Advertising and Promotion in Food Marketing

Anthony E. Gallo

gen 1984 · U.S. Department of Agriculture, Economic Research Service, National Economics Division

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Extract: Food is the most advertised product in the United States, amounting to $8 to $10 billion in 1980 and accounting for between 3 and 4 cents of each food dollar. Food manufacturers have increased their share of advertising and promotion expense while the retailer's share has gone down because of declining use of trading stamps. Promotion by fast food restaurants increased sharply over the past decade. Electronic advertising accounts for about 40 percent of food promotion, while printed and premium promotion account for a fourth each. Couponing, the fastest growing promotion form, accounted for about 11 percent. Between $2 and $4 billion of total food advertising was spent on manufacturers' promotion to the retailer. Advertising and promotion had little impact on increasing total U.S. food consumption, but may have diverted food purchases towards more heavily promoted foods.