Insider's Guide: Regulating Promotions
Exciting times - a head of steam is building for a new generation of regulations to restrict the marketing of junk food. Sadiq Khan announced his plans last week and Nicola Sturgeon followed this week.
As the conversation moves from why to how we offer a marketing insiders guide to promotions and how they could be effectively regulated to support low income households and encourage healthier choices.
Promotions is multi-faceted business - if we want to regulate them it is important to understand the method and motivations of different promotions to effectively regulate without harm to those on low incomes.
Promotions are used to drive one of more of the following behaviour changes:
Reach – to encourage more people to purchase the product
Frequency – to encourage more frequent consumption of the product
Volume – to increase portion size
In the case of expiring stock, it may simply be a case of shifting that stock to avoid food waste and reduce financial loss.
There are many techniques, some of which are employed by retailers, others by manufactures and in some cases collaboration between the two.
Discounts – simple price discounts are designed to increase reach, and for supermarkets they create competitive advantage and increase loyalty. People on low incomes rely heavily on discount price promotions to feed their families. Banning discount promotions on HFSS (High Fat, Sugar, Salt) products without measures to make healthy food notably cheaper will disadvantage our poorest communities. We believe that we should encourage price discounting. We recommend that it would be more effective to require supermarkets to have price discounts across a range of products which reflect the makeup of a healthy basket, so 33% would need to be for fruit and veg. This should apply to the price discounts available in any individual store and the mix of price discounts highlighted to individual shoppers in vouchers booklets, emails and other communications.
Multi-buy – such as buy-one-get-one-free or buy-one-get-one-half-price. These are typically created by the supermarkets to build loyalty and incremental expenditure, though are often co-funded by manufactures, one of the reason why we see less for unbranded fresh produce. These have an obesogenic effect because people tend to consume more if they have more, particularly with incremental items such as snacks and alcohol. However, such promotions are essential cost savers for people on low income families. Rather than banning multi-buy promotions we advocate encouraging healthy multi-buys and so recommend the same healthy basked approach as proposed for discounts.
Prizes – manufactures and OOH (Out of Home, restaurants) companies often use prize promotions. A typical example would include a unique code printed on packaging which shoppers enter by text or web for a chance to win prizes. These will drive reach but are most effective at increasing frequency of consumption driven by the shopper’s desire to win the prize. We would support banning the use of prize promotions on HFSS products. A milder alternative would be to limit the number of entries – typically these promotions limit the number of entries per day per person, and invariably at the level which would be an unhealthy level of consumption, such as 8 per day. We recommend that for prize promotions on HFSS products the numbers of entries permissible per person should be limited to encourage healthy consumption patterns.
Collector mechanics – collector mechanics encourage shoppers to collect a defined number of tokens, bottle tops, etc to qualify for a reward or to collect in the hope of completing a set to win a reward. These are typically used on-pack by manufactures and in OOH. These promotions increase reach but mainly increase frequency and volume. It is our recommendation that HFSS products and OOH should not be permitted to use collector mechanics
Collectors cards or toys with food. Manufactures, particularly of children’s food, pack collector’s cards, or sometimes toys, with the food. Children are excited to collect these cards and so increase frequency and volume. Furthermore, OOH use the incentive of free toys or other items likely to appeal to children. We recommend that collector cards, toys and other items likely to appeal to children should not be allowed with HFSS food.
Free food. In some case, particularly OOH, companies offer free food as part of a promotion. This will often be referred to as an instant win, whereby the user is given tokens or cards with their food that entitle them to further food items. These encourage greater portion size and normalise habits such as having a dessert with a meal. We recommend that HFSS food should not be offered for free in such promotions.
Promotions, in it’s many forms, can, with the right regulations, become a driver for healthy food choices by making the healthy food the cheapest and most appealing.