Healthy foods, healthy sales? Cross-category effects of a loyalty program promoting sales of fruit and vegetables

Abstract

Globally, consumption of Fruit and Vegetables (F&V) remains below nutritional guidelines. With retailers accounting for a large portion of F&V sales, marketing can be key to increase F&V consumption at household level. However, a key challenge is the design of strategies that benefit retailers, e.g., improving loyalty, whilst promoting societal goals. This study evaluates a points-plus-cash loyalty program where participants received points by purchasing selected F&V, redeemable against a reward (plush toys in the shape of F&V). We estimate the impact of the program by comparing expenditures in several categories before, during, and after the promotional period, across two different years, and comparing consumers who redeemed a reward and those who did not. We use loyalty card data from a Croatian retailer, containing food expenditure in five categories for 268,359 consumers, over 27 weeks for 2 years. We find that the loyalty program increased F&V expenditures at the focal retailer during the promotional period. However, the increase was only for reward-redeemers, for whom the program increased expenditures in F&V as well as in other food categories. This effect persisted – at a declining rate – after the program stopped. Exposure only had a limited effect during the campaign, leading to a reduction in expenditure after the promotional period. Results indicate that a loyalty program promoting sales of F&V can create win-win benefits to both society and the retailer: it increases expenditures on healthy foods (F&V), while improving overall loyalty (i.e., expenditures) to the retailer amongst motivated consumers.