3
The School Environment

INTRODUCTION

The organizational structure of the schools is an important consideration in formulating recommendations for standards for competitive foods and beverages in schools. U.S. school systems are complex organizations. Internally, they are made up of many different constituencies competing for limited organizational resources. Externally, they must respond to the varied requirements and constraints imposed by federal and state agencies, as well as taxpayers and parents. Decisions governing the availability of competitive foods are interwoven in this complicated structure.

This chapter describes the way in which competitive foods are connected to the complex school environment. Although the committee’s primary task was to define nutritional standards based on health considerations and the committee was not charged with developing a detailed implementation plan, the ultimate goal of optimizing the overall school nutrition environment will be determined largely by the extent to which local, state, and federal policymakers anticipate and address a variety of implementation challenges. This chapter identifies these challenges and provides the background for related recommendations in Chapter 5. The chapter first addresses the organization of the U.S. public school system, then provides an operational description of the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). Although foods and beverages offered through these programs are not included in the committee’s definition



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3 The School Environment INTRODUCTION The organizational structure of the schools is an important consider- ation in formulating recommendations for standards for competitive foods and beverages in schools. U.S. school systems are complex organizations. Internally, they are made up of many different constituencies competing for limited organizational resources. Externally, they must respond to the varied requirements and constraints imposed by federal and state agencies, as well as taxpayers and parents. Decisions governing the availability of competitive foods are interwoven in this complicated structure. This chapter describes the way in which competitive foods are con- nected to the complex school environment. Although the committee’s primary task was to define nutritional standards based on health consider- ations and the committee was not charged with developing a detailed imple- mentation plan, the ultimate goal of optimizing the overall school nutrition environment will be determined largely by the extent to which local, state, and federal policymakers anticipate and address a variety of implementa- tion challenges. This chapter identifies these challenges and provides the background for related recommendations in Chapter 5. The chapter first addresses the organization of the U.S. public school system, then provides an operational description of the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). Although foods and beverages of- fered through these programs are not included in the committee’s definition 

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 NUTRITION STANDARDS FOR FOODS IN SCHOOLS of competitive foods, they set the food-service context within which many competitive foods and beverages are provided. ORGANIZATION OF PUBLIC SCHOOLS Federal, State, and Local Governance The federal role in education is limited to certain issues, such as laws involving civil rights and the rights of disabled and at-risk students. The relevant federal legislation includes Title I of the Elementary and Second- ary Education Act of 1965, which includes the No Child Left Behind Act of 2001; Richard Russell National School Lunch Act; Child Nutrition Act of 1966; Title IX of the Education Amendments of 1972, which includes the Individuals with Disabilities Education Act; and the Civil Rights Act of 1964. The American public school system, providing for nearly 50 million children aged 4 through 19, is primarily the responsibility of individual states; within the states, it is the shared responsibility of multiple partners. Each state’s governor can create policy through executive order; the leg- islature can create policy through the development of law; the chief state school officer makes policy; and the state board of education creates policy through a variety of mechanisms including rule making, regulation, and, in some states, self-executing powers. The chief state school officer and the state board of education, with the assistance of the state department of education, are charged with the task of seeing that all laws and regulations are carried out by the local boards of education. The chief state school officer may be appointed by the governor or the state board of education, or he or she may be elected by partisan or non- partisan statewide ballot. Membership on the state board of education may also be either by appointment or by election. In 32 states, the state school board members are appointed by the governor; 10 have elected boards and 8 have other arrangements. Each state is composed of school districts governed by a local school board. Local school board members are usually elected, although in some states they are appointed. Local school board members make up the largest group of elected officials in the United States, totaling about 95,000 mem- bers. These officials bear the responsibility for translating state and federal laws and regulations into workable school district policies, and they have the authority to develop operations of their local schools, as long as those policies are consistent with state and federal laws and regulations. Professional organizations such as the National Governors Association, the National Conference of State Legislatures, the Council of Chief State

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 THE SCHOOL ENVIRONMENT School Officers, the National Association of State Boards of Education, and the National School Boards Association represent their members in policy-setting contexts and offer services and training that help members strengthen state and local leadership in educational policy making. Mem- bership in these organizations also provides school board members access to information concerning new and established federal and state laws. Educational Funding Sources Federal funding, determined by Congress during the budget process, accounts for about 7 to 10 percent of most local education budgets. Ad- ditional funding mechanisms for the balance are determined by the state legislatures. In some states, the major source of funding is the state govern- ment, while in others it is the local school districts. Property taxes are a major source of funding for education, along with sales taxes, utility taxes, lottery revenue, statewide and local levies, and state general fund revenue. Each state has its own method of determining how monies are levied and collected, and local boards of education generally have the authority to pass local taxes to support the local schools. Local funding also enables school districts to go beyond the minimum requirements of state and federal laws that govern their schools. Revenue also accrues to many schools from the sale of federally re- imbursable meals under the NSLP and SBP, and some states allocate state money to support various school meal programs. In addition, most school districts receive revenue from the sale of competititive foods and bever- ages. Data presented later in this chapter suggest that overall revenues from competitive foods and beverages are small in relation to total school budgets—less than 1 percent for most schools. However, these monies of- ten play an important role in school operations because they constitute a significant proportion of funds available for certain activities. Administration of School Nutrition Programs The NSLP and SBP are usually administered by the state departments of education, though sometimes state departments of agriculture assume this role. Federal regulations require that participating districts designate a School Food Authority (SFA) to operate the program. The SFA can be determined at the local school level, but this occurs more often at the school-district level. Districts enter into annual agreements with relevant state departments of education to participate in the federally reimbursable school meals pro- grams. In implementing these programs, districts are required to follow

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 NUTRITION STANDARDS FOR FOODS IN SCHOOLS established procedures involving reporting on meals served and claiming reimbursements. The state department of education is responsible for train- ing, technical assistance, and monitoring for these programs. Local school boards set broad food service policy to be executed by school staff. SFAs plan menus, purchase food, oversee meal preparation and service, and keep records that document claims for reimbursement. SFAs work with principals in setting meal schedules and making other ar- rangements for meals. Nevertheless, the food service programs are typically administered on a district-wide basis rather than at the school level. Al- though some states and some school districts pay part of the meal program’s costs from nonfood revenue, many SFAs are expected to cover costs from revenues generated. However, for all SFAs, any revenue in excess of costs must be reinvested in the meal programs; under federal regulations, schools cannot make a profit from their federally reimbursable school nutrition programs. NATIONAL SCHOOL LUNCH AND SCHOOL BREAKFAST PROGRAMS Created in 1946, the NSLP provides meals in most public schools throughout the country as well as in a substantial number of private schools, and currently provides lunch to about 29 million children daily. Participat- ing children from low-income families receive meals either free or at a re- duced price, with the federal government providing subsidies to the schools for meals. Children from families that do not meet the income criteria for these free or reduced-price meals are referred to as full-price participants; however, schools also receive a small subsidy for those meals. To participate in the program, schools are required to comply with regulations designed to ensure that meals served under the programs are healthful and nutritious. However, there is considerable flexibility permitted for meeting these requirements. A parallel but formally separate program, the SBP provides breakfast to children at school. Although considerably smaller in participation level than the NSLP, the breakfast program is substantial, serving about 9 million breakfasts on a typical day. Although the program is available to all chil- dren, more than 80 percent of participants are from low-income families. After-school snacks can be provided by schools through the NSLP or the Child and Adult Care Food Program. Although foods and beverages sold as part of the NSLP and SBP are not among the competitive foods and beverages that are the focus of this report, they inform the definition of competitive foods. Furthermore, these two programs provide the school food service context that establishes how

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 THE SCHOOL ENVIRONMENT competitive foods and beverages are provided. Understanding how the fed- erally reimbursable meal programs work is therefore of great importance to the committee’s task. Regulation of School Meal Programs The NSLP and SBP are authorized under federal legislation, and related federal regulations are determined by the U.S. Department of Agriculture (USDA), Food and Nutrition Service. State agencies, usually the state de- partment of education, develop state regulations based on federal law and regulations, as well as relevant state legislation regarding the operations of the program, and monitor compliance at the school level. These state agencies serve as intermediaries in the fiscal reimbursement process, con- solidating reimbursement requests from within the state and transmitting them to USDA. Day-to-day operations of the programs, including certifying students’ eligibility for subsidies, preparing food, and conducting food service op- erations, is the responsibility of the SFA, which is usually coincident with school districts. In some instances, a group of school districts may combine to form a single SFA. Some SFAs contract with outside vendors for food preparation or other aspects of operations. Federal Reimbursement for School Meal Programs Federal reimbursement to the SFA is set on a per-meal basis, with the level of the subsidies determined largely by federal legislation. Federal law requires that students whose families have incomes below certain levels are not charged for meals. The legislation also sets the maximum price allow- able for reduced-price meals (currently 40 cents for lunch and 30 cents for breakfast). Schools with high rates of participation by low-income students receive slightly higher reimbursement rates. SFAs are allowed to set the price of the full-price meals they sell. They also determine which qualifying foods are served, subject to detailed regulations designed to ensure that the meals are nutritious and healthful. There is no federal requirement that SFA must be cost/revenue neutral on their food service operations. However, many school districts expect food service operations to cover their costs without district subsidies. Many SFAs report that they find themselves squeezed by these local financial ex- pectations on the one hand and the federal regulations on the other. In some instances, SFAs use competitive food and beverage sales, which are subject to fewer regulations and allow more flexibility in SFA decision making, to meet the financial expectations of their districts.

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 NUTRITION STANDARDS FOR FOODS IN SCHOOLS Nutrition Requirements for School Meal Programs From its inception, the NSLP emphasized the importance of provid- ing nutritious meals. Until the 1990s, this was done by specifying “meal pattern,” which required that the meals served included certain generic components, such as milk; a protein source; breads, grains, and cereals; and fruits or vegetables. Detailed regulations and guidelines defined exactly what foods and beverages and what serving sizes met these specifications. In the early 1990s, the first School Nutrition Dietary Assessment (SNDA-I) (Burghardt et al., 1993) found evidence that, although school meals were generally meeting or exceeding various nutrient requirements, they substantially exceeded the Dietary Guidelines for Americans (DGA) recommended limits for total and saturated fat. These observations, to- gether with other factors, led to a series of legislative actions that changed the nutrition requirements of the program. New regulations specified that fat content conform to federal recommendations. They also encouraged greater attention to sodium, cholesterol, and fiber content, and changed methods for monitoring school meals. The revised system that emerged allows three ways of satisfying nutri- tion requirements: 1. Schools develop menus using a computer-assisted, nutrient-based system; 2. Alternatively, schools continue to use a food-based system, which is essentially the same as the previous meal pattern requirements; or 3. Schools use an enhanced food-based pattern that includes addi- tional requirements for grains and vegetables. The regulations also allow SFAs to provide other alternatives for meeting requirements. COMPETITIVE FOODS AND BEVERAGES Definition and Overview The term “competitive foods” is used in this report to include all foods and beverages that are sold, served, or given to students in the school envi- ronment other than meals served through the NSLP, SBP, and After-School Snack and Meal Programs. Competitive foods may be available in à la carte lines, snack bars, student stores, vending machines, or school activities, such as fund-raisers, achievement rewards, classroom parties or snacks, school celebrations, and school meetings. They do not include brown bag lunches. The nutritional value of competitive foods and beverages is largely

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 THE SCHOOL ENVIRONMENT unregulated by the federal government. Furthermore, availability is usu- ally not overseen by the school food service staff. As a result, competitive foods and beverages reflect a broad range of energy and nutrient content. Some competitive foods and beverages consist of healthful items, such as fruits and vegetables. However, many are snack foods and beverages that are calorie dense, nutrient poor, and contain high levels of fat, sugar, and sodium. Federal regulation has labeled a subcategory of competitive foods and beverages as Foods of Minimal Nutritional Value (FMNV). USDA defines FMNV as those that provide very low amounts per portion for each of eight specified nutrients: protein, vitamins A and C, niacin, riboflavin, thiamin, calcium, and iron. Included in this category are carbonated soft drinks, chewing gum, water ices, and certain candies made predominantly from sweeteners. Schools participating in the NSLP are prohibited from selling FMNV during meal periods in school cafeterias and other food service areas (GAO, 2005). Schools are also prohibited from designing food service areas in such ways that encourage or facilitate the choice or purchase of FMNV as a ready substitute for, or addition to, federally reimbursable meals. The federal regulations dealing with FMNV set a minimum standard. This does not preclude local schools from setting stricter rules. For example, some states prohibit the sale of FMNV on campus until 30 minutes after the last lunch period (see Chapter 4 discussion of state and local policies). The widespread availability of competitive foods and beverages is well documented (Wechsler et al., 2001). They are often sold in the school caf- eteria, and they may be offered elsewhere in school buildings, on school grounds, or at school-sponsored events. According to the Government Accountability Office (GAO) report School Meal Programs (GAO, 2005), nearly 90 percent of schools offer competitive foods and beverages. Their prevalence means that most students at all age levels have many food choices in the school environment in addition to the federally reimbursable school nutrition programs or the brown bag lunch (Box 3-1). The array of possibilities was illustrated graphically in a recent GAO report, reproduced here as Figure 3-1. Table 3-1 shows the percentage of schools where students can purchase specific types of foods and beverages through à la carte sales in the caf- eteria or in vending machines, school stores, canteens, or snack bars. For columns 3 and 4 of the table, the original source, Wechsler et al. (2001), reported percentage of schools (data from the Centers for Disease Control and Prevention [CDC]/School Health Policies and Programs Study [SHPPS]) using as a base the number of schools that had a vending machine, school store, canteen, or snack bar. The base of the percentage was converted to represent all schools by multiplying the percentage reported in the original article by the percentage of schools having at least one of these sales venues.

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0 NUTRITION STANDARDS FOR FOODS IN SCHOOLS BOX 3-1 Competitive Foods Are Widely Available National data on the extent to which competitive foods are offered in schools are available from the 2005 Government Accountability Office (GAO) report (and oth- ers). The GAO study found that • 91 percent of high schools, 88 percent of middle schools, and 67 percent of elementary schools offered foods à la carte; • 91 percent of high schools, 87 percent of middle schools, and 46 percent of elementary schools had food or beverage vending machines that students were allowed to use; • 54 percent of high schools, 25 percent of middle schools, and 15 percent of elementary schools sold food through a school store or snack bar; and • Some schools allowed foods to be sold for fund-raising purposes during school meal periods. For example, fund-raising—e.g., seasonal candy sales or bake sales that raise revenues for school organizations—through the sale of foods to students during the school day as allowed in more than 4 out of 10 schools in 2003–2004. These types of fundraisers were permitted in two-thirds of high schools and less than 40 percent of middle and elementary schools. SOURCE: GAO, 2005. For example, the source table in the article indicated that 28.8 percent of elementary schools sold 1-percent milk in a vending machine, school store, canteen, or snack bar. However, only 43 percent of elementary schools were reported to have one or more of these sales venues. Therefore, for all schools, the percentage of elementary schools selling 1-percent milk in at least one of these venues is 43 times 0.288, or 12.4 percent, the percentage reported at the top of column 3 of Table 3-1. The subsequent discussion provides details about competitive food and beverage sales venues and the kinds of foods often available outside the federally reimbursable school nutrition programs. Often, the same types of foods are sold or served to students in different locations, although safety and health factors such as refrigeration and freshness place limitations on distribution. Most high schools offer competitive foods and beverages in one or more of the categories listed in this section. Access to competitive foods and beverages is more limited in elementary schools, but is still very common.

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 THE SCHOOL ENVIRONMENT School lunch line Cafeteria Gym A la cartea Vending machines ? Vending machinesb Fund-raiserd School storec Vending machines High school at FIGURE 3-1 Groups most frequently involved in various competitive food venues commonly available in high schools. aÀ la carte: school food authority. machines: school food authority, vending3-1 fig operator, school official or administrator, bVending physical education department, student association or club. cSchool store: school official or administrator, student association or club. dFund-raisers: physical education department, music or art department, business teacher, student association or club, booster groups. SOURCE: GAO, 2005.

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 NUTRITION STANDARDS FOR FOODS IN SCHOOLS TABLE 3-1 Percentage of Schools Offering Various Types of Competitive Foods by Venue Schools Where Students Can Purchase Food or Beverage in Vending Schools Offering Machines or in a School Food or Beverage Store, Canteen, or À La Carte Snack Bar Percentage Percentage Percentage Percentage of of Senior of of Senior Elementary High Elementary High Schoolsa Schoolsb Type of Food or Beverage Schools Schools Often Low in Fat n/ac 1% or skim milk n/a 12.4 22.7 100% fruit or vegetable juice 57.8 77.4 21.2 63.8 Bottled water n/a n/a 13.1 64.7 Bread sticks, rolls, bagels, pita bread, 40.9 73.8 6.3 29.1 or other bread products Fruits or vegetables 68.1 90.4 8.6 21.6 Sandwichesc n/a n/a n/a n/a Entrées from NSLP mealc n/a n/a n/a n/a Low-fat cookies, crackers, cakes, 36.1 48.0 11.4 48.7 pastries, or other low-fat baked goods Low-fat or fat-free ice cream, frozen 27.0 49.0 9.8 24.1 yogurt, or sherbet Low-fat or nonfat yogurt 31.0 47.9 5.7 20.5 Salty snacks that are low in fat 29.5 58.3 19.1 63.8 Often High in Fat, Sodium, or Added Sugars 2% or whole milk n/a n/a 21.3 43.7 Chocolate candy 2.4 23.7 12.6 70.9 Cookies, crackers, cakes, pastries, 48.8 79.9 22.6 79.2 or other baked goods that are not low in fat Ice cream or frozen yogurt that is 26.3 54.5 13.4 41.7 not low in fat Other kinds of candy (non-chocolate) 4.2 22.2 15.3 73.7 Salty snacks that are not low in fat 25.8 57.8 21.9 81.5 Soft drinks, sports drinks, or fruit 19.0 57.2 25.0 91.9 drinks that are not 100% juice aAmong the 43.0 percent of elementary schools with a vending machine, school store, can- teen or snack bar. bAmong the 98.2 percent of senior high schools with a vending machine, school store, canteen or snack bar. cNot included in survey; data not available. SOURCE: Derived from Wechsler et al. (2001) with additional information from GAO (2005). Most entries are based on SHPPS (2000) data.

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 THE SCHOOL ENVIRONMENT À La Carte Sales The majority of competitive foods and beverages available during the school day are offered in school cafeterias through à la carte sales. In some cases, à la carte selections are foods and beverages that are also part of a school’s regular reimbursable meal offerings. À la carte selections may also include foods and beverages sold separately that are not sold as part of the federally-funded school meals. As shown in Table 3-1, à la carte sales include a broad range of foods and beverages from fruits, vegetables, and bread products to cookies and salty snacks. It is important to note that the “n/a” symbol in the table means that the relevant food was not asked about in the survey, not that it was not frequently available. Indeed, other information (GAO, 2005) indi- cates that items not asked about in the survey represented in this table are commonly available à la carte, including milk, bottled water, sandwiches, pizza, and entrées from the main NSLP meals. Competitive foods, including à la carte offerings, are part of the food service program in a majority of U.S. schools (GAO, 2004). However, some states do not allow à la carte sales as part of the school meal programs, and some limit what can be served. For example, Title 126 of the West Virginia Board of Education Policy 4321.1, requires that only meal components can be sold as à la carte items at breakfast, and only fluid milk, milk shakes, and bottled water can be sold à la carte at lunch (WVDE, 2004). Vending Machines Vending machines are common in secondary schools and many el- ementary schools also allow them on school property (French et al., 2003; Nestle, 2000). CDC (Wechsler et al., 2001) showed that 43 percent of elementary schools, 74 percent of middle schools, and 98 percent of high schools have either a vending machine, a school store, or a snack bar where students can purchase foods and beverages. The range of food and beverage choices found in vending machines is much narrower than that of the à la carte line (French et al., 2003). This may be due, in part, to the need for refrigeration of fresh food and bever- age products. In a GAO report to Congress, the most common types of food and beverage offered in school vending machines were identified as water, fruit and vegetable juices, sports drinks, salty snacks, and soft drinks (GAO, 2005). The most common types of competitive foods offered in high schools through any venue were identified as fruit and vegetable juices, sports drinks, salty snacks, baked goods, sandwiches, pizza, frozen desserts, candy, and soft drinks (GAO, 2005). In assessing the prevalence of vending machines in schools, it is im-

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 NUTRITION STANDARDS FOR FOODS IN SCHOOLS discretion over how state and federal funds are used. Typically, budget allocations from various funding sources are designated for specific areas such as salaries of instructional staff, textbooks, instructional and library supplies, computers, technology supplies, printing supplies, equipment, furniture, and capital improvements. Competitive food and beverage revenues may be one of the few sources of discretionary funds for a school administrator. These monies may pro- vide funding for a variety of extracurricular activities such as field trips, art programs, theater, band and orchestra, additional computers and technol- ogy equipment, and educational competitions. Although these are items and/or activities that fall outside instructional budget allocations, they can be important in the operation of a successful school. The revenues generated by sales of competitive foods and beverages are relatively small. Evidence presented below suggests that they probably amount to less than 1 percent of expenditures in most schools. However, as a percentage of the revenues spent on these and similar discretionary activities, the competitive food and beverage revenues may be significant. Below are estimates of the overall size of these revenues. Revenues Generated by Sales of Competitive Foods and Beverages The most recent nationally representative source of information of competitive food and beverage finances is a 2005 GAO study. Based on survey reports from a sample of schools in 2003–2004, this report esti- mated the percentages of schools in various ranges of competitive food and beverage revenues.3 Assumptions about the average revenues of the schools within each range show the average annual competitive food revenues were $8,500 per school for elementary schools, $39,500 for middle schools, and $80,000 for high schools (see Table 3-2). Extrapolating, based on numbers of schools nationwide, suggests approximately $2.3 billion worth of com- petitive foods and beverages are sold annually. Several different perspectives can be used to assess this $2.3 billion figure. As a fraction of total school 3 It appears that for à la carte sales, the GAO numbers reflect gross reenue from beverage and food sales, but they may reflect something closer to net reenue for vending and some other competitive food venues. In defining revenue, the GAO report indicates on p. 27, “Throughout this report, revenue for each type of competitive food venue includes all revenue generated through competitive food sales. We did not ask survey respondents for information on profits retained after covering expenses.” However, some ambiguity remains as to what “generated” means. It appears that it means revenue accruing to the schools. For à la carte sales, this would be the total alue of the food and beverage sales, whereas for another major revenue source, vending, the school only receives the payments made to the school by the vendor, which do not include the total value of the food and beverage items sold because they do not include the vendor’s costs and profits.

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 THE SCHOOL ENVIRONMENT TABLE 3-2 Competitive Foods and Beverages Revenue in Schools Elementary Middle High All Percentage of schools with more than 0% 11% 32% $100,000 revenue from competitive foods and beverages Percentage of schools with less than 52% 21% 9% $1,000 revenue from competitive foods and beverages Average annual competitive foods $8,500 $39,500 $80,000 and beverages revenue per schoola Approximate number of schoolsb 52,000 16,000 15,000 Estimated total competitive food $2.3 billion revenues across all schoolsc Reference figure: Total expenditures $384 billion of all schoolsd aComputed assuming that averages were approximated by midpoints of ranges in GAO, 2005, p. 28. bBased on GAO (2005), p. 54. cExtrapolated based on numbers of schools and the average annual competitive foods and beverages revenue per school. dTotal expenditures in all U.S. schools for all purposes; based on multiplying an estimate of per pupil annual cost of $8,000, times approximately 48 million pupils. expenditures, it is quite low—less than 1 percent. However, as a share of the overall money spent on food service in the schools, it is much more substantial. Federal school meal program costs for 2004 are estimated to have been about $9.4 billion (Source: www.fns.usda.gov/pd/cncosts.htm [accessed February 27, 2007]). With the estimated $2.3 billion of competi- tive foods, this implies a total revenue related to food service of $11.7 bil- lion. Competitive food and beverage sales represents about 19 percent of this figure. To place this number in perspective, the total expenditures on public schools was approximately $384 billion. A third perspective that may be more meaningful than either of the above is that discussed in GAO (2005). Competitive food monies may be a very important source of revenue for schools because they fund a significant share of discretionary activities that cannot be funded out of regular school activities (see additional discussion below). In most schools, the majority of competitive food monies is likely to come from à la carte sales in the cafeteria. Data for high schools suggest that à la carte sales make up well over 50 percent of total revenues related to competitive foods and beverages. Similar conclusions can be drawn from

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 NUTRITION STANDARDS FOR FOODS IN SCHOOLS the American School Food Service Association’s (ASFSA) À la Carte and Vending Research Program, Summary Report (ASFSA, 2002). Comparisons between the revenue for à la carte and for vending may be somewhat misleading (see footnote 3). How the Money Is Used In assessing how competitive food and beverage funds are used by schools, it is important to distinguish between à la carte sales and revenues and sales from other competitive food and beverage venues. À la carte revenues usually (but not always) accrue to the district SFA, which uses the money to offset deficits in the food service operations or to improve the quality of foods and beverages sold. On the other hand, although revenues from vending and other competitive food and beverage sales venues sometimes accrue to the SFA, they are more likely to accrue to special accounts controlled by school officials for use in supporting various school activities directly to student organizations.4 Use of Competitie Foods Money by School Food Serice Authority In the GAO (2003) survey of 22 schools in 13 school districts, SFA indicated that financial pressures have led them to offer more and “less healthful” à la carte items because these items generate needed revenue. “One School Food Service director said that à la carte sales help her bal- ance the budget. She said the SFA probably sells about $600 a day in à la carte items.” Similar information was reported in a 2002 School Nutrition Associa- tion (then ASFSA) study on school à la carte and vending sales (ASFSA, 2002). SFA stated that à la carte sales had a number of positive impacts. In particular, study participants reported that the revenue from sales of competitive foods allowed • more price flexibility and higher pricing margins; • greater overall revenue; • opportunities for offering items such as branded foods, which respond to student preferences, but cannot be offered under the standard reimbursable meal; and • opportunities to be more responsive to student requests in menu offerings. 4 For additional information on the split of monies across different sources, see ASFSA (2002, pp. 27 and 47).

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 THE SCHOOL ENVIRONMENT Use of Competitie Foods Money by Other Constituencies in the School As indicated earlier, schools often find it necessary to identify ways of funding programs and activities that fall outside those areas that receive funding through the instructional supplies and materials budgets. GAO (2005) (see Figure 3-2) reported that schools use money from the sale of competitive foods and beverages in diverse ways, including funding field trips, school assemblies, athletic facilities and equipment, textbooks, and other supplies. Similar information was reported in the 2005 USDA and CDC Making It Happen! toolkit (USDA/CDC, 2005). 36 Student field trips 34 School assemblies and related programs 23 Athletic equipment, facilities, or uniforms 20 General school overhead 17 Textbooks and school supplies Library supplies 14 Arts programs excluding band or chorus 13 Revenue Uses Band or choral equipment or uniforms 13 Computers and information 12 technology equipment 11 Staff development Playground equipment 9 8 Scholarships Transportation 7 5 Nutrition education Construction of new facilities, except athletic 2 Staff salaries and/or benefits 0 0 10 20 30 40 Percentage of Schools FIGURE 3-2 Estimated percentage of schools using competitive foods revenue, excluding food service revenue, for various purposes in 2003–2004. SOURCE: GAO, 2005. 3-2 fixed image New type

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 NUTRITION STANDARDS FOR FOODS IN SCHOOLS Thus à la carte revenues, which are likely the majority of competitive food revenues (see discussion above), are mainly devoted to food service operations. Essentially, they are used to pay off salaries of food service workers and to obtain food and other supplies. As indicated in ASFSA (2002), more than 90 percent of à la carte revenues are used for food service operation costs. Experience of Schools in Restricting Competitive Foods and Beverages The committee examined the financial experiences of schools that have restricted the availability of competitive foods and beverages to their stu- dents. Relatively little information was available because schools have only recently begun to make this transition and share their experiences (see below). Eidence from the California LEAF Study Probably the most thorough research is a pilot study of the effects of competitive food and beverage restriction implementation in California (Woodward-Lopez et al., 2005). Sixteen schools in nine districts were stud- ied, and financial data were obtained from school district personnel. The study was conducted by the Center for Weight and Health at the University of California at Berkeley. The investigators found that, when competitive food and beverage restrictions were imposed, gross revenue from school meals went up for 13 of 16 schools after the pilot changes. This increase in gross revenue oc- curred largely because more students participated in the NSLP, instead of buying competitive foods. However, gross revenue by itself is an imperfect measure of impact on the schools because it fails to account for possible changes in costs that might offset the revenue. The investigators found that only 5 of the 16 schools could provide sufficient data with which to estimate changes in net income. Net income decreased in two of those five schools and increased in three. For at least one and possibly two of the three schools where net income was increased, other factors, not directly related to restricting competitive foods also seemed to have been at least partially responsible. Although this study was limited to only 16 schools in a single state, it suggests at least two important conjectures. First, it is unclear that schools can implement changes in competitive foods and beverages without losses in net income. Second, it appears that the routine availability of account- ing information in schools is limited, and thus it is difficult to fully assess changes in net income. Research that follows on this pilot study may clarify the impact of changes in competitive food sales on school net income.

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 THE SCHOOL ENVIRONMENT 00 GAO Report GAO (2005) noted concerns about the availability of information to assess the financial impact of competitive food and beverage restrictions. GAO staff visited six schools that had recently undertaken initiatives to improve the quality of competitive foods and beverages, and examined financial impacts. However, they reported, “The effects of changes to com- petitive foods on revenues were often unclear because of limited data; nonetheless, many officials expressed concern about revenue losses.” Eidence from Trade Sources The number of school vending machines is reported to have decreased for schools (elementary through college) between 2003 and 2004. Vending operators cited two primary reasons for retreating from schools: (1) resis- tance from SFA that view vending operations as competition rather than support, and (2) growing nutrition restrictions (Maras, 2004). School Reports Additional discussions of the financial effects of implementing new competitive foods policies are also available in Making It Happen!, a com- pendium of 32 school and school district “success stories” published by the government to provide information on how to improve nutrition in the schools. Seventeen of the school district reports mention financial variables, and twelve indicate that limiting competitive foods and beverages did not adversely affect school revenues or resulted in benefit; four reported no change (USDA/CDC, 2005). School reports are of limited use because the information reflects school and parent self-reports rather than independent outside observations and a standardized research protocol. Also, these school reports were not ran- domly selected; they were chosen to highlight schools that were changing their competitive foods program. Overall, this compendium suggests that it has been possible to restrict competitive foods and beverages without the school reporting additional financial pressure. However, assessing feasibil- ity across schools will be difficult. Careful consideration must be given to how data are represented. When schools report success or failure, the data reported may not be representative of financial impacts across all schools. The importance of small revenue sources may be underestimated be- cause school officials often have more discretion over income from competi- tive foods than over other funding streams. There is insufficient evidence available to determine the financial impact of restricting competitive foods and beverages.

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 NUTRITION STANDARDS FOR FOODS IN SCHOOLS MARKETING Marketing activities represent another element of the nutrition-related environment in schools. Marketing includes both the selling of specific brands of food and beverages, and the prominent use of food and bever- age company names and logos in schools. Although there is a paucity of rigorous scientific evidence on the impact of marketing on food selection and purchase by children in schools, it is possible that marketing reflects, in part, the considerable resources many students have to spend. Food and beverage companies are also eager to shape students’ brand awareness and loyalty, and thus purchasing patterns, as they mature into adulthood (GAO, 2000; IOM, 2006; Palmer et al., 2004; Story and French, 2004). For example, more than $200 billion is spent annually by children and adolescents. Candy, carbonated soft drinks, and salty snacks consistently represent the leading categories of food and beverage items that are pur- chased by this group (IOM, 2006). In addition, a rigorous review of peer- reviewed literature on the effect of food marketing, primarily advertising, found that among many factors, food and beverage marketing influences the preferences and purchase requests of children, influences consumption at least in the short term, is a likely contributor to less healthful diets, and may contribute to negative diet-related health outcomes and risks among children and youth (IOM, 2006). Indeed, in many ways the schools repre- sent an ideal audience for marketing, with millions of students attending school at least six hours a day, five days a week. Schools are often also eager to be involved in marketing efforts to help alleviate chronically tight budgets (Palmer et al., 2004; Story and French, 2004). The report Food Marketing to Children and Youth: Threat or Oppor- tunity? (IOM, 2006) indicates that “[t]he competitive multifaceted market- ing of high-calorie and low-nutrient food and beverage products in school settings is widely prevalent and appears to have increased steadily over the past decade.” Encouraging soft drink sales is the most common kind of marketing activity in schools. In addition, 20 percent of high schools sell branded fast foods (Wechsler et al., 2001). A particularly prevalent form of advertising at school is on scoreboards, in the form of corporate logos and soft drink ads (GAO, 2000). Also, more than one-third of middle and high schools use Channel One, which provides news programs for classroom viewing that include commercials for soft drinks and snacks. Food and beverage marketing in the school environment can appear in many forms. For example, Story and French (2004) identified • sales of foods and beverages that benefit the school, the school district, or a student activity;

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 THE SCHOOL ENVIRONMENT • sales of brand-name fast foods; • awards to schools of cash or equipment in exchange for proofs of purchase of foods or beverages; • coupons, labels, or receipts from students; • fund-raising activities by parents and students that involve the sale of foods and beverages; • food and beverage advertising in schools, on athletic fields, on buses, and on school equipment and books; • food and beverage advertising in school publications, on television programs shown at school, and on computers; • free food and beverage samples; • educational materials, contests, and grants provided by food and beverage corporations; and • market research conducted by food and beverage firms at school, concerning student food and beverage preferences. Many observers have raised concerns about the extent of food and beverage marketing in schools and the susceptibility of students to its influ- ence. Despite this, local, state, or national regulation or voluntary controls on this kind of marketing in schools are not widespread (IOM, 2006). Be- cause the selling of various products in school is itself a form of marketing, the growing restrictions on competitive foods and beverages in schools, as documented in Chapter 4, may be resulting in less marketing overall. OTHER ASPECTS OF THE SCHOOL ENVIRONMENT RELATED TO THE NSLP AND COMPETITIVE FOODS AND BEVERAGES Schools vary substantially in many different ways, including physical layout, class and activity scheduling, the availability of various programs, and levels of overall maintenance. Many of these factors have an influence on how the use of competitive foods and beverages has evolved in the schools and on the difficulty of creating standards for such foods and bever- ages. Noted below are the most important of these interactions. Lack of Space Some schools lack the physical capacity to serve all of their students in the available cafeteria space during times generally regarded as appropriate for lunch. As a result, schools have sometimes resorted to beginning the lunch period much earlier than most students might want. This potentially diminishes the attractiveness of participating in the NSLP (and thereby increases the relative appeal of competitive foods and beverages when stu- dents are hungry). Other consequences of having inadequate cafeteria space

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00 NUTRITION STANDARDS FOR FOODS IN SCHOOLS may include overcrowded conditions or the need for students to use other food sources, such as school stores or vending machines, to obtain food, thus increasing the relative attractiveness of competitive foods. Scheduling Closely related to issues concerning cafeteria space are broader con- straints that schools face for scheduling. Under pressure to ensure high academic performance (or to provide time for other school priorities), some schools schedule relatively short lunch periods. This may lead some students to choose competitive foods and beverages rather than NSLP meals if these can be purchased more quickly. A related timing issue involves whether schedules are such that students choose between buying and consuming an NSLP meal or having more recess time. Also, for high school students, there may be choices between having time for lunch and having time for an extra class or other academic opportunity. Open Versus Closed Campuses Some schools, particularly high schools, choose to “open” their cam- puses to allow students to be away from school during lunch periods and, in some instances, during other times when the students do not have classes scheduled. Nationally, 94 percent of elementary, 89 percent of middle, and 73 percent of high schools have closed campuses (Wechsler et al., 2001). Some schools have an open campus because of space constraints such as those noted above; in other instances, the school district may have made a conscious decision to allow older students to come and go from campus based on the assumption that they have a higher level of responsibility. The open campus environment affects the dynamic of the interaction between the NSLP and competitive foods and beverages. In large part this is true because being able to leave the campus at lunchtime opens up ad- ditional lunch alternatives, thus reducing student use of both the NSLP and school competitive foods and beverages. Having an open campus likely undermines the nutrition objectives of the NSLP, because the foods and beverages bought by students off campus are probably not as nutritious as those served within the NSLP. Availability of “Grab and Go” Programs Within the NSLP To compensate for facility constraints and other issues, some schools have developed “express” versions of the NSLP that provide students with meals more quickly. Similar efforts to serve meals more quickly include “grab and go” breakfasts and breakfasts in the classroom. These alterna-

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0 THE SCHOOL ENVIRONMENT tives allow students the opportunity to select options that are more nutri- tious and decrease opportunities to select competitive foods and beverages of low nutritional value. Conditions Within the School Cafeteria Students use of competitive foods and beverages may also be influenced by school cafeteria conditions. Besides overcrowding, key issues include cleanliness, noise levels, and the enforcement of rules that ensure a pleas- ant, safe eating environment without being overly restrictive. A related issue is the availability of alternative places to eat within the school or on the school grounds, and whether students are allowed to consume NSLP meals and/or foods and beverages at non-cafeteria locations. In summary: 1. Most schools have the infrastructure or arrangements in place to produce and serve healthy foods, either through their own kitchens, central district kitchens, or outside vendors. Although compliance is not yet 100 percent, evidence shows that greater numbers of schools are meeting the nutritional standards for the NSLP and SBP in meals served. 2. The successful operation of the NSLP and SBP in most schools, with their extensive nutritional requirements, suggests that schools have the capability to shift from current competitive foods and beverages to more nutritious competitive foods and beverages. 3. At a time when there are significant pressures on SFA budgets, competitive foods and beverages may be important for many SFAs to meet requirements that they balance their budgets. This may be an obstacle to modifying school competitive food and beverage policies in some schools. SUMMARY The preceding discussion of ways in which the school environment influences competitive food and beverage use is not exhaustive. However, it highlights the most important interactions, including the fact that differ- ent school conditions lead to quite different patterns of competitive food and beverage use. It also suggests that the effects of regulating competitive foods and beverages may also “play out” differently depending on the circumstances.

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