The Slowcook at Spydog Farm The Slowcook at Spydog Farm

Finally Revealed: Processed Food Rebates Dominate School Cafeterias

October 18th, 2011 · 33 Comments · Posted in kids, school food

Chartwells gets big rebates serving meals like this

When I first started writing about the food being served in my daughter’s elementary school cafeteria, I figured there had to be a reason children were being fed Apple Jacks cereal, strawberry milk, Pop-Tarts, Giant Goldfish Grahams and Otis Spunkmeyer muffins for breakfast.

I was right. The manufacturers of those sugar-laden products pay hefty rebates–some call them “kickbacks”–to giant food service companies as an inducement to purchase their highly processed goods. But I have now learned it’s not just the lousy food that’s fueled by rebates. Just about everything that goes into running a public school cafeteria comes with a rebate check that helps make sure the industrial version of food wins out.

In what may be the first ever detailed look into how industry rebates dominate school food service, documents I obtained under the Freedom of Information Act indicate that more than 100 companies paid rebates in recent years to the food service management company hired by D.C. Public Schools–Chartwells–for everything from breakfast cereal, hamburger patties and canned green beans to paper cups, armored car services and drug counseling for employees.

Far and away the biggest contributor to the rebate dollars collected by Chartwells was a company I had never heard of, but one that apparently plays an oversized role in feeding our city’s children–Performance Food Group. According to an itemization released by D.C. Public Schools, Performance Food Group paid more than $400,000 in rebates for goods and services supplied to the city’s schools over the last three years.

Based in Richmond, Va., Performance Food Group claims to be “one of the nation’s largest foodservice distributors” with multiple brands and more than 1,000 products aimed not only at schools and restaurants but “every kind of eatery from coast to coast.” The company has operations in 29 states, “from our distribution warehouses in Tennessee, to our seafood facility in Miami, to our cheese processing facility in Minnesota.” It employees 10,000 workers just to transport all of its goods, and its trucks “log millions of miles each year,” according to the company’s website.

Second on the list of biggest rebate providers in D.C. schools is General Mills, the cereal maker, at $41,218, followed by Kraft, supplier of mayonnaise and salad dressings at $36,165, and Country Pure Foods-Ardmore Farms, manufacturer of fruit juices, at $34.991. The list includes many of the nation’s top industrial food processors, such as Kellogg’s ($20,717), ConAgra ($25,030) and Tyson ($15,792), as well as frozen pizza giant Schwan’s ($24.561) and muffin maker Otis Spunkmeyer ($21,377).

Manufacturers pay rebates based on large volume purchases–literally, cash for placing an order. Rebates are said to be worth billions of dollars to the nation’s food industry, although manufacturers as well as the food service companies who feed millions of the nation’s school children every day–Chartwells, Sodexo and Aramark–treat them as a closely-guarded secret.

The U.S. Department of Agriculture requires that food service companies engaged in “cost reimbursable” contracts with schools credit any rebates they receive to their school clients. For more than a year, attorneys for D.C. Public Schools refused to make public an itemized list of rebates collected by Chartwells, claiming the information constituted “trade secrets.” The schools were overruled by Mayor Vincent Gray’s legal counsel after I filed an administrative appeal.

John Carroll, an assistant New York State attorney general investigating rebating practices there, has said rebates pose “an inherent conflict of interest” in school feeding programs because they favor highly processed industrial foods. In cases where schools pay a food service company a flat rate to provide meals, the companies are not required to disclose the rebates they collect. In those cases, Carroll recently told a U.S. Senate Panel, rebates tend to drive up the cost of food, cheating children out of nutrition they might otherwise have on their lunch trays.

Carroll also described cases where rebates discouraged the use of local farm products in school meals. Produce vendors can’t afford to pay a rebate for local apples. But in at least one case, a produce distributor raised the prices of his goods so that he could pay a rebate to a food service company.

A Homeland Security sub-committee in the U.S. Senate is investigating possible rebate fraud in contracts across the entire federal government.

Here in the District of Columbia, children were being fed meals manufactured in a suburban factory until Chartwells in the fall of 2009 introduced something it called “fresh cooked.” As I discovered while spending a week in the kitchen at my daughter’s elementary school, what that entailed was reheating pre-fabricated meal components such as chicken nuggets and tater tots. For breakfast, children were often consuming up to 15 teaspoons of sugar in the form of processed cereals, flavored milk, cookies and muffins.

Around that same time, D.C. Public Schools hired a new food services director, Jeffrey Mills, who scoured the entire Chartwells menu item-by-item, removing the flavored milk and processed treats and replacing many of the familiar re-heated lunch items. Funds allocated by a “Healthy Schools Act” approved by the D.C. Council helped pay for fresh local fruits and vegetables. But Mills said he sometimes encountered stiff resistance from the local Chartwells manager because the products Mills wanted to serve were not on Chartwell “preferred” product list.

According to Carroll, site managers for food service companies face punishment from their employers if they deviate from products that pay the biggest rebates. Rebates are extremely lucrative, since they generate revenue that requires virtually no labor. Some products trigger rebates of up to 50 percent of their listed value. And while USDA regulations require that rebates be credited to schools with “cost reimbursable” contracts, it is believed that the big food service companies have found ways to profit from them nonetheless.

For instance, it is speculated that manufacturers offer stepped-up rebates for very large purchase orders. Thus, while a single school district may only be entitled to 10 percent worth of rebates on its share of breakfast cereal, an order for cereal covering multiple school districts might trigger a rebate of, say, 20 percent. The food service company would simply pocket the difference.

Chartwells manages food service in more than 500 school districts across the country. The products it uses are supplied by a sister company called Foodbuy, whose employees concern themselves entirely with writing huge contracts with food manufacturers and collecting the rebates on behalf of their parent company, Compass Group, based in Great Britain. Compass group, which owns numerous food service operations in this country–including Chartwells, Bon Appetit, Restaurant Associates, and Wolfgang Puck Catering–claimed some $22 billion in sales in its most recent annual report.

In July of last year, I disclosed that Chartwells had collected more than $1 million in rebates and discounts during its first 18 months of operation in D.C. schools. Subsequently, the schools acknowledged that they had been waiting nine months for Chartwells to make good on a request to produce an itemized accounting of where those rebates came from.

I can now pass along a list of most of the companies involved, compiled from hundreds of data entries contained in the documents obtained from D.C. Public Schools, representing rebates reported by Chartwells since fall 2008. Some of the companies cited in the documents could not be positively identified.

$ 415,051.41 Performance Food Group: food and food service products

$ 41,218.07 General Mills: breakfast cereals

$ 36,165.78 Kraft General Foods: salad dressings, condiments

$ 34,991.20 Country Pure Foods-Ardmore Farms: fruit juices

$ 32,839.50 Jenny-O Turkey Store: processed turkey products

$ 29,075.44 Allen Canning: canned vegetables

$ 25,030.91 ConAgra: prepared foods

$ 24,561.45 Schwan’s: frozen pizza

$ 21,377.88 Otis Spunkmeyer: muffins

$ 20,717.38 Kellogg’s: breakfast cereal

$ 20,628.47 Ecolab: kitchen sanitation services

$ 19,002.03 Pilgrim’s: chicken products

$ 15,792.67 Tyson: chicken products

$ 13,682.74 Keany Produce: fruits and vegetables

$ 16,583.00 Ford Motor Co.: vehicles

$ 15,011.72 Supply America: food service supplies and equipment

$ 14,324.32 Frito Lay: chips and snacks

$ 13,974.08 JAFCO Foods: breaded chicken

$ 9,959.46 Butensky Services: refrigeration repair

$ 9,830.65 Simplot Food Group: frozen potato products

$ 9,509.46 Smithfield Packing: ham, hot dogs

$ 9,153.11 Pactiv: plastic food packaging

$ 8,226,89 Atlantic Mills: kitchen wipes, aprons

$ 8,056.00 VF Solutions: uniforms

$ 7,344.53 Heinz: ketchup

$ 7,308.33 Dunbar Armored: armored car services

$ 6,727.56 Pinnacle Foods: syrup, pickles, barbecue sauce

$ 6,591.27 Unilever Food Solutions: dressings, sauces, seasonings

$ 6,578.11 Michael Foods: frozen egg products

$ 6,193.99 Coca-Cola: soft drinks, bottled water

$ 5,953.75 Automotive Rentals: vehicle rental

$ 5,680.97 Great Lakes Cheese: cheese products

$ 5,195.30 Mission Foods/Gruma: tortillas

$ 5,152.21 Office Max: office products

$ 4,718.02 McCormick & Co.: spices

$ 4,678.79 Cadbury: chocolate

$ 4,388.70 Cargill Meat Solutions: processed beef

$ 4,368.03 National Paper & Plastic: plastic cutlery, disposables

$ 3,679.00 Network: undetermined

$ 3,571.05 Osborne Co.: undetermined

$ 3,239.65 Sara Lee Bakery: bread, baked goods

$ 3,200.00 Rush Truck Center: trucks

$ 2,882.68 Produce Source Partners: produce, cut fruits and vegetables

$ 2,604.29 Nestle: frozen prepared foods

$ 2,587.67 REMA Foods: canned, frozen and packaged commodity foods

$ 2,516.04 Georgia Pacific-Dixie Foodservice: disposable cups, plates

$ 2,571.30 Tropical Paradise Inc.: frozen fruit slush

$ 1,992.46 Dr. Pepper/7-Up: soft drinks, bottled water, Snapple

$ 1,970.99 Advanced Food Company: Philly steakds, bugers, fajita strips

$ 1,917.71 Schreiber Foods: processed cheese

$ 1,770.04 Hormel: processed meats

$ 1,604.00 MegaMex Foods: salsa, canned jalapeno peppers, refried beans

$ 1,317.36 Lamb Weston: potato products

$ 1,305.25 Campbell’s Foodservice: Pepperidge Farm Goldfish, Giant Goldfish Grahams

$ 1,274.61 Anchor Packaging: plastic food containers

$ 1,219.00 Fabri-kal Corp.: plastic food containers

$ 1,250.20 Iceland Seafood Corp.: frozen fish

$ 1,210.00 Sara Lee Meats—Jimmy Dean: breakfast sausage

$ 1,112.30 Rich Products: frozen foods

$ 963.95 WinCup: Styrofoam cups

$ 913.80 Colavita: olive oil

$ 853.41 Masterfoods—Uncle Ben’s: instant rice

$ 810.25 Ventura Foods-Sunnyland: oils, shortenings, pan coatings

$ 683.94 Verizon Wireless: communications

$ 579.46 First Advantage Occupational Health Services: drug screening, substance abuse assistance

$ 564.24 Schwan’s Bakery: undetermined

$ 539.80 Goodman Foods: undetermined

$ 531.57 Gehl’s Guernsey Farms: cheese sauces

$ 494.54 Bon Chef: food presentation equipment

$ 401.65 Jet Plastica: plastic cutlery, straws

$ 400.80 Smucker’s: jams, jellies

$ 400.00 Mickey Truck Bodies: specialty delivery trucks

$ 398.00 Ken’s Foods Inc.: salad dressings

$ 368.75 Wholesome & Hearty Food: vegetarian burgers

$ 314.89 Handi Foil: disposable aluminum containers

Leave a Comment

Please note: Your comment may have to wait for approval to be published to ensure that we don't accidentally publish "spam". We thank you for understanding.


  • Philippa

    That is a frightening list of rebates, and to me, even more frightening is the list of processed foods all on one page. When you don’t eat *any* of that junk, it’s easy to become disengaged from what is being served to children, even while arguing for healthy food.

    By the way I think you probably have a typo in the gram count of the sentence “For breakfast, children were often consuming up to 15 grams of sugar in the form of processed cereals, flavored milk, cookies and muffins.” If only it really was 15g…

  • Bethesda Locavore

    Brilliant. I love that you are doing this.

  • Ed Bruske

    Thanks, Phillippa. You’re right. It’s supposed to say “15 teaspoons.” I made the fix.

  • Delora

    Please tell me that you’re getting a major publication to pick up this article. This is too good to be stuck on a little blog post. I’m definitely sharing it everywhere I can.

  • Ed Bruske

    Thanks for spreading the word, Delora. The mainstream media don’t show much interest in the details of the national school meals program. The last piece I wrote on this subject, when John Carroll testified before the Senate panel, was linked to in the New York Times “Diner’s Journal.” I’ve sent this to my friends at The Post, etc., and we’ll just see if they do anything with it. It also gets republished (usually) at the La Vida Locavore blog, which is widely read by the food policy community and on Capitol Hill.

  • Ayde Lyons

    Chartwells’ contract to provide foodservice to the students in the District of Columbia is governed by USDA regulations which require that all volume allowances and rebates be returned to the school system. Chartwells is compliant with these regulations, both in DC and nationwide. It is important to note that these volume allowances serve to reduce costs both to the school system, as well as students.

    In addition, we are committed to serving healthy, safe, nutritious and environmentally-sustainable foods to students. In 2010, Chartwells joined the White House Campaign to Eradicate Childhood Obesity. Our own Food and Nutrition Guidelines, which were launched in July 2010, anticipated the USDA changes and exceed their standards for menu planning. They are also well-aligned with the Institute of Medicine’s recommendations.

    Ayde Lyons
    Director of Communications
    Chartwells School Dining Services

  • Ed Bruske

    Thanks for weighing in on this, Ayde. I think your comment that “Chartwels is compliant” with the USDA rquirement that “all volume allowances and rebates be returned to the school school system” can be taken quite literally, yet I wonder if you’d care to address specifically this aspect of the story:

    “And while USDA regulations require that rebates be credited to schools with “cost reimbursable” contracts, it is believed that the big food service companies have found ways to profit from them nonetheless. For instance, it is speculated that manufacturers offer stepped-up rebates for very large purchase orders. Thus, while a single school district may only be entitled to 10 percent worth of rebates on its share of breakfast cereal, an order for cereal covering multiple school districts might trigger a rebate of, say, 20 percent. The food service company would simply pocket the difference.”

  • MommyPurls

    Thank you for doing this, Ed! I hope that DC parents will follow your lead and start taking matters into their own hands.

  • Bekki Bruckner

    I work in the schools and see every day what the kids eat. It makes me sick. My pet peeve is the chocolate milk which has GMO’s in it and lots of sugar. The kids should be drinking ORGANIC WHITE MILK period! Get the chocolate milk out of the schools. Kids are precious. They should be eating fresh organic vegetables too.

  • Beth

    How can anyone believe serving Otis Spunkmeyer muffins to our children is acceptable? To Ayde Lyons’ statement “we are committed to serving healthy, safe, nutritious and environmentally-sustainable foods to students”. What does that mean? It’s a rather empty statement, specifics would be helpful.

  • Beth Bennett

    Thanks for writing on this crucial topic. My son cannot eat any of the food at school, because we follow a GFCF/Feingold diet in our family to support his Asperger Syndrome and ADHD diagnosis. Basically, we are on a whole food and plant-based food diet. Furthermore, it’s my belief that NO child should be forced to eat such “food.” We are condemning our children to early onset diabetes, heart disease, and obesity at great personal and societal cost to us all. Please keep on exposing the truth!

  • Krista Taylor

    Good information! I am new to the elementary school cafeteria scene, and I am fearful for the kids who eat there. How can I find out if my son’s school receives rebates from food companies/distributors? Thanks!

  • Ed Bruske

    Krista, I have no doubt that rebates play a role in your son’s school food. If your school district uses a food service management company under a “cost reimbursable” contract, the company is required to credit all rebates and discounts it receives to the schools. You are entitled to see those invoices and rebate/discount amounts. Likewise, if your school has a “self-operated” food service scheme, they must reveal any rebates they receive. The only exception is if your school district pays a food service management a flat rate for meals. In that case, the company is keeping the rebates and doesn’t have to tell you what they are.

  • Ed Takken

    Great detective work, Ed. No, great, great detective work.

    I was pointed to your article by FAUS, so something under 10000 from that group will be reading it. You might check out their web site at

    Today’s Washington Post article about 10 yr old L.F. trapped in Children’s Hosptial again looks related to me. That story is at:

  • Melinda S.

    Even if the rebates go back to the school district, most parents who try to make improvements in school lunches are talking to school district personnel. Hence, if they are getting the run-around, it may be because the school district is using these rebates. Did you happen to look at whether these rebates to the school district are used to reduce the overall food bill?

    I’m wondering if:
    1. the school district tends to use this as “free money” it can allocate elsewhere
    2. when people try to say “you can use good food for the same amount of money you have allocated here” the school district secretly says “but we don’t actually do it for this–we do it for less because of rebates” or “we actually spend more, but get some back.”

    I don’t like the fact that it’s so hard to get information about it, though–that in itself makes me wonder if there is more to it even than “we’ll give you some money back.”

  • Angela

    Send it to Bill O’Rielly at Fox New, he’ll be all over it, you’ll get all the PR you need!

  • Karen Fredrickson RN

    Great information. I did 10 weeks of clinical hours as a school nurse and began this process in an Oregon School District. I found that the foods purchased from the contracted food service company were bought because the state gave them commodity dollars to spend. The more food they could buy with their commodity dollars (which included the pizza, pancake on a stick, sugary cereals etc, that you had mentioned, the farther the food budget went.

    I tried to get the school district to engage in the Farm to School program because we’re right in the middle of food cornucopia farmland and farmers here were willing to participate, but no go. Unfortunately I didn’t stick with the project long enough to see it through, but what you’ve revealed gives me new zeal and inspiration. I found that if healthier more attractive foods were offered, they would be able to attract more purchases, increasing revenues. It’s a win/win, but it’s difficult to stop that train and turn it around.

    Well done

  • Kimberly Vann

    Well done, well said, keep it up. But if everyone just “smoked” out the school systems by sending in lunch with their children, stating until the district changed, we won’t eat at school….money will drive the denominator.

  • Claudia

    Maybe if we supported education appropriately they wouldn’t need the rebates to make ends meet.

  • Lee

    How do you find out what goes in your local district? Thank you.

  • L

    please correct the spelling of ‘roll’ before you get that ‘major publication’ to pick it up. Then I’ll read further. Jesus.

  • Ed Bruske

    No editors here. Just me. Corrections always appreciated.

  • Ed Bruske

    Short answer: start a conversation with your local food services director.

  • lynn lawton

    This should go directly to Michelle Obama! She is promoting healthy eating for children.

  • Julie

    I am with Kimberly. Make you child’s lunch.

  • Renee

    Rat Bastards!! HOW CAN THEY SLEEP!

  • Foodie

    The issue is not the rebates..a company is free to offer any inticement to use it’s products. The REAL issue if the use of so many processed foods for our children. Cooking wholesome meals is a not hard and as parents, we must demand it for our children. What happened to the days of a full staff of cooks making lunch for students? Remember being a child and smelling the yeast riolls cooking; the spaghetti sauce simmering; the turkey roasting?
    Quit blaming the food companies and start blaming the school district and yourself for allowing this to happen. Become involved and stop turning a blind eye to what goes on when you drop your child off at school.
    I actually work in the food supply industry and see this first hand on a daily basis….in our school district, we made a stand and got this crap out of our lunchrooms.

  • Sandy S.

    We pack our grandson’s lunch every day. He can’t eat a lot of the food served by his school (which is a private school) due to his diagnosis of ADD. He has been on the Feingold Diet and it has made a world of difference…….if only people could understand how bad processed food is for all of us and especially for our children. In a nutrition class given when my husband had open heart surgery, we were told to only shop in the perimeter of the grocery store. That’s where all the “real” food is located and you will be much healthier staying out of the grocery store aisles.
    Thank you for this research. I hope your story gets told all over the country…….I’m sure that some parents don’t have a clue. Thanks again.

  • Jenny

    I work in a school cafeteria. I knew this was going on but not how it really worked. Thank you for the article. I agree that parents are going to be the ones who will make the change. Money talks and packing lunches means money. Unfortunately I wonder how many people have run into what in being tried in our school district. The kids can’t pack their lunch without permission from the superintendent or the principal. The reason— packed lunches are a distraction to the rest of the kids. What a crock. I no longer have children in the school system but would have challenged this if the policy had been in place when they were in school as my kids packed more often than they ate at school. I do just keep talking at work about using fresh foods and real meat. We are using more fresh fruits and veggies. I will just keep on talking to try to get more change. By the way, the reason there is more flavored milk and such is the federal government has stated that fat must be greatly reduced so the way our schools as a whole are doing this is by getting rid of the extra fat like butter for biscuits rather than baking ,not frying, or by just not having chicken nuggets. Nothing like a white flour biscuit with grape -sugar filled but not fruit-jelly but no butter to maybe help slow down the sugar rush. I realize the meal is high fat just look at any processed food but I don’t think the answer is to get rid of the very fat items that are the unprocessed things like butter and whole milk. Get rid of the crap!

  • Ed Bruske

    Jenny, thanks for your insights on this. Regarding fat, the new USDA rules would actually increase the amount of fat allowable from 30 percent of calories to 35 percent of calories. However, there still would be no limits placed on the amount of sugar in school meals, except that what previously were the minimum calories required in meals are now the maximum. Requiring fewer calories and more vegetables, fruits and whole grains theoretically reduces the amount of sugar, or so the theory goes.

  • Laura Leeson

    I have suspected this but your detail is excellent. Thank you for sharing and will send it around to my mom friends who have tried in desperation to get our schools to pay attention. Now I know why they don’t. There is always a reason isn’t there and its usually money. Ahh… yet again the elephant in the room in our shortsighted country. We can’t help ourselves and will just go bankrupt until we decide to wake up.

  • heartsmart

    I know this article is from last year, but I am hoping you are still taking comments/questions. In light of the rebate situation, I know a food service manager who said she would get books from companies for ordering personal items, do you know if this practice still goes on and if it does which companies are involved in that type of thing….I hope I hear back…thanks

  • Ed Bruske

    Don’t know anything about that one, sorry.