Navigating SNAP Waivers & Compliance with Sifter | 5IM

Foreigning us now for five insightful minutes is Kevin Billings, Vice president of sales and Business development at sifter.

Kevin is here to share the latest on significant proposed changes to the US SNAP program.

But first, Kevin, listeners will become increasingly familiar with the Sifter name for your sponsorship of Grocer Talk.

So can you start by just sharing a little bit about how you support grocers with their personalization?

Thanks for having me, Ben.

Really excited about our sponsorship with Grocer Talk.

Yes.

So a little bit of history if you don't know much about Sifter.

We are a food is medicine food intelligence technology solution.

We've been around for five plus years now, but we've got a a really deep grocery retail background.

Our founders, Andrew and Thomas Parkinson, along with Judy Sebold, our third founder.

Andrew and Thomas are the founders of Peapod.

So the first online grocery store back in the day.

So have been innovators forever and ever.

But after they sold it to I hold Delhaize, they've always had a desire to make healthy eating easy for everyone.

So that was the kind of brainchild behind Sifter.

Chris, create a technology that would help retailers do that.

So currently we're engaging with retailers to help them with better personalization, any food is medicine strategies that they have.

And so we've been helping them for the last four or five years and doing all of those things.

Okay Kevin, let's talk about SNAP waivers because they've been a really hot topic in our industry recently.

So look scene setting for anyone outside the US SNAP is the US Supplemental Nutrition Assistance Program, a federal government initiative that provides food purchasing assistance to low income households.

You know, think of them as modern day food stamps.

So Kevin, can you describe for us what are the so called SNAP waivers and what's the latest on their state level implementation?

A year and a half or so ago there was a movement from states to ask for waivers from the USDA to not allow SNAP subsidies to be spent on foods and beverages that we know are causing chronic disease.

So think about sodas and candies, high fructose corn syrup as the first ingredient items.

And over the last year or so there are now 23 states that have active waivers.

Some of them have been put on delay because of the USDA's desire to maybe have some open comment periods just to make sure that they're aligning on doing the right things.

But at the end of the day we feel like even those delays are going to be diluted soon and most states will have a waiver but philosophically, the goal behind the waivers are to try to not have SNAP subsidies paid for things that we know are causing chronic disease.

So what do you see, Kevin, from your position as the potential impact for both grocers and CPGs of the waivers?

And what do retailers need to make sure they're doing to maintain their SNAP license?

I mean, the USDA said, hey, if you're not compliant, you might lose your SNAP license.

That's not a good thing for many retailers.

You know, up to 30 to 40% of their revenue is coming from SNAP dollars.

So they definitely don't want that to happen.

So it's a big thing.

And of course CPGs are impacted because if they happen to have products that are ineligible now, then they're obviously losing revenue.

So a lot of revenue at play here.

But interestingly enough, what we're hearing from retailers is as much as they were concerned about this movement at first, some retailers are telling us that because their margins are so low on some of their direct store delivery items that include the soda and candy, that now that Sifter is working with them to serve up alternative products that are eligible in these SNAP affected categories, their margins are actually higher on those products.

So less of a revenue strain for them at this point.

But all in all, you know, the, the retailers has have asked for two things.

One, accurate restricted product lists to integrate into their POS so that they're in compliance, but also tools for their shoppers for nutrition education, better guidance, and opportunities for their shoppers to scan products in store to determine eligibility well before they get to checkout.

So I really want to get into a practical example of this.

And you know, we've been talking about SIFTA having recently announced a contract with the state of Arkansas for a SNAP waiver compliance service.

So can you tell me more about that and the impact that it's having on both retailers and SNAP shoppers in the state?

Earlier this year, the governor, Governor Huckabee Sanders made a strategic decision and a conscious choice to pay for services that retailers of Arkansas could take advantage of, but also develop a SNAP app for all of the Arkansas SNAP shoppers to use in store to scan products for eligibility.

So we worked hard to win that contract and that's what we've created for the state, a data exchange for retailers to submit their assortment for us to do our analysis.

And we're delivering the accurate restricted product list back to them based on their assortment.

And then the Arkansas Snap companion app is really being highly adopted by Snap shoppers across the state so that they can scan products to determine eligibility well before they get to checkout.

This is part of a large, healthy initiative for the state of Arkansas, but it's working really well.

And our hope is that other states will adopt this same model in order to be able to serve the SNAP shoppers of their state well, along with the retailers of their state really well.

So, Kevin, just describe to us how the SIFTA solution, which you designed to help shoppers make kind of active, healthy lifestyle choices.

How does it help retailers and CPG brands navigate this SNAP landscape?

Because of our food is medicine background and because of the way that we built our, our, our technology, our APIs, our processes, methodologies and algorithms around, you know, truly understanding the ingredients and nutritional makeup of all food and beverage products in it set us up well for this.

Now, I will say the complications around the SNAP waivers is that every state is different.

So, you know, some states are very straightforward.

It's like, hey, no more soda, no more candy.

Some are way more granular.

Arkansas is an example.

A juice that is less than 50% real juice is ineligible for SNAP, but if it's more than 50% real juice, it's eligible.

So, you know, some states are digging in a little bit deeper on their definition of a restriction.

So sifter's in a unique position because again, we understand the nutritional makeup of all food and beverage products to be able to align the restrictions through our analysis to be able to accurately determine what UPCs are eligible or not.

So, you know, we feel that, you know, states should have the ability to make those determinations on their own.

But we also feel that Sifter is the perfect partner to help them make sure that they're implementing accurately because of our unique abilities, as I defined just a few months ago.

Great.

So, Kevin, if people want to hear more, if they want to discuss this further, how can they contact you?

Kevin.billingsiftersolutions.com or you can go to our website, siftersolutions.com and track down to our SNAP page with more detail.

Appreciate you joining us.

Thank you, Kevin.

Thank you so much.