“As these changes come through with the requirements for fat and sodium and those types of things, that requires reformulation and that requires investment. Not always, but typically, selling into the schools is not the highest margin sale for the manufacturers,” Johnson says. “The more reformulations and changes and changes, the more costs.”
Big companies with sales to grocery stores, convenience stores and other retail markers can better absorb the added costs, but there are limits.
“I’m selling a quarter of this product to the schools and I’m already putting it into special packaging and now I have to go back to the bench and redesign the product,” she says. “Now I got a pizza that is not performing and it doesn’t taste good. You’re a couple of years down the road before you can execute the product.”
Johnson says that, ultimately, a company with a school food service business is “interested in maintaining sales at the highest margin that they can so they can remain profitable in their business ventures.”
Several large food companies include the nutrition rules as an area of concern on lobbying reports, although they list several others issues as well, such as taxes, labeling of genetically modified foods and ingredients, or the 2010 health care law.
For school cafeteria managers, though, the issue seems to top the list of concerns. They run their operations on thin margins where the smallest drop in student participation means cutting back or operating in the red.
The School Nutrition Association, which represents cafeteria operators and their suppliers, says the additional 6 cents per meal in federal subsidies for meeting the new rules is not enough. Becky Domokos-Bays — a top officer with the School Nutrition Association and school meal director for Alexandria, Va. — says her organization has requested 35 cents per meal in additional reimbursement in the past. But this year, Domokos-Bays says congressional contacts suggested that the association not bother seeking additional money.
Instead, the association has embraced the waiver provision that House Agriculture Appropriations Subcommittee Chairman Robert B. Aderholt, an Alabama Republican, put in his committee’s bill.
Sara Gasiorowski, food service director for the Metropolitan School District of Wayne Township, Ind., says high school students rejected a 100 percent whole-grain enriched biscuit as a breakfast food, and that some students no longer buy school lunches. Gasiorowski praises the waivers because “we need flexibility and a level of reasonableness” in meeting requirements.
The issue has divided the School Nutrition Association. Nineteen former presidents of the group have voiced concerns about the organization’s efforts to slow implementation of the next phase of the Agriculture Department nutrition rules that took effect July 1.
The first lady, Agriculture Secretary Tom Vilsack, public health advocates and retired military leaders consider the waivers as avoiding nutrition standards that they see as essential tools for combating child obesity.
Supporters of the school meal rules say corporations are behind the push for delaying nutrition standards for snack foods sold in school vending machines or in a la carte lines. But they have not been able to cite specific examples of corporate influence, beyond suggesting that the Minnesota-based Schwan Food Company had urged the SNA to push back against the meal standards.
Rep. Eric Swalwell, D-Calif., walks on Broadway after a Future Forum with young entrepreneurs in the Flatiron District of New York City, April 16, 2015. Reps. Steve Israel, D-N.Y., Seth Moulton, D-Mass., and Grace Meng, D-N.Y., also attended.