How Brands Like Domino's Profit From School Lunch

How Brands Like Domino's Profit From School Lunch
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    We hear a lot about school lunches in America and the food itself doesn't
    always get the best reputation. When I think about school lunches
    I think of boiled hamburgers. The cheese was always like plasticy. The staler it was
    the more delicious it was. From Hollywood depictions to real-life memories, the
    school cafeteria is a quintessential part of American culture. But who decides
    what food gets put on the tray? And how come one school serves this on a $1.25 budget
    while another serves this? Why are teachers working at McDonald's for a night?
    And how does a slice of Domino's Pizza meet USDA guidelines Those are all
    loaded questions with complicated answers. But if you really boil it down
    the answer is money. Lots and lots of money.
    Today, the 4.9 billion lunches that get doled out in school cafeterias every year make up a
    multi-billion dollar industry that makes sure millions of kids are fed. It starts
    with federal money. But on its way to cafeterias school districts have to
    order the meals and food giant's grab a big slice of the school lunch pie. But
    before we get to all of this.
    Food fight sweeping school cafeterias. Going from tray.
    Dump it in there.
    To trash.
    Let's go back to the 1800's.
    In 1853, the Children's Aid Society of New York started an informal lunch program
    for its vocational school. But it wasn't until the 1930's that school lunches
    really caught on in the rest of the country. In about the 1890's you see a
    real expansion and the role of schools in the community. They actually
    start to become social institutions and so in addition to basic education,
    they're also providing health services. And one of the things that happens when
    you know physicians and nurses start working in schools, they start
    documenting what kinds of cases of things like Malnourishment. In 1935,
    Congress set aside money for school lunch programs. Not everyone in the
    community supported the government's efforts to feed kids during the day.
    Restaurant owners sued school districts for lost business. The courts typically
    cited in favor of the school's right to operate lunch rooms and by 1941, roughly
    6 million kids were eating food provided by the government. That food
    came from products farmers had too much of, like pork, dairy and wheat. A win for
    both schools and farmers. In the 40's, the federal government passes the National
    School Lunch Act and this makes it possible to actually fund the programs
    predominantly with public money.
    National School Lunch programs in thousand of schools for millions of American children.
    By this time, other countries around the world
    had already developed their own school lunch systems. While the U.S. took the
    lead from European countries, there was one thing that made school lunches in
    the U.S. distinctly American, a hint of capitalism. The fundamental basis for
    school lunches was a sort of business models. They often adopted like little
    tokens, like little coins or use like tickets of some sort, that, you know,
    paying kids would buy and then kids who were receiving free lunches would be
    given the ticket. But the idea is that you were exchanging something. There was a transaction.
    Enter the school lunch lobby. Today, you have groups like the
    School Nutrition Association and National School Boards Association
    advocating on behalf of the schools and corporations like Tyson and PepsiCo
    show face at meetings to make sure their products are on school district's minds.
    Meanwhile, groups like the Food Research Action Center and the Center on Budget and Priorities,
    keep a close watch on nutrition.
    Robert Doar worked as a commissioner under Mayor Bloomberg, where he administered food assistance programs
    in New York City. And he's no stranger to the lobbying efforts in the world of government assistance.
    It is true that the interest here are not only what's best for low-income families. The other
    interests are various providers of food. This is true in anything we do in government.
    Any time the federal government is spending significant dollars on a product, people that sell that product are
    gonna be interested in maximizing that spending.
    In 1966, Congress passed the Child Nutrition Act expanding the school lunch program.
    In 1969, about 15 percent of kids were getting their lunch for free or at a lower price.
    In fiscal year 2017, that number had risen to 73 percent.
    That meant that millions of trays needed to be filled every day and that created a business opportunity.
    School lunch programs really start to move away from scratch cooking and toward this kind of
    factory prepared meal that's been reheated and then served to them.
    And then came the funding fights which led to the infamous ketchup controversy.
    In 1981, the Reagan administration wanted to cut $1 billion in school lunch funding.
    In order to meet the nutritional guidelines while staying on a budget, the
    Department of Agriculture got creative and declared ketchup a vegetable.
    The backlash was so strong the funding cut was quickly reversed. But ketchup hasn't
    been the only product to stretch the definition of what makes a vegetable.
    Even today some school pizza sauces count as a serving of veggies.
    French fries obviously are made out of potatoes and potatoes are vegetable. That was
    another defeat I would say that the USCA experienced because of industry lobbying.
    Yes, fries still count as a veggie. Frozen potato wedges are on the USDA's vegetable list
    for child nutrition programs. Those bags of frozen foods have to come from
    somewhere, which is where companies like Tyson come in. The company valued at more
    than $21 billion saw the opportunity and acted. Tyson has its own
    K-12 product catalog of frozen foods made just for school cafeterias. We reached
    out to Tyson for comment and to see how much of their business comes from its
    K-12 food products. The company didn't respond and it's K-12 earnings aren't
    specified in its annual report. But frozen foods aren't the only way to cash in on school lunches.
    In 2014, the USDA came up with something called Smart Snack guidelines, making the snack line healthier.
    Which meant if big food companies wanted to keep their products in schools, they had to adapt.
    Now, nearly every major food manufacturer in the U.S. has a catalog
    of products custom-made to meet USDA standards. We felt like kids were getting
    exposed to these brands, you know like Frito-Lay, brands and then they would go
    to the grocery store and want to buy that brands and it's not the same product.
    We did a study where we really put the two products side-by-side.
    Just looking at that, it's super obvious that the companies really made no effort to
    distinguish that when they were selling in school versus the one you could buy in the store.
    The product on the left labeled special edition is sold in schools. It has seven grams of sugar. Vitamin C, 25%.
    The product on the right, sold in stores has 10 grams of sugar. The vitamin C in this one is just 10 percent.
    And those custom made foods aren't just in the snack line. Domino's has a special
    smart slice program with pizzas tailor-made to meet USDA standards.
    And the more pizzas schools buy, the more rewards point they rack up. Those can be traded
    in for Domino's swag and even cafeteria equipment. Domino's told us "We are
    proud of our school lunch product. It meets the USDA guidelines for school
    nutrition standards and is something that kids love to eat. It is also good
    for the schools, as it is simple for them to serve and keeps lunch participation
    rates high." It also said that schools make the choice as to whether to serve
    their pizza branded or unbranded. Remember the SNA, one of the lobbies on
    behalf of schools? They're listed as a smart slice partner and it's worth
    mentioning Domino's, Tyson and a number of other major food companies or SNA industry members.
    Meaning they pay money for monthly newsletters, advertising
    discounts and access to local legislative contacts.
    The SNA said " While many schools are working to increase the amount of
    freshly prepared and scratch-made menu items, those with limited equipment and
    labor resources rely on healthy pre-prepared foods to ensure students
    receive balanced meals each day." Corporate money reaches far beyond the
    lunchroom. It works its way into schools sporting events and celebrations through fundraisers.
    Think of scoreboards, parking lot signs, pizza parties or that summer reading program.
    Krispy Kreme sponsors a major fundraising program too and McDonald's has a McTeacher's Night fundraising
    program, where teachers come in to work the counter, in hopes that their kids
    come in to see them. It caught a lot of flack from school districts, with L.A.'s
    ending the program altogether. But some schools still participate. None of those
    companies return our request for comment. So why do people care so much?
    Schools need food and big companies have it. But the childhood obesity rate has more than tripled since the 1970's.
    And with roughly 30 million kids getting their lunch from a government funded program,
    it raises the question: What responsibility does the government have to make their meals healthy?
    In 2010, Michelle Obama spearheaded a major change to the systemwith the Healthy Hunger-Free Kids Act.
    We have an obligation to make sure that those meals are as nutritious as possible.
    It tightened nutrition guidelines for cafeterias across the country, requiring them to serve more fruits and vegetables.
    At first, its noble intentions were praised but some took issue with how it actually played out in lunch rooms
    across the country. Kids throw food away at about the same rate as the rest of America.
    But after the Healthy hunger-free Kids Act, people just started noticing it more.
    More kids were taking fruit. It went up significantly but the same proportion was getting eaten and thrown away.
    So, more is getting eaten and more is getting thrown away. Schools seem to be
    caught in the cycle of a lack of funding, kitchen training and time.
    While there are federal regulations, the menus really come from the schools on the local level.
    They're the ones ordering and preparing the food.
    Since it's decentralized, it's hard to know which companies are making the most money
    and if kids are really getting fed quality meals. But some people are trying to change that on a local level.
    Dan Giusti is the Former Head Chef of Noma, where he created high-end meals for hundreds of dollars a person.
    Now he's running a group called Brigade, working to bring scratch cooking, not just warming stations, to
    kitchens on a $1.25 budget. And he's trying to change the reputation of school lunches altogether.
    It's almost like it's this rite of passage. Like as a student in an institution, like that's just what you get. You get lousy food.
    In May 2018, the Trump administration rolled back some of the rules around whole grains, sodium and flavored
    milks, to give schools more flexibility in their meal planning. The politics, money, and controversy around
    school lunches aren't going away. But at the end of the day, the kids are the ones it really impacts. And for some
    school lunches are the best meal they're going to get throughout the day.
    These kids are showing up to school everyday but at home, their at home not eating. And it makes you rethink
    everything like holidays, like oh three day weekend, great! Well that mean these kids aren't eating for three
    days. Or snow days. But that means that not only are these kids not eating, but they also at home, in an
    environment that's probably not good for them.
    Studies have shown that if kids are fed, they perform better in school. And with millions of kids relying on free
    or low-cost lunches every day, it's a big important problem to solve.
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