Monday, September 08, 2008

Labeling Calories in Restaurant Menus

In January New York became the first American city to pass a law requiring restaurant chains to state the number of calories in everything on their menus, right down to the last pretzel. Full enforcement of the new rules began last month. Other cities and counties have since followed. Los Angeles is expected to vote on its own law within the next two weeks. California, meanwhile, is considering a statewide bill.

It is too soon to say whether menu labelling will reduce sales or prompt diners to order something different. One study, published this year, found that customers ordered foods containing an average of 52 fewer calories when the information was prominently displayed in fast-food chains in New York.
I think this is a good idea. Let customers know how healthy the food is they are eating and allow them to adjust their diets accordingly.
America’s restaurant industry, which is expected to have $558 billion in sales this year, has vigorously fought menu-labelling legislation. Some restaurants, already concerned about the slowing economy, worry they could lose customers if they draw attention to the number of calories in their food. Already, many New Yorkers have been disheartened to learn what their favourite dishes contain. Marion Nestle, professor of nutrition at New York University and the author of “Food Politics”, says frequent restaurant-goers have found the calorie information “just astonishing”.
I have never understood this tactic. Basically they are saying that if customers knew the truth about the food they were eating that they would no longer eat it. So, they fight for the ability to legally deceive their customers.

Of course, smart companies realize that people are still going to eat out and if they adjust their menus they can actually get more customers when the truth about calories comes out.
Yet the new rules could also enable restaurants to attract customers, and reduce costs, by tweaking their menus. Many companies have already started to introduce new low-calorie items and serve smaller helpings. Starbucks, for example, has changed its “default” milk from whole milk to reduced-fat milk, cutting the calories in its drinks by 14%. (Reduced-fat milk also happens to be cheaper.) Dunkin’ Donuts has a new lower-calorie line called “DD Smart” that is designed to appeal to the health-conscious with such things as egg-white flatbreads and fruit smoothies. And McDonald’s has reduced the size of a helping of French fries, cutting the number of calories—and costs.

Le Pain Quotidien, a mid-range bakery chain with $165m in worldwide sales and 17 outlets in New York, thinks it has profited by adapting quickly to the new rules. Jack Moran, the company’s vice-president of branding, initially thought it was “frightening” that customers would be able to see the calories in everything on the menu. So he put together a team to overhaul the menu, cutting portions and eliminating items with lots of calories. This has proved, he says, a “strategic advantage” and boosted business. The company is now planning to provide calorie information voluntarily in Washington, DC, and Los Angeles—even though the local laws do not yet require it.
via The Economist


Audacious Epigone said...

This is the kind of government mandate of private industry that I favor. People with high time preference and modest intelligence are probably less likely to seek out nutritional information of their own accord (or make an informed estimation of it when consuming, for that matter)--spelling out the consequences right in front of their noses means they're more likely to take notice, and thus respond more healthily than they otherwise would. This is a win both for the individual and society at large.

Fat Knowledge said...

I agree with you. I would go a step further and say the 10% of the population that is likely to actually look at these numbers will influence the other 90% that don't.

I also like having the gov't do things like set the default savings rate on a 401k. If a person wants to override it they can, but if not then the default is to have people save for retirement rather than having to elect to do so.

I also like using tax policy to give people greater incentives to reduce consumption of items like cigarettes, alcohol, and gasoline. Instead of setting mandates or outlawing goods, use pigovian taxes to reduce demand.

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