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Calorie Labeling on Fast Food Restaurant Menus: The Responsible Next Step? (written March 31, 2010)

If calorie information was posted next to the food item you wanted to order at the drive-thru, would you change your mind? Would you opt for a McDonald’s Premium Salad over a Big Mac? Furthermore, would you think twice before coming to McDonald’s again, now that you know that your favorite indulgence, the Big Mac, contains 540 calories, or a quarter of your total recommended daily caloric intake? And that’s before the French fries.

Included in the sweeping health care reform legislation that was signed into law by President Obama on March 21, 2010 were a number of special provisions not directly related to insurance reform or universal health care access. One of these provisions originated as H.R.1398, the Labeling Education and Nutrition Act or LEAN Act of 2009, introduced by Representative Jim Matheson (D-UT). This bill requires caloric and nutritional information to be included as a part of the food menu for restaurants with more than 20 locations. According to Congressman Matheson , the LEAN Act is “the first step toward providing consumers with key nutritional information they seek while providing chain restaurants with a workable framework to deliver this information to their customers” (Matheson, and Upton).

This legislation comes as no surprise to most large restaurants and food distributors. Nutrition labeling has been a hot issue for decades. In 1994, the Nutrition Labeling and Education Act (NLEA) went into effect, requiring all packaged foods in the U.S. to detail calorie content and other nutritional information directly on the packaging. Chain restaurants, however, were exempted from this legislation at the time, no doubt attributed to a strong lobbying by groups such as the National Restaurant Association (NRA).

This time around, the NRA supported this provision, calling it “a win for consumers and restaurateurs” (Hensley, and Donohue 1). This is interesting to note because the NRA adamantly opposed the health care legislation as a whole. Dawn Sweeney, President of the NRA, stated in a recent press release, “the changes included in the modified version of the bill would severely and negatively impact restaurants by […] imposing onerous administrative burdens on the industry” (Hensley, and Donohue 2). The passage of the LEAN Act provision attached to the health care overhaul will now require action by NRA chain restaurant members such as McDonald’s to post nutritional information in all of its menus, including its drive-thru menus. If the restaurant does not currently have caloric information for one of its foods, it must be determined “by consulting nutrient databases, cookbooks, laboratory analyses, or other sources that provide a reasonable basis for information regarding the nutrient content of a food” under law (Matheson).

Redesigning an entire menu and testing the nutritional content of food on that menu are not cheap undertakings, especially for restaurants with hundreds of locations nationwide. So why would the NRA (and the 945,000 restaurant and foodservice outlets it represents) be in favor of legislation that clearly would create administrative burden and add cost to their operations? The answer was revealed later in the press release: “This legislation will replace a growing patchwork of varying state and local regulations with one consistent national standard that helps consumers make choices that are best for themselves and their families” (Hensley, and Donohue 1). Nutritional labeling is viewed as an unavoidable reality for chain restaurants, especially in light of many states, such as New York and California, having already implemented similar labeling measures under state law. When viewed from the perspective of a company like McDonald’s with multiple locations in all 50 states, clearly there would be a cost reduction achieved if the standards for labeling were consistent under Federal law. To have different rules for each state would not only be administratively and economically costly, but it would also require constant monitoring by associations like the NRA.

In fact, the NRA openly admits that it “co-led an industry-wide coalition that worked proactively with stakeholders to provide an approach that gives consumers one more way to live a healthy lifestyle. The nutrition information provision was publicly supported by industry groups, health and consumer advocacy groups, as well as a bipartisan group of House and Senate members. Enactment of the national standard will negate the need for states and localities from pursuing their own legislation or regulations going forward” (Hensley, and Donohue 1). To have standards that vary across states could ultimately affect a restaurant chain’s decision to remain or expand within certain states that had more stringent labeling rules than others. Variations in the law essentially represent hidden taxes on a corporation that will sooner or later impact their bottom line, clearly providing an incentive for corporations to seek to minimize legislative uncertainty.
From a Corporate Social Responsibility (CSR) perspective, the legislation is a gold mine. This is a classic example of a negative externality (obesity and unhealthy eating habits) perceived to be created and perpetuated by the fast food industry, that the fast food industry can in turn manipulate to its competitive advantage under the guise of CSR. The industry can do this in a number of ways, including advertising the wide range of healthy options it provides, investing in health awareness programs, and getting out in front of the legislation by complying with new laws earlier than mandated. Many restaurant chains have already begun to capitalize on the nutritional labeling legislation. On March 10, 2010, just days before the passage of the LEAN Act language, Panera Bread released a statement that it will voluntarily post calorie information in all of its locations by the end of 2010 (Park). According to Scott Davis, Panera’s Chief Concept Officer, “We are pleased to be the first national concept to provide this level of transparency to customers. It comes from our commitment to providing nutrition information and wholesome foods our customers can trust” (Parrish). This proactive gesture is a reflection of Panera’s involvement and monitoring of current legislation. Other major food chains will likely be following suit in the near future.

McDonald’s has long led the pack in nutrition-based CSR initiatives. In fact, McDonald’s publishes a CSR report once a year in which it highlights the corporation’s efforts around nutrition and well being. The CSR report has an entire section devoted to nutritional labeling, which McDonald’s began implementing in 1973: “Initially, we offered it on in-store trayliners, posters and brochures, then on the internet, and in 2006, on our packaging. Our expansion of alternative ways to provide nutrition information helps customers make informed choices based on facts, not perceptions”, McDonald’s mentions in its latest CSR report, which also specifically mentions the LEAN Act and McDonald’s support and commitment to compliance (McDonald’s Corporate Responsibility).

McDonald’s has great incentive to engage in these nutritional CSR initiatives in an attempt to alter public perceptions of its products. Long seen as the poster child for obesity-causing fast food production, McDonald’s has been singled out in repeated attacks both by journalists and politicians. The documentary “Super Size Me”, released in May 2004, followed filmmaker Morgan Spurlock as he engorged himself with McDonald’s fare three times daily for one month. The imagery in the film was intended to disgust the viewer and bring awareness to the high fat content in fast food. The film’s release was timely; a lawsuit was brought against McDonald’s in 2003 on behalf of two overweight teens who alleged they became obese as a result of eating McDonald’s (“Fox News”). Just two months before the film’s release, McDonald’s announced it was eliminating the super sizing option from its menus. "The driving force here was menu simplification," said McDonald’s spokesman Walt Riker. "The fact of the matter is not very many Super Size fries are sold” (“MSN Money”). “Super Size Me” was subsequently nominated for an Academy Award.

Rising obesity rates certainly are raising many questions about responsibility. Are corporations acting irresponsibly by feeding people fatty food, or should people control their own eating habits? The LEAN Act serves to shift additional responsibility to restaurant chains, which is in line with increasing CSR initiatives by these same restaurant chains. So how did this topic rise to the attention of Congress and gain enough backing for passage? For one, the NRA, who as previously mentioned was pushing for a national nutrition labeling standard. Other coalitions include the Centers for Science in the Public Interest (CSPI), a consumer advocacy group primarily funded by subscriber dues to its public health magazine, “Nutrition Action Healthletter”, and the Coalition for Responsible Nutrition Information (CRNI), an assembly of restaurants, chain food service establishments, retailer associations, the Grocery Manufacturers Association and restaurant associations. All of the previously mentioned organizations have been heavily lobbying Congress and raising money for public advertising on the subject of nutritional labeling since the early 1970’s. Coincidentally, McDonald’s began implementing nutritional labeling on its own accord in 1973 (McDonald’s Corporate Responsibility). This demonstrates the decades-long alliances between corporations and their lobbyists on Capitol Hill.

Not surprisingly, research on the topic has been mixed at best. Independent researchers have found no correlation between calorie counts posted on menus and changes in consumer spending on high-calorie fast food. Another study, conducted by government officials, found the legislation had a positive impact (Rabin). The latter story was cited in the “Dear Colleage” letter from Representative Matheson, requesting additional congressional support for his nutritional labeling legislation. It seems only time will tell of the effects of posting calorie information at restaurants, but one thing is certain: McDonald’s still wants your business, and will continue to counteract the changing regulatory environment by implementing CSR initiatives that appeal to both its customer base and regulators alike.



Citations
"Fat Teens Sue McDonald's." Fox News 09 21 2002: n. pag. Web. 27 Mar 2010. .
Hensley, Sue, and Mike Donohue 1. "National Restaurant Association Says Nutrition Information Provision Is Win for Consumers and Restaurants." NRA Press Releases 03 22 2010: n. pag. Web. 27 Mar 2010. .
Hensley, Sue, and Mike Donohue 2. " National Restaurant Association Outlines Concerns With Passage of Health Care Bill In U.S. House." NRA Press Releases 03 21 2010: n. pag. Web. 27 Mar 2010. < id="1909">.
Matheson, Jim, and Fred Upton. "Congressional Cosponsor Request: HR 1398." (2010): Print.
Matheson, Jim. "To amend the Federal Food, Drug, and Cosmetic Act with respect to nutrition labeling of food offered for sale in food service establishments.." www.govit.com. Govit, n.d. Web. 25 Mar 2010. .
"McDonald's says goodbye to Super Size." MSN Money 03 03 2004: n. pag. Web. 27 Mar 2010. <>.
Park, Madison. “Health care reform also touches tanning beds, restaurant menus.” CNN 03 24 2010: n. pag. Web, 25 Mar 2010. “.
Parrish, Linn. "Panera Bread® First National Restaurant Concept." Panera Bread Press Release 03 10 2010: n. pag. Web. 27 Mar 2010. .
Rabin, Roni Caryn. "How Posted Calories Affect Food Orders." New York Times 11 02 2009: n. pag. Web. 27 Mar 2010. .
"Values in Practice Report." McDonald's Corporate Responsibility. McDonald's Corporation, 12 2009. Web. 27 Mar 2010. .

posted by Ashley @ 9:20 AM