In October of this year, the Ministry of Social Affairs implemented a groundbreaking nationwide shift from conventional food aid distribution to a more flexible food card system. Formerly, individuals received pre-packaged food parcels predominantly containing dry goods and canned items. Now, recipients in need have the autonomy to curate their own food baskets, tailoring their selections based on the allocated support.
The shift from dry food to food cards had been in the planning stages for years. However, the major impediment had been the lack of interest from potential partners, primarily due to concerns about the cost-effectiveness of the proposed system. Additionally, navigating the bureaucratic hurdles associated with European funds was deemed impractical.
In the pursuit of transitioning to the new system, extensive preparations were made over the year. This involved interviews with food aid recipients, distributors, store representatives, and municipal social workers. Best practices from countries with successful food card pilot projects were examined, and a comprehensive evaluation of costs between the old and potentially new systems took place.
Technological developments in the database were initiated to establish a paperless system, minimizing the scope for human errors. Based on data analysis, the working group systematically sought the optimal solution to address the challenges.
The initial brainstorming sessions involved roundtable discussions with store representatives to meticulously evaluate the advantages and disadvantages of the prospective system. The assessments and analyses underscored that transitioning to the new system was the unequivocal solution. However, a notable drawback surfaced due to Estonia's relatively small size, which limited the presence of major retail chains reaching every municipality.
Packed food-aid was the past.
To ensure a robust participation in the procurement process, including combined offerings, the organizers invited retailers to participate through the Estonian Traders Association.
In the pre-transition period, the Ministry of Social Affairs organized the distribution of nationally procured food aid in the form of food packages, provided four times a year to those in need. The ministry conducted public procurements to identify a partner company engaged in wholesale for acquiring food items.
During the preparations for public procurements, a representatives of the Ministry of Social Affairs collaborated with the The National Institute for Health Development of Estonia (TAI) to select the food items for inclusion in aid packages for those in need. A key criterion was to choose items with a shelf life of at least six months. Subsequently, the partner company could explore potential products from around the world. The procurement process encountered difficulties several times, such as interruptions in deliveries during times of war. Replacing a specific item listed in the procurement with another required a cumbersome and time-consuming procedure, given the significant increase in food prices.
At the start of each quarter, when the number of those in need in a specific local municipality was determined, an extensive coordination process commenced between the supplier and all food banks. Orders were always placed with some overestimation to account for potential breakage of food packaging during transportation and loading. Once the order sizes were finalized, the procurement partner, Toidupank, distributed the food to local food banks or municipal offices throughout Estonia – a total of over forty locations.
The labor-intensive process of assembling food packages then began, often carried out by social workers in addition to their regular duties. Most food banks faced space constraints during the distribution period, and some had to rent additional space for assembling and storing food packages. Finding a sufficient number of volunteers to help assemble and distribute food packages posed a challenge for many food banks. Long queues also formed in some places during the distribution of packages.
In larger cities, food packages were distributed to people based on lists that included the date and time for picking up their packages. However, some in need did not show up at the agreed-upon times, necessitating multiple reminders from social workers to collect their packages. Additionally, some recipients refused the provided food packages because they received the same items regardless of allergies or food intolerances.
There were also instances where large families received so many food bags at once that they had to find ways to fit them into their often cramped living spaces. Transporting the food bags for all family members was also inconvenient, especially for those without the option of using a car, who had to bring their heavy food bags home using public transportation. Standing in line to receive a food package was not pleasant in the summer heat or winter snow.
If those in need were unable to pick up their package due to health conditions or lack of transportation, social workers delivered the packages to them. This additional task for social workers left them with less time for their daily responsibilities.
The magnitude of administrative costs was contingent on the quantity of purchased food. A fixed percentage of the food order's price was paid to the supplier, plus a certain percentage to Toidupank for covering warehouse and labor costs. Consequently, as the number of recipients increased, so did the administrative costs for distributing food packages. For example, administrative costs for maintaining the system accounted for about €200,000 out of a €2.5 million budget in 2022, or 7-8% of the total allocated funds for purchased food aid.
Transition to freedom of choice
In the first announcement of the procurement, the Ministry of Social Affairs divided the process into four regions where offers could be made. However, only one offer was received for the initial procurement, covering only one region, Harju and Rapla County, covering only half of the food aid recipients.
For the remaining three regions, a new procurement was organized for food cards. This time, the three remaining regions were combined into one, with a comparable number of recipients as in Harju and Rapla County. Two bidders participated in this procurement. A contract was signed with the winning bidder, and for the first time, food aid was distributed with food cards nationwide in October 2023.
During the period preceding the transition, meetings were held with the social departments of all municipalities during visits to the counties. Concerns were listened to, solutions were discussed, and a new system was worked out.
The feedback from the first pilot project was positive, and minimal changes were introduced. The Ministry of Social Affairs aimed to create a user-friendly system that would alleviate the heavy workload of social workers and provide a more dignified solution for recipients.
However, the use of the food card gives recipients the freedom to choose their preferred food items and essential goods. Making purchases with the food card is extremely simple, convenient, and discreet. With the food card, individuals can buy an optimal amount of food and therefore reducing food waste.
Initial statistics showed that social workers in municipalities had effectively explained the food card system to recipients: they were well aware of how to maximize their purchases with the food card. Many purchased lower-priced products, monitored promotions, and visited stores when products with the same date could be obtained at a greater discount. Social workers played a crucial role in implementing the new system.
One positive aspect is the technological integration; if the purchase amount exceeds the remaining balance on the food card, individuals can easily pay the additional amount with a credit card or cash. The card balance can be seen on the receipt, at self-service checkouts, and can be requested from store personnel or by calling the information hotline. As the card's usage period approaches its end and there is still a balance on the card, Rimi sends a reminder via SMS to the recipient that it is time to make their final purchases.
The current statistics on the use of food cards show that a significant amount is spent on fresh fruits and vegetables, fish, meat, and dairy products – items not included in previous food packages. A major advantage is the precise statistics on product categories. The Ministry of Social Affairs has a clear overview of the quantities and types of food items purchased, the recipient groups, and submits a corresponding report to the European Commission.
The system has received positive feedback from both municipal social workers and beneficiaries, who have embraced the food card system. However, a concern has naturally arisen that the winning bidder does not have stores in every small municipality. Nevertheless, they operate 82 stores nationwide, allowing food cardholders to make purchases in any store regardless of their location. In collaboration with local governments, solutions have been devised for individuals unable to go to the store themselves.
While there were some initial challenges with address accuracy and informing people during the system's launch, these issues have been resolved. The distribution of food cards is now functioning smoothly. Even those for whom going to the store is difficult can order food home through a courier independently, with the help of relatives/friends, or with the assistance of social workers.
The monthly fixed costs associated with the food card do not depend on the number of beneficiaries or the financial volume of food aid. Under the new system, a monthly fee is paid to the procurement partner, and a one-time card fee is paid for the issued cards. Since the percentage of repeat beneficiaries is approximately 70%-80%, and the food card is reusable, introducing new major costs to the state with card replacements reduces administrative costs from the previous nearly eight percent to 3-5% of the total allocated amount for food aid.
Of course, a full comparison between the two systems cannot be made until the beginning of 2025 because 2024 is the first full year using the food card exclusively for distributing purchased food aid.
The nationwide food card system is a pioneering solution in Europe, unprecedented in its extensive implementation. It serves as a model for other countries on how to flexibly and dignifiedly assist the most vulnerable members of society. Lithuania is currently launching the food card system, and it is partially operational in Romania, Spain, and others. The individuals who created the food card system in Estonia are also providing training to interested colleagues across Europe.
The distribution of food aid is co-financed from the European Union's ESF+ funds.
Last updated: 10.07.2025
