not meet
proposed rule standards for school-sponsored fundraisers at a
frequency to be determined with the help of public comments on the
proposed rule. Exempted fundraiser foods may not be sold in
competition with school meals.
NSLP/SBP entr[eacute]es and side dishes sold [agrave]
la carte, with the exception of grain-based desserts which must
always meet all nutrition standards, will be exempt from proposed
rule standards subject to one of two alternatives. Alternative A1
would allow NSLP/SBP menu items that meet the proposed fat and sugar
standards to be sold [agrave] la carte at any time. Alternative A2
would exempt NSLP/SBP entr[eacute]es and side dishes from all
standards if sold during menu cycles, with two alternate limitations
(B1-B2)--that they can only be sold 1) on the day that they are
served as part of a meal, or 2) within four operating days of the
day they are served. USDA invites comments on these alternative
standards.
Competitive foods must meet all the proposed nutrient standards,
and must:
Contain 50 percent or more whole grains or have whole
grains as the first ingredient or be one of the non-grain main food
groups as defined by the 2010 DGA: Fruit, vegetable, dairy product,
protein foods (meat, beans, poultry, seafood, eggs, nuts, seeds,
etc.); or
Contain 10 percent of the daily value of a naturally
occurring nutrient of public health concern from the DGA (e.g.,
calcium, potassium, vitamin D or dietary fiber), or
Be a combination food that contains a half serving (\1/
4\ cup) of a fruit or vegetable.
If water is the food's first ingredient, the second ingredient
must satisfy the standard above.
Fresh, canned, and frozen fruits or vegetables with no
added ingredients except water, or in the case of fruit, packed in
100 percent juice or extra light syrup, are exempt from the proposed
rule's nutrient standards.
Competitive foods must contain 35 percent or less of
total calories from fat per portion as packaged. Exceptions from
these fat standards are granted for reduced fat cheese, nuts, seeds,
nut or seed butters, products consisting of only dried fruit with
nuts and/or seeds with no added nutritive sweeteners or fat, seafood
with no added fat.
Competitive foods must contain no more than 10 percent
of total calories from saturated fat, with the exception of reduced
fat cheese.
Competitive foods must have 0 g of trans fat.
Sodium content in snacks is limited to 200 mg per
portion as packaged for non-NSLP/SBP snack items. Non-NSLP/SBP
entr[eacute]e items must have no more than 480 mg of sodium per
portion.
Two alternative sugar standards are provided for
comment. The first would limit total sugar to 35 percent of
calories. The second would limit total sugar to 35 percent of
weight. Under both alternatives, exceptions are provided for fresh,
frozen, and canned fruits or vegetables with no added sweeteners
except for fruits packed in 100 percent juice or extra light syrup,
and dried whole fruits or vegetables, dried whole fruit or vegetable
pieces, and dried dehydrated fruits or vegetables with no added
nutritive sweeteners. Lowfat or nonfat yogurt with less than 30 g of
sugar for eight ounces is also permitted.
In general, competitive foods shall have no more than
200 calories per portion as packaged including accompaniments such
as butter, cream cheese, salad dressing, etc. for snack items and
side dishes sold [agrave] la carte. Entr[eacute]e items sold
[agrave] la carte shall contain no more than 350 calories.
Accompaniments should be pre-portioned and must be
included in the nutrient profile as a part of the item served and
meet all the proposed standards.
Elementary and middle school foods and beverages must
be caffeine free with the exception of naturally occurring trace
amounts.
Allowable beverages for elementary students are limited
to plain water, low fat milk, nonfat milk (including flavored),
nutritionally equivalent milk alternatives (as permitted by the
school meal requirements), and 100 percent fruit or vegetable
juices. All beverages must be no more than eight ounces with the
exception of water, which is unlimited.
Allowable beverages for middle school students are
limited to plain water, low fat milk, nonfat milk (including
flavored), nutritionally equivalent milk alternatives (as permitted
by the school meal requirements), and 100 percent fruit or vegetable
juice. All beverages must be no more than 12 ounces, with the
exception of water (which is unlimited).
Allowable beverages for high school students are
limited to plain water, lowfat milk, nonfat milk (including
flavored), nutritionally equivalent milk alternatives (as permitted
by the school meal requirements), and 100 percent fruit or vegetable
juice. Milk and milk equivalent alternatives and fruit or vegetable
juice must be no more than 12 ounces. Calorie-free, flavored and/or
unflavored carbonated water and other calorie free beverages that
comply with the FDA standard of less than five calories per serving
must be no more than 20 ounces.
Two alternative standards for low calorie beverages for
high school students are provided for comment. The first alternative
would allow beverages of up to 40 calories per 8 fl oz serving (or
60 calories per 12 fl oz). The second would allow up to 50 calories
per 8 fl oz (or 75 calories per 12 fl oz). Both alternatives limit
serving sizes to 12 fluid ounces or less. Beverages containing
caffeine are permitted at times other than at meal service. There is
no ounce restriction on water.
III. Cost-Benefit Analysis
The proposed rule requires schools to improve the nutritional
quality of foods offered for sale to students outside of the Federal
school lunch and school breakfast programs. Changing the mix of
competitive foods offered by schools will likely change student
expenditures on those foods, with potential implications for school
food service revenues. It may also change the extent to which
students purchase reimbursable school meals, resulting in changes in
amounts transferred from USDA to SFAs and from students to SFAs for
reduced price and paid meals.
This analysis examines a range of possible responses of students
and schools, and resulting changes in school revenue, based on the
experience of States, school districts, and schools with similar
standards. While evidence on the overall impact of competitive food
standards on school revenues is mixed, a number of schools
implementing such standards have reported little change, and some
have seen increases, in net revenues. Our analysis illustrates a
range of possible revenue impacts, all of which are relatively small
(+0.4 percent to -0.7 percent). By way of comparison, USDA has
previously estimated that the combined effect of the other school
food service revenue provisions included in HHFKA are expected to
increase overall school food revenue by roughly six percent.\50\ The
combined effect of that rule and this proposal is a net increase in
SFA revenue.
---------------------------------------------------------------------------
\50\ http://www.fns.usda.gov/cnd/Governance/regulations/2011-06-17.pdf.
---------------------------------------------------------------------------
The key benefit sought through this proposed rule is to improve
the food choices that children make during the school day. By
helping to ensure that all foods sold at school--those provided as
part of a school meal or sold in competition with such meals--are
aligned with the latest and best dietary recommendations, the rule
should also improve the mix of foods that students purchase and
consume at school.
In turn, though the complexity of factors that influence overall
food consumption and obesity prevent us from defining a level of
dietary change or disease or cost reduction that is attributable to
the rule, there is evidence that standards like those proposed in
the rule will positively influence--and perhaps directly improve--
eating patterns that contribute to students' long-term health and
well-being, and reduce their risk for obesity.
A. Existing Research on Revenue Effects
If the proposed standards are finalized and implemented,
students who currently purchase competitive foods will adjust their
behaviors in a number of ways in response. Some students will accept
the new competitive food offerings. Some will not and will turn
instead to the Federal reimbursable meals programs. Other students
will replace school food purchases with food from home. And, where
the option exists, students may spend their competitive food dollars
off campus. Student responses, in turn, will depend on the ability
of schools, food manufacturers, and the foodservice industry to
offer appealing choices.
It is instructive to begin with a review of studies and
evaluations of existing State and local standards. While none of the
existing standards are fully aligned with the provisions of the
proposed rule, they offer the best available insight into the likely
consequences of the proposed rule on school revenues and costs.
A number of studies have looked at the effects of implementation
of nutrition standards on school food service revenues in a handful
of States:
[[Page 9557]]
A series of studies examined California's Linking
Education, Activity and Food (LEAF) pilot program (Woodward-Lopez et
al. 2005a; Vargas et al 2005). Among 16 high schools that received
LEAF grants to implement competitive food standards adopted by
California, 13 reported increases in total food service revenues,
usually through increased reimbursable meal sales that offset a
concurrent decrease in [agrave] la carte sales. Net income increased
in three of the five sites that provided data on expenditures, and
fell at the other two sites. It is not clear how much of the
observed effects are solely due to the changes in competitive food
standards because the pilot schools received grants ranging from
about $200,000 to $740,000 for a 21 month implementation period
(Center for Weight and Health, 2005).
A related assessment of the impact of California's
legislated nutrition standards reports that 10 of 11 schools that
reported financial data experienced increases of more than five
percent in total food and beverage revenue after implementation
(Woodward-Lopez et al. 2010). Among the five schools that provide
data for non-food service sales of competitive foods and beverages,
four experienced a decrease in revenue of more than five percent and
one experience a modest increase.
An estimated 80 percent of surveyed principals in West
Virginia reported little or no change in revenues after
implementation of a state policy requiring schools to offer
healthier beverages and restrict ``junk foods'' and soda (West
Virginia University, 2009).
Pilot projects in Connecticut and Arizona report, in
some cases, increased food sales, increased meal participation, and
no significant change or loss in food service revenue (Long,
Henderson, and Schwartz, 2010; Arizona Healthy School Model Policy
Implementation Pilot Study, 2005).
Green Bay, Wisconsin officials reported that ``[w]hen
low-nutrient foods were removed from [agrave] la carte lines and
replaced with healthful alternatives, daily [agrave] la carte
revenue decreased by an average of 18 percent. However, the
decreased emphasis on [agrave] la carte sales prompted a 15 percent
increase in school meal participation[!]. The revenue generated by
the additional school meals more than doubled the lost [agrave] la
carte revenue. Therefore, bottom-line dollars for school foodservice
have increased overall'' (USDA, et al., 2005, p. 98).
South Carolina's Richland One District ``reported
losing approximately $300,000 in annual [agrave] la carte revenue
after implementing [competitive food] changes, [but] school lunch
participation and subsequent federal reimbursements increased by
approximately $400,000 in the same year'' (GAO 2005, p. 43).
Wharton, Long, and Schwartz (2008) reviewed ``the few
available'' revenue-related articles and studies focused on
healthier competitive food standards and determined that the ``* * *
data suggest that most schools do not experience any overall losses
in revenue'' after implementing healthier standards (p. 249).
Most studies have assessed the impact of nutrition
policies in the immediate post-implementation period. A recent
effort examined longer-term impacts. Comparing revenue data over
three years from 42 middle schools in five States, half of which
adopted healthier competitive food standards, Trevi[ntilde]o et al.
(2012) found no difference and concluded that providing healthier
food options is affordable and does not compromise school food
service finances.
The Pew Health Group addressed the issue of revenue changes due
to healthier competitive foods in its recent Health Impact
Assessment (HIA). After analyzing the relationship between State
policies and school-related finances, Pew researchers concluded
that:
[W]hen schools and districts adopted strong nutrition standards
for snack and a la carte foods and beverages, they generally did not
experience a decrease in revenue overall. In most instances, school
food service revenues increased due to higher participation in
school meal programs. However, in some cases, school districts
experienced initial declines in revenue when strengthening nutrition
standards. The HIA concluded that, over time, the negative impact on
revenue could be minimized--and in some cases reversed--by
implementing a range of strategies (Pew HIA, p. 4).
Similarly, after reviewing the evidence, the National Center for
Chronic Disease Prevention and Health Promotion at CDC concluded
that ``[w]hile some schools report an initial decrease in revenue
after implementing nutrition standards, a growing body of evidence
suggest that schools can have strong nutrition standards and
maintain financial stability'' (CDC, Implementing Strong Nutrition
Standards for Schools: Financial Implications, p. 2).
While the existing research suggests that any impact of
competitive food standards is likely to be relatively modest, there
is substantial variation in the experience and results to date. The
information available indicates that many schools have successfully
introduced competitive food reforms with little or no loss of
revenue. In some of those schools, losses from reduced sales of
competitive foods were fully offset by increases in reimbursable
meal revenue. In other schools, students responded favorably to the
healthier options and competitive food revenue increased or remained
at previous levels. But not all schools that adopted or piloted
competitive food standards fared as well. These experiences vary so
widely that they do not support a meaningful quantitative national
estimate of the proposal's net impact on program costs and revenues.
B. Estimating School Revenue Changes
To assess the impacts of the proposed rule on school revenue, we
reviewed the evidence summarized above and identified three
scenarios for student behavior and estimated the revenue changes
that could result:
Scenario 1: Relatively high student acceptance of new
competitive foods, thereby allowing schools to maintain existing
competitive food sales.
Scenario 2: Lower competitive food sales with fully
offsetting increases in school meal participation.
Scenario 3: Lower competitive food sales with partially
offsetting increases in school meal participation.
We assume that the percentage change in NSLP participation
([Delta]L) following implementation of competitive food standards
will be directly related to the percent change in competitive food
purchases ([Delta]CF), since a portion of competitive food purchases
are for lunch consumption. We assume that the change in competitive
food revenue occurs largely from students whose response to new
standards takes the form of increased or decreased demand, and that
all other students maintain previous levels of purchasing.\51\
Students who do not buy the new options are assumed to behave as if
competitive foods were not available, and we model their behavior
using the effect of competitive foods availability on NSLP
participation as measured by Gordon, et al. (2007). [Delta]L is then
the product of [Delta]CF and the competitive foods availability
effect (CFAE) divided by the baseline NSLP participation rate
(PR):\52\
---------------------------------------------------------------------------
\51\ This is in contrast to the possibility that all students
reduce their purchases by the same percentage.
\52\ This relationship assumes that (1) the increase in NSLP
participation must come from non-participants who bought competitive
foods as part of lunch, (2) that the decrease in competitive food
purchases occurs as a reduction in the number of students purchasing
competitive foods while students still purchasing competitive foods
do not change their behavior, and (3) the proportion of students who
switch from purchasing competitive foods as part of lunch to NSLP
participation is the same as the additional proportion of students
who participate in NSLP in schools where competitive foods are not
available.
---------------------------------------------------------------------------
[Delta]L = [Delta]CF x CFAE/PR
The value for CFAE is assumed to be -4.6 percentage points,
based on the finding by Gordon, et al. (SNDA III, vol. 2, p. 117)
that the NSLP participation rate was 4.6 percentage points higher in
schools that did not offer competitive foods during mealtimes
compared to those that did. The national average participation rate
measured in SNDA-III was 61.7 percent. The value of comparing
changes in competitive food revenue to changes in NSLP revenue is
limited to the extent that costs per dollar of gross revenue from
the two sources differ. Although we do not have the data necessary
to estimate profit margins on competitive foods, we expect that
margins on NSLP meals and [agrave] la carte items, the most
important subgroup of competitive foods, are similar.
We assume in our estimates that other school groups incur the
same percentage change in competitive food revenue as SFAs. This
assumption may not be realistic given the difference in the nature
of the foods sold in occasional fundraisers, in vending machines, in
snack bars, and in [agrave] la carte lines. However, given the
importance of this revenue source for its sponsors, we expect that
small or independent school groups will adapt in a manner that
result in a revenue impact comparable to that experienced by the
SFAs.
[[Page 9558]]
Scenario 1: High Student Acceptance of New Competitive Foods
For this scenario, we look to the experience of schools and
school districts that have maintained or increased competitive food
sales after introduction of healthier standards. With relatively
modest efforts to engage students in developing standards and to
promote healthier choices, these schools have demonstrated that
student demand for healthier competitive foods can be maintained or
increased.
Most competitive food revenue is generated by sales of [agrave]
la carte foods. If competitive food revenue continues to be driven
largely by [agrave] la carte sales, and the transition to healthier
school meals (and, by extension, healthier [agrave] la carte items)
is complete prior to the publication of competitive food standards,
then the incremental effect of those standards on competitive food
revenue in the short term could be relatively small.
Under this scenario, we assume a modest increase (five percent
in SY 2015-2016 following no change in the first year of
implementation) in competitive food revenue during the initial
transition to healthier competitive foods. We choose five percent to
match the minimum competitive food revenue increase recorded by
three of ten schools in the California Healthy Eating Active
Communities study (Woodward-Lopez, et al., 2010).
We then account for the costs incurred by schools that have
already adopted competitive food standards. While we cannot
precisely quantify these costs and revenue impacts, our review of
the standards in place in the four largest States and the nation's
largest school district provides a basis for a lower bound
adjustment: we reduce all of our estimates by 20 percent. After the
20 percent adjustment, we estimate an increase in competitive food
revenues of four percent ([Delta]CF = 4.0).
Case studies confirm the general NSLP participation effect
described in SNDA-III, suggesting that an increase in competitive
food purchases after implementation of the proposed rule may come at
the expense of NSLP participation. Because this scenario assumes a
small increase in competitive food revenues, we estimate that SFAs
will experience a slight (0.3 percent) decrease in school meal
participation ([Delta]L = -0.3).
We attribute 36 percent of the 0.3 percent change in the lunch
participation to students who are eligible for free and reduced-
price meals, and the other 64 percent to students who pay full
price,\53\ based on unpublished results showing that 64 percent of
competitive food purchases were made by students not eligible for
free or reduced-price meals.\54\ Our analysis also utilizes the
proportions of free, reduced-price, and paid lunches served
projected by USDA for the FY 2013 President's Budget. For FY 2011,
the observed proportions were 58, 8, and 33 percent for free,
reduced price, and paid meals.
---------------------------------------------------------------------------
\53\ Paid, reduced price, and free NSLP meals each have some
level of government subsidy, therefore even lunches that are ``full
price'' are subsidized.
\54\ Unpublished ERS analysis of SNDA-III data.
---------------------------------------------------------------------------
Using our estimate of a 0.3 percent decrease in NSLP
participation, we estimate effects on school meal participation, SFA
revenues from reimbursable meals, and Federal reimbursement
costs.\55\ Federal reimbursements are necessarily lower than SFA
revenues for the same meals since the SFA revenue includes student
payments for meals served at reduced or full price. Our estimated
reduction in Federal costs is the product of the estimated decrease
in NSLP meals multiplied by projections of the value of the
reimbursements for free, reduced price, and paid meals.\56\ The net
impact in schools whose experiences align with this estimate is an
overall school food revenue increase of roughly 0.4 percent.
---------------------------------------------------------------------------
\55\ Our baseline number of NSLP meals, like our baseline NSLP
revenue, begins with FNS program projections prepared for the 2013
President's Budget. These are adjusted for the changes in lunches
served as a result of the recently published rule to implement
Sections 205 and 206 of the HHFKA. See rule and RIA in Federal
Register, Vol. 76, No. 117, pp. 35301-35318.
\56\ FNS projections of Federal reimbursements for free, reduced
price, and paid lunches are those used to prepare the FY 2013
President's Budget, adjusted for changes for Sections 205 and 206 of
HHFKA.
---------------------------------------------------------------------------
Scenario 2: Lower Competitive Food Sales With Fully Offsetting
Increases in School Meal Participation
Evidence of the effects of nutrition standards on revenues from
competitive foods and beverages for this estimate is drawn from a
case study of Texas schools (Cullen and Watson, 2009).\57\ USDA's
analysis of the Texas data concluded that overall competitive food
purchases declined by six percent. Assuming each purchase
contributes roughly equivalently to revenues, this would suggest a
six percent decline in revenue from competitive food sales. To
adjust for States and school districts that have already adopted
competitive food standards, we assume that 20 percent of the revenue
impact has already been realized nationwide. That reduces the
estimated six percent competitive food revenue loss to 4.8 percent
([Delta]CF = -4.8)
---------------------------------------------------------------------------
\57\ The analysis that follows reflects the work of both the
USDA's ERS and the FNS.
---------------------------------------------------------------------------
In this scenario, we model the effects of moderately high
acceptance of competitive foods that meet proposed rule standards.
As students reduce their competitive food consumption in search of
alternatives, many turn to reimbursable meals. After implementation
of changes to competitive food and school meal standards, many of
the items offered [agrave] la carte (the largest component of SFA
competitive food sales) will be identical to components offered in
reimbursable meals. In this scenario, those most likely to turn away
from competitive foods are also those who recognize that they may be
able to get the same foods at lower price in an NSLP meal ([Delta]L
= 2.0). The net impact in schools whose experiences align with this
scenario is a small decrease in overall school food revenue of
roughly -0.03 percent.
It is possible that students' economic circumstances will play a
role in their decision to replace competitive foods with
reimbursable meals. Once reimbursable meals and competitive foods
are subject to comparably healthy standards, and the difference
between competitive foods and a reimbursable meal is reduced largely
to price, increased participation in the reimbursable meals program
may be particularly attractive to students who qualify for free or
reduced-price benefits.
Scenario 3: Lower Competitive Food Sales With Partially Offsetting
Increases in School Meal Participation
We illustrated above what could happen if competitive food
revenue falls by 4.8 percent ([Delta]CF = -4.8) and schools
experience a fully offsetting increase in school lunch
participation. It is possible, however, that fewer students will opt
for school meals, preferring to bring lunch from home or perhaps
purchase foods from outside vendors. For Scenario 3 we maintain the
reduction in competitive food revenue but suggest a lower increase
in NSLP participation. If NSLP participation increases 0.36 percent
([Delta]L = 0.36), the net impact in schools whose experiences align
with this estimate is a small decrease in overall school food
revenue of roughly -0.7 percent.
C. Impacts on Participating Children and Families
Beyond revenue impacts to SFAs and other school groups, changes
in food purchasing choices caused by the proposed rule will also
have an economic effect on children and their families. The
projected decreases in competitive food revenues represent
reductions in spending by school children and their families on
school-provided competitive foods. We do not have sufficient
information to estimate increases or decreases in overall spending
by students who find alternatives to school-provided competitive
foods. Some students will spend less overall by replacing
competitive foods consumption with free or reduced price school
meals. A decrease in competitive food sales may also increase foods
brought from home and/or foods purchased outside of schools. These
imply revenue increases for food industries that sell foods brought
from home and purchased outside the school setting.
The rule will not impact all students in the same way. For
example, price and availability of competitive foods may differ by
region of the country, constraining choices for some but not all
students. For some students, choices will be limited by their
incomes. For other students, alternatives to competitive foods will
be limited by school policy; students at schools with closed
campuses will have fewer options, but may benefit by choosing
healthier foods as a result.
D. Administrative Costs
Under the proposed rule, local educational agencies (LEAs) and
SFAs will be required to maintain records such as receipts,
nutrition labels, and/or product specifications for food items that
will be available to students on the school campus during the school
day. The purpose of this documentation is to ensure that those foods
comply with the competitive
[[Page 9559]]
food standards. Thus, there will be recordkeeping costs associated
with the proposed rule and these costs will occur at the State
agency level, the SFA and LEA level, and at the school level. The
estimated additional annual burden for recordkeeping under the
proposed rule is 926,935 hours, divided among the State agencies
(1,040 hours), LEAs and SFAs (417,160 hours), and schools (508,735)
hours. Our estimate uses data from the Bureau of Labor Statistics on
wages and salaries for State and local government employees and
assumes no growth in burden hours over time. Wages are inflated
using estimates from the 2013 President's Budget.\58\ Note that
there are no new reporting requirements in the proposed rule.
---------------------------------------------------------------------------
\58\ We use wages and salaries for administrative employment in
the state and local government sector from the Bureau of Labor
Statistics' ``Employer Cost for Employee Compensation'' database
(http://www.bls.gov/data/home.htm). For FY 2011, wages and salaries
for these positions averaged $23.52 per hour. We inflate these
through FY 2016 with projected growth in the State and Local
Expenditure Index prepared by OMB for use in the FY 2013 President's
Budget.
Table 3--Estimate of Administrative Costs for Recordkeeping for Proposed Rule
----------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
Recordkeeping -----------------------------------------------------------------------------
2014 2015 2016 2017 2018 Total
----------------------------------------------------------------------------------------------------------------
State Agencies.................... $0.03 $0.03 $0.03 $0.03 $0.03 $0.14
SFAs and LEAs..................... 10.8 11.1 11.5 11.9 12.2 57.4
Schools........................... 13.1 13.5 14.0 14.5 14.9 70.0
-----------------------------------------------------------------------------
Total......................... 23.9 24.7 25.5 26.3 27.2 127.6
----------------------------------------------------------------------------------------------------------------
It is also possible that some schools and LEAs may have
additional costs due to the proposed rule. For example, some schools
may require new equipment such as vending machines to accommodate
new products and package sizes. Additionally, schools and/or LEAs
may have contracts with vendors that will require modification which
could result in some additional labor cost. Those costs are not
estimated here because we lack sufficient information on how many
schools or LEAs could be affected and how those costs might be
distributed among affected locations.
E. Industry Effects
Although they are not directly regulated by the proposed rule,
food manufacturers and distributors will face changes in demand by
schools and SFAs in response to the rule.
Manufacturers will face reduced school demand for some products
and increased demand for others. Some food manufacturers may not
have existing product lines that meet the proposed rule's
requirements and may lose market share to other manufacturers. The
impact of tightening the nutritional standards for food and
beverages sold at public schools in the United States on food
vendors is difficult to know ex-ante. It is likely that the
elasticity of demand for food at schools is quite steep, implying
that absent available alternatives, most consumption behavior will
change aggregate sales by a small amount.
U.S. SFAs that participate in the NSLP purchased roughly $8.5
billion in food in SY 2009-2010, including the value of USDA
foods.\59\ That represents only about 1.3 percent of the $644
billion worth of shipments from U.S. food manufacturers in 2010.\60\
FNS estimates that SFA revenue from competitive food equals about 20
percent of overall SFA revenue (see Table 1). If we assume that the
ratio of food cost to revenue is consistent between competitive
foods and other school foods, then SFA purchases of competitive
foods totaled about $1.7 billion in SY 2009-2010. That represents
only about 0.3 percent of the $644 billion worth of shipments from
U.S. food manufacturers in 2010.
---------------------------------------------------------------------------
\59\ USDA School Food Purchase Study III, 2012.
\60\ Bureau of Economic Analysis, Gross Domestic Product by
Industry, data for NAICS 311 and 312, excluding animal foods,
tobacco and alcoholic beverages (http://bea.gov/industry/xls/GDPbyInd_SHIP_NAICS_1998-2011.xls)
---------------------------------------------------------------------------
According to the 2007 Economic Census, about 23.4 percent of
food manufacturing sales are by firms with 100 or fewer
employees.\61\ If we assume that competitive food sales are
distributed to firms in proportion to their share of overall sales,
we can estimate that in 2010 figures, about $400 million of
competitive food sales is carried out by these small businesses, out
of over $150 billion in total sales by these firms.
---------------------------------------------------------------------------
\61\ Bureau of the Census, 2007 Economic Census (http://www.census.gov/econ/census07)/.
---------------------------------------------------------------------------
Implementing nutrition standards for competitive foods will
result in a more nutritious, and potentially more expensive, mix of
foods offered. If we assume that the cost of these foods is, on
average, seven percent higher under the new standards--comparable to
the estimated cost increase for school meals under updated nutrition
standards--and that this increase will reduce demand for these foods
comparably to school meals,\62\ we would expect to see a two percent
reduction in overall sales of competitive foods--about $34 million
of the $1.7 billion in sales estimated for SY 2009-2010, with about
$8 million of these losses experienced by small business.
---------------------------------------------------------------------------
\62\ See Gleason, ``Participation in the National School Lunch
Program and the School Breakfast Program,'' Am J Clin Nutr 61: 213S-
220S.
---------------------------------------------------------------------------
While data is not available to estimate the possible
distributional effects across the food industry overall, research
indicates that some of the marketplace changes that would be
required under the proposed standards are already taking place.
Wescott et al. (2012), for example, found that between 2004 and 2009
the beverage industry reduced the number of calories shipped to
schools by 90 percent, with a total volume reduction in full-calorie
soft drinks of over 95 percent. Therefore, at least with respect to
these products, many of the changes required by the proposed rule
have already taken place under existing self-regulation and State
and local standards, reducing the net impact of Federal standards
relative to current conditions.
Local vending machine operators may also face some changes to
their current business model. Although the effect of the proposed
rule on individual operators will vary, available industry and
school data suggest that the effect on this industry group as a
whole will be small. Vending machine sales made up a small
percentage of total competitive food revenue in SY 2004-2005. We
estimate that [agrave] la carte sales accounted for 93 percent of
total competitive food revenue. The remaining seven percent is
generated by a variety of alternate sources. Although vending
machines are the most common of these alternate sources of
competitive food revenue (they were found in 52 percent of schools
in SY 2004-2005 (Gordon, et al., 2007, vol. 1, pp. 96-100)) they are
not the only alternate source. About 26 percent of schools offered
competitive food in school stores, snack bars, food carts, and
occasional fundraisers (Gordon, et al., 2007, vol. 1, p. 101).
Vending and manual foodservice operators served 19,000 primary
and secondary schools in 2008, which was down about 14 percent from
2006 (VendingTimes.com, p. 3).\63\ Primary and secondary schools
accounted for just 2.2 percent ($1 billion out of $45.6 billion) of
total vending machine sales in 2008 (VendingTimes.com, p. 3).
---------------------------------------------------------------------------
\63\ This figure is much smaller than the 52 percent of schools
figure from SNDA-III. The vending industry data was gathered through
a survey of vending machine operators, providers of coin-operated
entertainment services, coffee-break service providers, and related
industry subgroups.
---------------------------------------------------------------------------
These data suggest that the impact of the proposed rule on the
vending machine industry as a whole will be limited. Just a small
share of vending industry revenue is generated in primary and
secondary schools. And, importantly, some of that revenue is
generated from sales of foods that are already compliant with the
proposed rule standards, such as 100 percent juice and bottled
water. Other products found in school vending machines in SY 2004-
2005 were also likely
[[Page 9560]]
compliant or near-compliant with the proposed rule.\64\
---------------------------------------------------------------------------
\64\ The SNDA-III data do not allow us to identify which other
products in school vending machines are compliant with the proposed
rule standards. Nor does the data allow us to estimate revenue from
vending machine sales of compliant products. Nevertheless, the list
of foods found in school vending machines includes several
categories of products, in addition to water and 100 percent juice,
that are likely compliant with the proposed rule, or include
specific products that are compliant. These include milk, other
lowfat dairy products, certain low calorie beverages, snacks such as
pretzels and reduced-fat chips, and even fruits and vegetables. See
Gordon, et al., 2007, pp. 104-105.
---------------------------------------------------------------------------
Both industry and Census Bureau data indicate that most vending
machine operations are small businesses. The majority of vending
machine operators that operated for the entire year in 2007 (76
percent) employed fewer than ten individuals according to the U.S.
Economic Census.\65\ About 37 percent of operators generated less
than $250,000 in receipts, although those operators accounted for
less than three percent of total revenue from this industry
group.\66\ Some small vendors may be challenged by the changes
contained in the proposed rule. Whether small or large, many vending
machine operators will need to modify their product lines to meet
the requirements of the rule.
---------------------------------------------------------------------------
\65\ Data for NAICS code 454210, ``vending machine operators.''
U.S. Census Bureau, http://www.census.gov/econ/industry/ec07/a454210.htm (accessed 11/13/2011).
\66\ Ibid. Note that these statistics are for all vending
machine operators in NAICS code 4545210, not just those that serve
the school market. We do not know whether the concentration of small
vending machine operators that serve the school market differs from
the concentration of small operators in the industry as a whole.
---------------------------------------------------------------------------
Limited data from California suggests that the transition to
healthier competitive foods can be managed, that healthier foods can
be marketed successfully in schools, and that competitive food sales
outside of the [agrave] la carte line need not decline. In the first
year healthier competitive food policies under California Senate
Bill 19 (2001), seven of ten pilot sites that were able to report
such data saw per capita decreases in non-foodservice competitive
food sales (Center for Weight and Health, UC Berkeley, 2005, p. 12).
However, vending machine and/or school store revenue increased in
two other sites (both high schools) which led researchers to
conclude that ``SB 19 compliant foods and beverages can be marketed
successfully at the high school level'' (Center for Weight and
Health, UC Berkeley, 2005, p. 12).
F. Distributional Effects
1. Revenues and Grade Level
Competitive food purchases and revenues are not equally
distributed across schools. Elementary schools derive much less
revenue from competitive foods than do secondary schools. They are
typically smaller, much less likely to have vending machines, and
usually serve a smaller assortment of [agrave] la carte items.
According to SNDA-III, high schools obtain almost three times as
much revenue from competitive foods as do elementary schools;
therefore, changes in competitive food standards will have a greater
impact at the middle- and high-school levels than they will in
elementary schools.
2. Low-Income Students
Differences in competitive food revenues by free and reduced-
price meal participation, one indicator of whether schools serve
primarily lower-income students, are even more dramatic. According
to SNDA-III, schools serving at least one-third of their meals at
full price to higher income students obtain more than seven times as
much revenue from competitive food sales as schools serving a larger
percentage of free and reduced-price (and hence lower-income)
students.\67\ However as noted previously, revenues may drop more in
terms of percentages at lower-income schools if low-income students
are more price-sensitive than high-income students.\68\ This
difference is mirrored in the behavior of low income students. About
two-thirds (64 percent) of competitive foods and beverages are
selected by students who are not receiving free or reduced price
meals.
---------------------------------------------------------------------------
\67\ Unpublished ERS analysis of SNDA-III data.
\68\ Woodward-Lopez, et al., 2010.
---------------------------------------------------------------------------
Given these purchasing patterns, revenue losses would be
substantial if students who previously bought competitive foods and
beverages not allowed under the Federal standards simply stopped
buying any foods. The revenue losses would be concentrated in
secondary schools and schools serving higher proportions of non-poor
students, i.e., students not eligible for free or reduced-price
meals. However, case studies based on experience with established
State- or district-level nutrition standards indicate that many
students will substitute other competitive food and beverage
purchases, or switch to purchasing USDA school meals. This would
likely result in reducing revenue losses substantially. In
predominantly low income schools, students may be even more inclined
to turn to reimbursable meals if not satisfied with competitive food
options. For those students, a free or reduced price meal may become
the most attractive option.
Finally, there is some suggestion that access to healthy foods
in schools varies by the socio-economic standing of the school and
its neighborhood (Tipler, 2010). Improved nutrition standards for
competitive foods could lessen the nutrition gap among schools.
G. Benefits
The proposed rule is intended to help ensure that all foods sold
at school--whether provided as part of a school meal or sold in
competition with such meals--are aligned with the latest and best
dietary recommendations. They will work in concert with recent
improvements in school meals to support and promote diets that
contribute to students' long-term health and well-being. And they
will support efforts of parents to promote healthy choices for
children, at home and at school.
A growing body of evidence tells us that giving school children
healthful food options will help them make healthier choices during
the school day. In 2012, the Pew Health Group and the Robert Wood
Johnson Foundation conducted an extensive Health Impact Assessment
to evaluate potential benefits that could result from national
standards for competitive foods sold in schools during the school
day. They concluded that:
A national competitive foods policy would increase
student exposure to healthier foods and decrease exposure to less
healthy foods; and
Increased access to a mix of healthier food options is
likely to change the mix of foods that students purchase and consume
at school, for the better.
These kinds of changes in food exposure and consumption at
school are important influences on the overall quality of children's
diets. While nutrition standards for foods sold at school may not on
their own be a determining factor in children's overall diets, they
are a critical strategy to provide children with healthy food
options throughout the entire school day, effectively holding
competitive foods to the same standards as the rest of the foods
sold at school during the school day. This, in turn helps to ensure
that the school nutrition environment does all that it can to
promote healthy choices, and help to prevent diet-related health
problems. Ancillary benefits could derive from the fact that
improving the nutritional value of competitive foods may reinforce
school-based nutrition education and promotion efforts and
contribute significantly to the overall effectiveness of the school
nutrition environment in promoting healthful food and physical
activity choices.
The link between poor diets and health problems such as
childhood obesity are a matter of particular policy concern given
their significant social and economic costs. Obesity has become a
major public health concern in the U.S., second only to physical
activity among the top 10 leading health indicators in the United
States Healthy People 2020 goals.\69\ According to data from the
National Health and Nutrition Examination Survey 2007-2008, 34
percent of the U.S. adult population is obese and an additional 34
percent are overweight (Ogden and Carroll, 2010).
---------------------------------------------------------------------------
\69\ ``Food Labeling: Calorie Labeling of Articles of Food in
Vending Machines.'' NPRM. 2011.
---------------------------------------------------------------------------
The trend towards obesity is also evident among children; 33
percent of U.S. children and adolescents are now considered
overweight or obese (Beydoun and Wang, 2011), with current childhood
obesity rates four times higher in children ages 6 to 11 than they
were in the early 1960s (19 vs. 4 percent), and three times higher
(17 vs. 5 percent) for adolescents ages 12 to 19 (IOM, 2007b, p.
24). These increases are shared across all socio-economic classes,
regions of the country, and have affected all major racial and
ethnic groups (Olshansky, et al., 2005).
Excess body weight has long been demonstrated to have health,
social, psychological, and economic consequences for affected adults
(Guthrie, Newman, and Ralston, 2009; Wang, et al., 2008). Recent
research has also demonstrated that excess body weight has negative
impacts for obese
[[Page 9561]]
and overweight children. Research focused specifically on the
effects of obesity in children indicates that obese children feel
they are less capable, both socially and athletically, less
attractive, and less worthwhile than their non-obese counterparts
(Riazi, et al., 2010).
Further, there are direct economic costs due to childhood
obesity; $237.6 million (in 2005 dollars) in inpatient costs
(Trasande, et al., 2009) \70\ and annual prescription drug,
emergency room, and outpatient costs of $14.1 billion (Cawley,
2004).
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\70\ Trasande, et al., 2009 report that between 1999 and 2005,
hospitalizations related to obesity increased 8.8 percent among
children ages 2 to 5, 10.4 percent among children 6 to 11, and 11.4
percent among children ages 12 to 19 after controlling for other
factors.
---------------------------------------------------------------------------
Childhood obesity has also been linked to cardiovascular disease
in children as well as in adults. Freeman, Dietz, Srinivasan, and
Berenson (1999) found that ``compared with other children,
overweight children were 9.7 times as likely to have 2
[cardiovascular] risk factors and 43.5 times as likely to have 3
risk factors'' (p. 1179) and concluded that ``[b]ecause overweight
is associated with various risk factors even among young children,
it is possible that the successful prevention and treatment of
obesity in childhood could reduce the adult incidence of
cardiovascular disease'' (p. 1175).
It is known that overweight children have a 70 percent chance of
being obese or overweight as adults. However, the actual causes of
obesity have proven elusive (ASPE, no date). While the relationship
between obesity and poor dietary choices cannot be explained by any
one cause, there is general agreement that reducing total calorie
intake is helpful in preventing or delaying the onset of excess
weight gain.
There is some recent evidence that competitive food standards
can improve children's dietary quality:
Taber, Chriqui, and Chaloupka (2012) compared calorie
and nutrient intakes for California high school students--with
competitive food standards in place--to calorie and nutrient intakes
for high school students in 14 States with no competitive food
standards. They concluded that California high school students
consumed fewer calories, less fat, and less sugar at school than
students in other States. Their analysis ``suggested that California
students did not compensate for consuming less within school by
consuming more elsewhere'' (p. 455). The consumption of fewer
calories in school ``suggests that competitive food standards may be
a method of reducing adolescent weight gain'' (p. 456).
A study of competitive food policies in Connecticut
concluded that ``removing low nutrition items from schools decreased
students' consumption with no compensatory increase at home''
(Schwartz, Novak, and Fiore, 2009, p. 999).
Similarly, researchers for Healthy Eating Research and
Bridging the Gap found that ``[t]he best evidence available
indicates that policies on snack foods and beverages sold in school
impact children's diets and their risk for obesity. Strong policies
that prohibit or restrict the sale of unhealthy competitive foods
and drinks in schools are associated with lower proportions of
overweight or obese students, or lower rates of increase in student
BMI'' (Healthy Eating Research, 2012, p. 3).
Pew Health Group and Robert Wood Johnson Foundation researchers
noted that the prevalence of children who are overweight or obese
has more than tripled in the past three decades, which is of
particular concern because of the health problems associated with
obesity. In particular, researchers found an increasing number of
children are being diagnosed with type 2 diabetes, high cholesterol,
and high blood pressure. These researchers further observed that
children with low socioeconomic status and black and Hispanic
children are at a higher risk of experiencing one or more of these
illnesses (pp. 39-40, 56).
Their analysis also noted that:
[T]here is a strong data link between diet and the risk for
these chronic diseases. Given the relationship between childhood
obesity, calorie consumption, and the development of chronic disease
risk factors at a young age, this report proposes that a national
[competitive food] policy could alter childhood and future chronic
disease risk factors by reducing access to energy-dense snack foods
in schools.
To the extent that the national policy results in increases in
students' total dietary intake of healthy foods and reductions in
the intake of low-nutrient, energy-dense snack foods, it is likely
to have a beneficial effect on the risk of these diseases. However,
the magnitude of this effect would be proportional to the degree of
change in students' total dietary intake, and this factor is
uncertain (p. 68).
In summary, the most current, comprehensive, and systematic
review of existing scientific research concluded that competitive
foods standards can have a positive impact on reducing the risk for
obesity-related chronic diseases.
Because the factors that contribute both to overall food
consumption and to obesity are so complex, it is not possible to
define a level of disease or cost reduction that is attributable to
the changes in competitive foods expected to result from
implementation of the rule. USDA is unaware of any comprehensive
data allowing accurate predictions of the effect of the proposed
requirements on consumer choice, especially among children. But to
illustrate the magnitude of the potential benefits of a reduction in
childhood obesity, based on $237.6 million in inpatient costs and
$14.1 billion in outpatient costs, a one percent reduction in
childhood obesity implies a $143 million reduction in health care
costs.
Some researchers have suggested possible negative consequences
of regulating nutrition content in competitive foods. They argue
that not allowing access to low nutrient, high calorie snack foods
in schools may result in overconsumption of those same foods outside
the school setting (although as noted earlier, the Taber et al.
study concluded overcompensation was not evident among the
California high school students in their sample). Some groups have
expressed concerns that the focus on competitive foods is less on
nutrition than obesity, thus regulating competitive foods may
contribute to bodyweight and/or appearance issues and result in
increasing body insecurity feelings among children. The focus on
obesity may also increase the stigmatization of children who are
perceived as being obese.
H. Limitations and Uncertainties
We conducted this analysis using available data; due to the
limitations of these data, there are some important qualifications
to our analysis that should be noted. We discuss a few of these
below.
1. Limitations in Available Research
Available research generally supports the notion that school
food revenues will not necessarily be adversely affected by the
implementation of healthier competitive food standards. Some schools
or school districts, however, have seen revenue losses. Cullen and
Watson (2009, p. 709) note that smaller districts might ``have more
barriers associated with the bidding and food contract process and
availability of alternative products'' relative to large districts.
In addition, a five-month pilot program in North Carolina elementary
schools saw decreases in competitive food sales with no offsetting
increase in school meal participation. The published summaries of
the pilot outcomes attribute all of the loss to reduced competitive
food revenue and increases in the cost to schools of acquiring foods
(NC GA 2011). North Carolina's State Superintendent commented on the
lack of available foods that met the pilot standards and although
she stated that increases in the availability of appropriate
replacements would likely improve the economic impact of the
healthier food standards, she still had concerns that healthier
products may never generate the revenue necessary to meet North
Carolina school needs (NC GA 2011, p. 2 Atkinson letter).
2. Prices of Competitive Foods
We do not have actual prices paid for specific competitive food
and beverage items. While we assume that competitive items meeting
and not meeting the proposed rule standards contribute equally to
revenues, this is uncertain. It is likely that reformulated versions
of existing competitive foods will cost at least as much as foods
currently available, if for no other reason than the new items do
not have the same market share. However, to meet calorie or fat
standards, manufacturers may simply reduce package sizes, e.g.,
replacing 16 ounce 100 percent juice drinks with four or eight ounce
bottles. In those cases, there is little reason to expect higher
prices. Additionally, not all compliant foods will be close
substitutes for existing foods, e.g., fruit drinks that are not 100
percent fruit juice may be replaced by bottled water at a similar or
lower cost.
3. State and Local Support of Reimbursable Meals
Information on State and local payments in support of USDA
school meals is not available. Some States and localities make
payments that are tied to USDA school meal participation. If
combined Federal, State, and local payments are greater (or less)
than the
[[Page 9562]]
costs of producing meals, SFAs would likely make lunch pricing
decisions with a view toward optimizing their levels of Federal,
State, and local subsidies.
4. Student Response to New Standards
Only a few limited case studies assess possible behavior change
that may occur in response to the proposed rule. Even these limited
studies are based on standards that are not exactly the same as the
proposed rule. The local conditions in which they take place may not
match national conditions. Implementation of State standards may
have been accompanied by other factors, such as nutrition education
or promotion of school meals, which may have influenced outcomes.
While we believe that the evidence we examined is generally
consistent with the suggestion that new standards will be associated
with purchases of healthier competitive foods and increased school
meal participation, data limitations create considerable uncertainty
about the size of these changes. We also lack information on changes
in purchasing behavior over time. As students adjust to the new
range of competitive options, their purchasing behavior could adapt,
altering revenue patterns.
5. Industry Response
This analysis assumes that food manufacturers and vendors, SFAs,
and other school groups that sell competitive foods and beverages
will adapt their behaviors in response to the proposed rule. Studies
of State and local changes in competitive food and beverage policies
indicate that these behavioral changes will occur (Cullen and
Watson, 2009; Wharton, Long, and Schwartz, 2008; Woodward-Lopez, et
al., 2010; USDA 2005). We draw on this literature to estimate the
possible effects of behavioral changes on competitive food and
beverage revenues.
This literature indicates that to a large extent, lost revenues
from products that can no longer be sold in schools because of the
proposed rule may be offset by increased purchases of products that
are already widely available and purchased as competitive items (for
example, bottled water) or by purchases of newly available,
healthier products. In some cases changes are relatively simple. For
example juices currently sold in 12-oz containers could be sold in
8-oz or 4-oz containers, as appropriate for grade level. In other
cases, reformulations of existing products are already underway.
Actions by State agencies and voluntary groups such as Alliance for
a Healthier Generation have already encouraged food manufacturers to
develop new products for competitive food sales: 4-oz fruit bowls;
nonfat, no-sugar added frozen yogurt; 4-oz frozen fruit bars; and
reduced-fat and sodium pizza with whole grain crust (Alliance for a
Healthier Generation, 2010). Food service staff in California,
however, also reported that more products are needed and that the
costs of such products are frequently higher than those they replace
(Woodward-Lopez, et al., 2005b).
Establishment of Federal standards is likely to spur further
product development and increased sales volume that may help to
bring prices in line with those of less-nutritious competitive
items. Because State and local experience to date has preceded the
establishment of Federal standards, their results may overstate the
challenges that schools will face in implementing the proposed rule.
The pressures on school revenue from high costs and limited
availability could ease in the period between publication of
proposed rule standards and the effective date of a final rule.
6. SFA and School Compliance
Early studies on competitive food revenues indicate that not all
schools have complied with existing State competitive food
standards.\71\ This may be due, in part, to a lack of approved
product choices, especially for early implementers. Compliance may
be less of a challenge with national standards, especially as
industry and students continue to adapt to State standards already
in place. But, to the extent that schools fail to implement or fully
enforce certain provisions of the proposed rule, the revenue impact
of the rule will be lower. Each of our estimates assumes full
compliance with the proposed rule.
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\71\ See, for example, SNDA-III, V. 1, 2007; Woodward-Lopez, et
al., 2005b; Bullock, et al., 2010; Woodward-Lopez, et al., 2010.
---------------------------------------------------------------------------
7. School Participation Federal Meal Programs
It is possible that some schools could choose to leave NSLP and
SBP to avoid the new competitive food standards. Although some
schools may realize significant losses in revenue from competitive
foods, especially in the short term, we believe it is unlikely that
many, if any, will choose to do so. On average, SFAs receive just 16
percent of their total revenue from competitive foods; 84 percent of
revenue is derived from Federal reimbursements for NSLP and SBP
meals, student payments, and State and local contributions tied to
those meals (USDA, 2008).
8. Food and Labor Costs
This analysis focuses on revenues in SFAs and other school
groups. It does not address food and labor costs directly because
few of the research reports and case studies report detailed cost
information. One study (Trevi[ntilde]o et al., 2012) that did report
expenses and labor costs in addition to revenues found no
statistically significant difference between intervention and
control schools after the intervention schools implemented stronger
competitive food standards. Although the differences were not
statistically different, intervention schools were found to have
higher excess revenue over expenses than the control schools ($3.5
million versus $2.4 million) (pg. 421).
Although we do not address costs directly, we expect that cost
will have a limited effect on the net revenue of SFAs and other
school groups. SFA competitive food revenue is derived primarily
from [agrave] la carte sales. Under the proposed rule, [agrave] la
carte items that are available as part of a reimbursable meal are
deemed to meet the new standards and those items will be subject to
new school meal standards under regulations that will take effect
prior to this competitive foods rule.\72\ To the extent that
schools' [agrave] la carte lines are stocked with school meal
entr[eacute]es, side dishes, and beverages that are also available
in reimbursable meals, much of the cost of providing healthier
[agrave] la carte items will have been incurred before competitive
food standards take effect.
---------------------------------------------------------------------------
\72\ The proposed school meal standards rule was published in
January, 2011. See Federal Register Vol. 76, No. 9, p. 2494.
---------------------------------------------------------------------------
This does not apply, of course, to [agrave] la carte items that
are not components of a reimbursable meal or to items sold in
vending machines or through other outlets; schools may incur higher
costs to replace those items with items that meet this rule's
standards. However, even for those foods, industry and schools will
have had some time after implementation of new school meals
standards to prepare. Some of the fixed costs of product
development, contracting with new suppliers, developing recipes, and
training kitchen staff will have already been incurred by industry
and schools as they implement Federal school meal standards, easing
pressure, perhaps, on prices and the administrative costs of
complying with this competitive foods rule.
IV. Alternatives
A. Full Implementation of IOM Recommendations
We first consider a rule that adopts all of the IOM standards
without change. The standards in the proposed rule were guided in
large part by the IOM standards, but were also informed by other
considerations. Thus, for example, the proposed rule allows a
broader array of products in high schools than are included in the
IOM standards. In addition, some of the IOM standards are more
restrictive than those contained in the proposed rule, and it is
possible that fewer currently available food products meet the
standards.
The overall revenue effect on SFAs that lose competitive food
sales depends on the extent to which students replace consumption of
competitive foods with increased participation in the NSLP, an
unknown that may vary according to characteristics of the student
population (such as percent of children eligible for free or reduced
price meals) or school policy (allowing students to leave campus at
lunch time). Strong growth in NSLP participation, reported by some
schools, would fully offset the reduction in competitive food
receipts. However, lesser growth in NSLP participation allows for
the possibility of substantial overall revenue losses.
B. Less Comprehensive Standards
A second alternative considered would place fewer restrictions
on the types of competitive foods and beverages available to
students. Under this scenario, students would likely have a wider
range of options and, potentially, the choices available to students
would contain more of the foods that they are already familiar with.
This alternative increases the likelihood that there will be no net
loss in competitive food revenue.
[[Page 9563]]
Less comprehensive competitive food standards could also have
implications for children's health. The competitive food standards
are crafted specifically because of concern about children's health
and especially childhood obesity. Thus adopting less comprehensive
standards could reduce the positive impact of the proposed standards
on children's health.
C. Exemption for Reimbursable Meal Entr[eacute]es and Side Dishes
As noted previously, many of the food items sold [agrave] la
carte are entr[eacute]es or snacks that are also served as part of a
reimbursable meal. The proposed rule provides three alternative
standards for NSLP menu items sold [agrave] la carte. The first
would allow NSLP entr[eacute]es and snacks to be sold any time as an
[agrave] la carte food as long as they meet the fat and sugar
standards in the proposed rule. The other two alternatives have to
do with the menu cycle; providing NSLP entr[eacute]e and snack items
to be sold (1) on the same day they were served as part of a
reimbursable meal, or (2) within four days of being served as part
of a reimbursable meal.
The primary benefit of an exemption that is limited to foods on
the current day's menu is that those items could be offered [agrave]
la carte no more often than they could be served in reimbursable
meals without exceeding weekly NSLP or SBP restrictions on average
calories, fat, or sodium. This more limited exemption would also
encourage students to consume a greater variety of foods, even if
they choose foods consistently from the [agrave] la carte line.
However, an exemption that is limited to entr[eacute]es and side
dishes on the current day's menu could complicate meal planning and
preparation by denying schools the ability to serve leftover items
on the next school day.
The primary benefit of an exemption within four operating days
of its offering in an NSLP or SBP menu is that it would ease school
planning and increase efficiency by allowing the service of leftover
items more flexibly. However, it could discourage variety in student
consumption, and may tend to increase consumption of entrees higher
than average in calories, fat, and sodium that in the school meals
programs are balanced by other offerings during the week.
D. School-Sponsored Fundraisers
The proposed rule offers two alternatives on exempt fundraisers.
The first alternative is to allow State agencies to set the
frequency of exempt fund raisers and the second is similar; State
agencies would still set the frequency of exempt fund raisers, but
subject to USDA approval. The proposed rule complements the Federal
nutrition standards for reimbursable meals that take effect at the
start of SY 2012-2013. Together, these reforms are designed to
create the all-venue, day-long healthy school food environment
recommended by IOM.\73\ The consistency of the message on healthy
eating conveyed to students through these measures is diminished by
frequent exemptions for fundraisers. If a consistent message is more
effective in influencing eating habits than an inconsistent message,
then frequent fundraiser exemptions may reduce long-term student
adherence to a diet consistent with the Dietary Guidelines. It is
also important to note that current practice in many schools is
quite limited. More than half of all schools, and 39 percent of high
schools, never sold sweet or salty snacks as fundraisers in SY 2004-
2005.
---------------------------------------------------------------------------
\73\ For schools to ``take full advantage of their unique
position to model and reinforce healthy eating behaviors''
competitive food policies must ``consider foods and beverages
offered in all venues and throughout the school day'' (IOM 2007a,
pp. 25-26).
---------------------------------------------------------------------------
The benefits of partial or full State discretion derive from
State administrators' knowledge of what will prove most effective in
their schools. State discretion may, for example, give rise to
creative policies that encourage districts to move away from food-
based fundraisers while allowing for a short transition period that
recognizes individual districts' dependence on such revenue. Through
this type of flexibility, it is possible that State discretion would
ultimately result in fewer exempt fundraisers than would be the case
under a uniform national standard.\74\ However, the option that
would give States full discretion over exempt fundraisers entails
some small risk that one or more States or school districts (if
States use their discretion to leave the decision to local
districts) will adopt standards that impose little or no restriction
on the frequency of exempt fundraisers. A policy that does not limit
the frequency of exempt fundraisers risks undermining the goals of
Federal competitive food and reimbursable meal regulations.
---------------------------------------------------------------------------
\74\ States and local districts would be free, as well, to set
policies that allowed fewer exempt fundraisers than a uniform
national standard. However, only a policy of State discretion would
allow relatively permissive local standards for a short transition
period.
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Providing States with partial discretion over the frequency of
exempt fundraisers could also potentially result in a modest
increase in administrative costs at both the State and Federal
levels. That option will require the development of policies on the
acceptability of State standards, and procedures to administer the
application and approval process.
E. Total Sugar
The proposed rule's alternative sugar standards for competitive
foods would limit total sugar content to either 35 percent of
calories or 35 percent of weight. Both standards would place a
meaningful check on the amount of sugar allowed in competitive foods
while providing exceptions for certain fruit and vegetable snacks
and yogurt.
The calorie-based standard would be more restrictive than the
weight-based standard for sugar-sweetened foods with high moisture
content, such as ice cream and other frozen desserts.\75\ The
proposed rule's calorie-based standard would not disallow those
foods, but for some individual products, the calorie-based standard
would require that they contain less sugar than the weight-based
standard for an identically sized serving.\76\
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\75\ Flavored milk is not subject to the proposed rule's total
sugar standard.
\76\ For example, 100 grams of ready-to-eat chocolate pudding
(ID 19183 in the USDA National Nutrient Database for Standard
Reference, release 24) contains 142 calories and 17.17 grams of
total sugar. By weight, this product is 17.17 percent sugar, well
under the proposed rule's 35 percent by weight standard. But 17.17
grams of sugar have 65 calories (at 3.8 calories per gram). That is
46 percent of the 142 total calories in this product, a figure that
exceeds the proposed rule's 35 percent of calories standard (http://ndb.nal.usda.gov/).
---------------------------------------------------------------------------
For products with low moisture content the ratio of fat to sugar
is more critical. Because a gram of fat has more than twice as many
calories as a gram of sugar, snack products and desserts with a
relatively high fat content (from nuts or chocolate, for example)
may be disallowed under the proposed rule's weight-based sugar
standard while meeting its calorie-based standard.\77\
---------------------------------------------------------------------------
\77\ Certain varieties of trail mix, granola bars, and whole
grain cookies sometimes fall into this group. Two examples from the
USDA's National Nutrient Database for Standard Reference (release
24) are product IDs 25056 (chocolate coated granola bar) and 18533
(iced oatmeal cookie).
---------------------------------------------------------------------------
F. Naturally Occurring Ingredients and Fortification
Competitive foods that do not satisfy one of the proposed rule's
food group requirements may still be sold to students if they
provide at least 10 percent of the daily value of a ``naturally
occurring'' nutrient of concern: Calcium, potassium, vitamin D, or
dietary fiber. Naturally occurring nutrients are those found in non-
fortified foods. As an example, the preamble to the rule lists dry
milk solids, cheese, or rhubarb as naturally occurring sources of
calcium. Processed foods that use these naturally calcium-rich foods
as ingredients can meet the proposed rule's calcium standard.
Processed foods that are only able to reach the 10 percent daily
value for calcium through fortification with a non-food source would
not meet the standard. The primary alternative to this provision is
to allow fortification with non-food ingredients.
The Department believes that recognizing only naturally
occurring nutrient sources is more consistent with the
recommendation of the Dietary Guidelines that ``nutrients should
come primarily from foods'' (USDA-HHS 2010, p. 49). A rule that does
not credit the contribution of non-food sources to meeting the
rule's ten percent standard for DGA nutrients of concern is also
better aligned with IOM recommendations. IOM cites ``[e]merging
evidence for the health benefits of fruits, vegetables, and whole
grains'' that ``reinforces the importance of improving the overall
quality of food intake rather than nutrient-specific strategies such
as fortification and supplementation'' (IOM, 2007a, p. 41).
Despite these benefits of a food-based approach, the Department
recognizes that schools may be unable to distinguish products that
satisfy the ``naturally occurring'' requirement from products that
do not. At present, the contribution of food-based and non-food
sources to the nutrient values on processed food nutrition labels
are not shown separately. The practical effect of
[[Page 9564]]
this limitation may be that schools will approve few competitive
foods for sale on the basis of their calcium, potassium, vitamin D,
or dietary fiber content alone. In an effort to exclude items that
achieve targeted levels of these nutrients through non-food
fortification, schools may disallow any item with non-food sources
of these nutrients unless they also satisfy one of the proposed
rule's food group requirements or other exemptions. A possible
consequence is that the proposed rule will not contribute as
effectively as intended to increasing student intake of these
nutrients of concern.
It is unclear how cost might impact the mix of competitive foods
offered for sale under these alternate provisions. If fortification
with non-food sources of calcium, potassium, vitamin D, or dietary
fiber is an inexpensive way for manufacturers to gain access to the
school competitive food market, then a rule that allows non-food
fortification may increase the variety and lower the cost of
competitive food products available to students. At the same time,
inexpensive fortified snacks and beverages may crowd out whole
grains, fruits, vegetables, and dairy products.
G. Allowable Beverage Sizes in High Schools
The proposed rule would allow plain water, milk, nutritionally
equivalent milk alternatives, and 100 percent fruit or vegetable
juice to be sold to elementary, middle, and high school students
outside of the meal service area. In addition to these, the proposed
rule would allow schools to make certain calorie free and low
calorie beverages available to high school students. (``Calorie
free'' and ``low calorie'' are FDA standards.\78\) At the high
school level, the proposed rule would limit all calorie free
beverages to 20 fluid ounces and low calorie beverages to 12 fluid
ounce containers. The proposed rule places no size limit on
containers of plain water.
---------------------------------------------------------------------------
\78\ ``Calorie free'' may be used on a label for foods with
fewer than 5 calories per ``reference amount customarily consumed.''
Foods may be labeled ``low calorie'' if they contain no more than 40
calories per reference amount customarily consumed (21 CFR
101.60(b)).
---------------------------------------------------------------------------
H. Low Calorie Beverages
The proposed rule's alternative calorie limit for beverages for
high school students would permit up to either 40 calories per 8 fl
oz serving (and 60 calories per 12 fl oz) or 50 calories per 8 fl oz
serving (and 75 calories per 12 fl oz). The higher 50 calorie limit
would permit the sale of some national brand sports drinks in their
standard formulas.\79\ The lower 40 calorie limit would only allow
the sale of reduced-calorie versions of those drinks. The 50 calorie
alternative would open the door to a class of competitive beverages
with great market strength and consumer appeal. Such a change might
generate significant revenue for schools and student groups.
---------------------------------------------------------------------------
\79\ Nutrition labels on product Web sites for both Gatorade and
Powerade show 50 calories per 8 fl oz serving.
---------------------------------------------------------------------------
IOM specifically excludes sports drinks from both its Tier 1 and
Tier 2 lists of beverages. However, IOM does recognize their value
for student athletes engaged in prolonged physical activity for
``facilitating hydration, providing energy, and replacing
electrolytes'' (IOM, 2007a, p. 11). In these limited circumstances,
IOM would endorse the decision of an athletic coach to make such
drinks available.
I. Caffeinated Beverages
Consistent with IOM recommendations, the proposed rule requires
that beverages served to elementary and middle school students be
caffeine free or include only small amounts of naturally occurring
caffeine. The proposed rule, however, does not restrict caffeinated
products for high school students, which is a departure from the IOM
guidelines. The Department invites comments on providing the
exception for high school students.
V. Accounting Statement
As required by OMB Circular A-4, we have prepared an accounting
statement showing the annualized estimates of benefits, costs and
transfers associated with the provisions of this proposed rule.\80\
As discussed throughout this impact analysis, available data do not
allow us to develop point estimates of competitive food or
reimbursable meal revenue effects with any certainty. For this
reason, the only dollar figures presented in the accounting
statement are those associated with Table 3's State agency, LEA, and
school-level recordkeeping costs.
---------------------------------------------------------------------------
\80\ OMB Circular A-4 is available at www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a-4.pdf.
---------------------------------------------------------------------------
The accounting statement's cost figures are equal to the
annualized, discounted sum of the estimated cost stream from Table
3:
----------------------------------------------------------------------------------------------------------------
Fiscal year ($ millions)
-----------------------------------------------------------------------------------
2014 2015 2016 2017 2018 Total
----------------------------------------------------------------------------------------------------------------
Total projected nominal cost $23.9 $24.7 $25.5 $26.3 $27.2 $127.6
of final rule..............
----------------------------------------------------------------------------------------------------------------
Applying 7 and 3 percent discount rates to this nominal cost
stream gives present values (in 2012 dollars):
----------------------------------------------------------------------------------------------------------------
($ millions)
-----------------------------------------------------------------------------
2014 2015 2016 2017 2018 Total
----------------------------------------------------------------------------------------------------------------
Total cost (present value, 7% $20.9 $20.1 $19.5 $18.8 $18.1 $97.4
discount rate)...................
Total cost (present value, 3% 22.5 22.6 22.7 22.7 22.8 113.3
discount rate)...................
----------------------------------------------------------------------------------------------------------------
[[Page 9565]]
The annualized values in FY 2012 dollars of these discounted
cost streams are computed with the following formula, where PV is
the discounted present value of the cost stream ($97.4 in the
illustration), i is the discount rate (7 percent), and n is the
number of years beyond FY 2012 (6).\81\
---------------------------------------------------------------------------
\81\ The Excel formula for this is PMT(rate, periods,
PV, 0, 1).
[GRAPHIC] [TIFF OMITTED] TP08FE13.001
--------------------------------------------------------------------------------------------------------------------------------------------------------
Outcome
Benefits scenario Estimate Year dollar Discount rate Period covered
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/year)....... n.a. n.a. n.a. n.a. FY 2014-2017.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Qualitative: The rule will ensure that all foods sold to children in school during the school day will meet macronutrient and food group standards that
are consistent with a healthy diet and are based on current nutrition science. The proposed rule will encourage the consumption of foods such as whole
grains, fruit, vegetables, and dairy products that are low in fat and added sugar. By allowing only the sale of competitive foods that comply with
Dietary Guidelines recommendations, this proposed rule aims to promote healthy eating habits.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quantitative: SFA and State educational agency administrative expenses to comply with the rule's reporting and recordkeeping requirements.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/year)....... 1-4 $19.1 2012 7% FY 2014-2017.
$20.3 2012 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Qualitative: The changes in competitive foods offered by schools will likely result in changes in student expenditures on competitive foods (sold by
SFAs and non-SFA school groups). It will also change the extent to which students purchase and consume reimbursable school meals, resulting in changes
in amounts transferred from students to school food authorities, and from USDA to school food authorities, for reduced price and paid meals. We have
modeled a number of potential scenarios based on available data to assess impacts of competitive food standards on overall school food revenue. While
they vary widely, each scenario's estimated impact is relatively small (+0.4 percent to -0.7 percent). The data are insufficient to assess the
frequency or probability of schools experiencing any specific level of impact.
--------------------------------------------------------------------------------------------------------------------------------------------------------
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[FR Doc. 2013-02584 Filed 2-7-13; 8:45 am]
BILLING CODE 3410-30-P