What Do The New SNAP Retailer Eligibility Rules Mean For Retailers? Eva Rigamonti

Agenda What’s Going On With SNAP? SNAP Retailer Eligibility Overview Proposed v. Final Rule Things to Keep in Mind! Compliance Pitfalls Resources Questions

What’s Going On With SNAP? February 7, 2014 – Agricultural Act of 2014 (Farm Bill) is enacted. February 17, 2016 – FNS issues its proposed retailer eligibility rule. December 8, 2016 – FNS issues its final retailer eligibility rule. May 18, 2017 – FNS delays new retailer eligibility requirements until further notice after Congress directs FNS to rewrite the definition of variety.

How Do C-Stores Participate In SNAP? Criterion A (Convenience Stores) If less than 50% of a store’s total sales are in staple foods, then the store must meet the depth of stock requirements. Criterion B (Grocery Stores & Supermarkets) If more than 50% of a retail store’s total sales are in staple foods designed for home preparation and consumption.

Stocking Requirements Pre- Farm Bill: 3 items in each of the 4 staple food categories (including 1 perishable in 2 categories) = 12 2014 Farm Bill: 7 items in each of the 4 staple food categories (1 perishable in at least 3 categories) = 28 “Perishable” foods: frozen, fresh, unrefrigerated or refrigerated staple food items that will spoil within 2-3 weeks.

FNS Proposal February 17, 2016, Food and Nutrition Service (FNS) proposed a SNAP retailer eligibility rule. If enacted, proposal would have pushed tens of thousands of small format retailers out of SNAP.

FNS Proposed Rule Implement Depth of Stock Requirements (7x4=28). Staple Foods = single ingredients, consumed at meals. 6 units of each item on shelf (168 items at all times). Narrowly defined variety: need different species. Hot Foods Threshold: 15% or more of their total food sales come from sales of hot foods  automatic disqualification.

FNS Final Rule Issued December 8, 2016 Much improved over proposal

Depth of Stock Requirements Final SNAP Rule Depth of Stock Requirements 7 different varieties in each of the 4 staple food categories (1) Meat, poultry, or fish (2) Bread or cereals (3) Vegetables or fruits (4) Dairy At least 1 perishable item in 3 categories

Final SNAP Rule Stocking Requirements Staple foods: multiple ingredients count, grab-n-go items count! 3 units of each item on shelf x 28 = 84 21 day retroactive grace period  Keep your Invoices!

3 units, 7 varieties, 4 staple food categories = 84 items Meat, Poultry, or Fish Bread or Cereals Vegetables or Fruits Dairy  

Final SNAP Rule Hot Foods Threshold: If 50% or more of your total gross sales are of heated foods, you’re ineligible to be a SNAP retailer. Gross retail sales include fuels, tobacco, etc. Co-located firms

Compliance Timeline Hot Foods Threshold: Retailers must be in compliance beginning October 16, 2017. Stocking requirements: 7 varieties x 4 staple food categories = ON HOLD Stocking unit requirements: 3 varieties x 4 staple food categories x 3 units of each on shelf = 36 items  January 17, 2018

Retailer must offer 7 varieties in each staple food category: The Variety Issue Retailer must offer 7 varieties in each staple food category: Variety = Different types of foods within each staple food category (i.e. different species.)

The Variety Issue Variety ≠ different brands, nutrient values, flavorings, packaging types or sizes of the same or similar foods. Similar food items do not count as more than one staple food variety.

Meat, Poultry, or Fish Beef Goat Chicken Eggs Pork Soy-based protein Turkey Beans* Tuna Peas* Duck Nuts* Lamb

Vegetable or Fruits Apples Potatoes Bananas Grapes/Raisins Pears Avocado Peaches Lettuce Strawberries Beans* Tomatoes Peas* Spinach Nuts*

Breads or Cereals Rice Tortillas Bread Infant Cereal Rolls Cold Cereal Hot Cereal Pasta Pitas

Dairy Yogurt (Cow) Soft Cow Cheese Cow’s Milk Infant Formula Soy Milk Sour Cream Almond Milk Butter Shelf-Stable Liquid Cow Milk Hard Cow Cheese

Accessory Foods Accessory foods are not staple foods  do not count towards a retailer’s stocking requirements, but are SNAP eligible. Accessory foods: snacks, desserts, crackers, drinks, condiments, and spices.

Things to Keep in Mind (Retailers) Multiple ingredient items count  Look at main ingredient Accessory foods ≠ NOT staple foods.  Look at ingredients 3 of each item on shelf  Keep your invoices! Watch for FRAUD! See potential fraud? Document, Address it, Alert FNS.

Potential Compliance Pitfalls What Counts?

Potential Compliance Pitfalls What Counts? Vegetables or Fruits? Accessory Foods?

Potential Compliance Pitfalls What Counts?

Potential Compliance Pitfalls What Counts?

Resources FNS Website: https://www.fns.usda.gov/snap/enhancing- retailer-standards-supplemental-nutrition-assistance- program-snap SNAP Retailer Service Center: # 1-877-823-4369

Questions?