Fintech is full of payments technology ideas in search of a mission, and Wholesome Wave, whose mission is to improve low-income consumers’ nutrition, has searched for years to find a better way to reimburse its constituents for buying healthy food.
Wholesome Wave may be close to finding a solution with two pilots it’s planning to replace a rudimentary token approach with a prepaid card program that doubles the dollar value of the government’s Supplemental Nutritional Assistance Program (SNAP) for recipients who buy fruits, vegetables, plants and seeds with those funds.
The Bridgeport, Conn.-based nonprofit, founded in 2007, currently uses a token system based on wooden nickels to extend funds to 500,000 consumers a year through 1,500 farmer’s markets in 48 states. SNAP recipients may exchange tokens at participating merchants to receive double the value in specific, healthy food purchases, with Wholesome Wave making up the additional funds.
The process is largely manual, and Wholesome Wave wants to adopt a more efficient platform to expand the program’s reach and advance its goal of improving Americans’ health, said CEO Michel Nischan, a former chef who launched Wholesome Wave in 2007.
“The U.S. spends more than a trillion dollars annually on diet-related diseases, with the cost of dialysis for one diabetic person at about $100,000 a year, but evidence suggests that by simply adding fruits and vegetables to the diets of people at risk, we could save millions of dollars and a lot of lives,” Nischan said.
For the first pilot on track to launch this summer, Walmart will support Wholesome Wave’s program in its stores, directing the nonprofit’s funds for recipients who buy healthy items with 5,000 cards distributed in partnership with NutriSavings, a Newton, Mass.-based company that supports corporate wellness programs, Nischan said.
In a second pilot beginning later this year, Wholesome Wave will test the NutriSavings program at hundreds of other participating U.S. supermarkets, including Walmart, using a points system that increase the value of SNAP based on healthy food purchases.
“We’ve been succeeding with our basic concept for years using this very primitive system of wooden nickels that farmer’s markets accept, but it’s time to expand the program and get it going on a broader scale that will take us out to mainstream stores,” Nischan said.
The government helped Wholesome Wave’s cause when the U.S. Department of Agriculture in 2013 announced an initiative to expand SNAP acceptance at the nation’s farmer’s markets, Nischan said, and other retailers are showing interest.
Wholesome Wave approached Walmart to participate in the pilot because its stores already accept as much as 20% of every SNAP dollar, and the company has also committed to cutting prices on fruits and vegetables to make healthy food more affordable to shoppers, according to Nischan.
Getting recipients on board is a grassroots effort. Wholesome Wave works with doctors treating low-income consumers and community health centers, to identify SNAP recipients that may benefit from the program.
“We encourage doctors to ‘prescribe’ fruits and vegetables to likely recipients, which is how we distribute tokens now, and we’ll adapt that process to prepaid cards,” Nischan said.
Wholesome Wave provides its own funding for the program, but it has food industry sponsors including Naked Juice, who contribute dollars to the program, and it’s looking for more.
“We’d like to find a way to expand the program to a broad-based prepaid card program that would work across many different retailers, possibly using a loyalty card program, with other companies and maybe insurance companies participating,” Nischan said.
Wholesome Wave last year recruited Ed Kelly, former president and CEO of American Express Publishing Co., as its chief expansion officer; the company’s chief programs officer is former Nestle executive Skye Cornell.
“We’re not sure when we’ll get there, but with these pilots, we’re getting closer to finding out what it takes to get a viable, national prepaid program off the ground that will be efficient and sustainable," Nischan said.