Well, the nearest system I can compare it to is the Belgian food stamps - these aren't part of poverty aid, they're a part of wages - a compensation for the meals you eat at work or on the road.
Anyway, it's in some ways very different (it's paid by the employer and partially the employee, rather than the government), but it's also fairly similar, in that I just have a credit-card-type thing which I can use to buy food stuffs, and only food stuffs.
This type of checues, or stamps, or vignettes, or coupons, or whatever, needs to be restricted in what it can be used for. Otherwise, it's just alternative (and probably easier to forge) money.
Now, in Belgium, it's perfectly OK to buy cooked or heated food. It used to be pretty generally accepted that supermarkets would let you pay your whole cart with them as long as most of it was food - nobody cared if you bought a roll of toilet paper with it, but you wouldn't be able to buy a fridge. These days it's more strict, because, well, automated systems - the register simply says how much it'll accept.
Yes, cooked vs non-cooked seems a rather silly line to draw - it reminds me of how most bars in Belgium will happily offer you a burger or a spaghetti, but won't have fries or similar - any meal with potato in it is considered a meal and thus you need to be a restaurant (and comply with all the inherent rules), while something like a burger (or a pizza!) is a "snack" and thus, can be sold in a bistro or a bar. Clear and obvious lines are easier to draw and make your law more robust.
I mean, let's be clear: for my part they could do away with food stamps and simply give people who need it monetary assistance. Wellfare, sustenance assistance, living wages (which is what the minimums are called over here, I know the term means something else in English), whatever. but that's Dirty Red Communism according to 50% of Americans, so, eh.