A payment processing company is betting that discounting produce will help keep employees healthy--and insurance costs down.
Everybody knows what you eat affects your health, yet many Americans continue to eat crap. According to the American Heart Association nearly 179 million children and adults in the United States are overweight or obese--that's more than half the population.
For employers, all this chubbiness is costly business and one reason their health insurance rates continue to climb. For employees, the health risks of being overweight are multifold: Type 2 diabetes, high blood pressure, heart disease, stroke, sleep apnea and fatty liver disease are just a few of the many things that can slow down or even kill a person. Plus, people who carry around too much weight are less happy and, as a result, less productive.
A New Kind of Wellness Program
I have a friend who works at a smallish Minnesota company that's using a pretty overt method for getting people to eat smarter. She had to do a fair bit of pestering to get me to talk to her boss about it, though. Wellness programs outside of Silicon Valley usually involve little more than health screenings and subsidized health club memberships (whereas companies like Google, Apple, Facebook, and LinkedIn have fleets of bikes their employees can pedal around campus and many of them offer free health insurance and generous vacation policies that are supposed to keep workers in a Zen state of mind).
Minneapolis-based Solutran--a payments processing company that competes with the likes of big guns like Citibank, First Data, and U.S. Bank--appears to have created something novel with its S3 Smart Coupon technology, the backbone to the Healthy Savings program the company launched this summer with health insurance company Medica.
On the surface it seems unimpressive--it's just a bar-coded card people can hand a grocery store cashier to get discounts on selected healthy foods.
But it turns out to be a tool employers can use to bestow Google-like perks on employees.
Health insurance companies can give Healthy Savings cards to their members and employers can offer the card to their employees to give them access to more than $1,300 of savings on healthy foods. And if a company is really serious about encouraging workers to choose healthy foods it can use the program to even help pay for the produce they buy.
Solutran itself does this for all its 130 employees, providing them with 25 percent off fresh fruit and vegetable purchases, up to $10 a week, meaning if someone puts $30 worth of produce in a shopping cart he or she only has to pay $22.50 for it at checkout.
"So you can see why if you had a card that did that you'd use it like crazy, right?" Solutran CEO Barry Nordstrand asks me.
I would, actually.
The Appeal for Big Brands
Nordstrand says nobody--not even Google--has been able to electronically track and pay for the produce purchases of employees at grocery stores before because the technology didn't exist to facilitate it.
Consumer packaged goods brands like the idea because it's a better branding opportunity than paper coupons since Solutran sends out regular emails to cardholders about promotions and is able to track and limit the number of times an individual can receive a discount. And unlike paper coupons, Solutran doesn't charge them any backend fees to use its S3 Smart Coupon technology.
Where Solutran does make its money is by charging employers and health insurance companies around $5 per employee or member per year for access to the program.
Nordstrand says at the moment Solutran is focused on selling the Healthy Savings program to health insurance companies that are incorporating it into their wellness offerings. Once on board, all employers working with a particular insurer would have access to it as well.
Nordstrand tells me the S3 technology is patent pending and other players in the healthy coupon space were surprised that Solutran was able to convince grocers in the Minneapolis and St. Paul metros such as Cub Foods, Rainbow, Lunds, and Byerly's to install its code in hundreds, if not thousands, of payment terminals as well as within the grocers' own back-end software.
"To integrate with point of sale is always difficult because the lifeblood of a grocery location is their checkout counter so that's kind of sacred ground inside a grocery retailer," Nordstrand says. "We needed to have a really good reason for them to want to integrate with us."
So what lured these grocers to go to the trouble? Nordstrand says by the time the program is fully deployed in the Twin Cities around 400,000 households are going to have Healthy Savings cards and if a grocer doesn't accept the card it risks losing business to another that will.
Solutran also financed the implementation of its S3 technology so there was no cost to the grocery chains that are using it. It also promises to quickly collect money from employers so that grocers are reimbursed for produce discounts within 48 hours.
"Fresh produce is one area of the store that's not generally promoted. There are thin margins and it's harder for grocers to discount it, so when we came up with this program there was a lot of interest in it," Nordstrand says. "And employees love it."
So far Solutran and Medica have rolled the Healthy Savings program out to 200,000 households in the Twin Cities but next year will take it nationwide. That's assuming they can ink deals with more health insurance companies and grocery chains in other parts of the country.
It could happen--Solutran's S3 technology is baked into certain versions of the terminal software sold by IBM and NCR and already used by several national grocers Solutran wouldn't name.
"Our goal is to integrate with all major POS systems," Nordstrand says. "We want to make it very easy for grocery chains to begin accepting Healthy Savings transactions."
CHRISTINA DESMARAIS is an Inc.com contributor who writes about the tech start-up community, covering innovative ideas, news, and trends. Have a tip? Email her at christinadesmarais (at) live (dot) com. @salubriousdish