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The Promise of Menu Labeling

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I think you can raise rather a lot of money from things like soda taxes. But I don't think you'll do much to change eating habits that way. Menu labeling, however, is much more interesting. The reason is not, as some think, that individuals will make radically different decisions because they can see calorie content when ordering a burger (they might make slightly different decisions, but the evidence, as of yet, is mixed). It's that restaurants might make different choices when individuals can see the caloric content of their meals.

Restaurants know that consumers have no effective way of comparing the caloric content of meals. Diners know, of course, that a burger is worse for you than a banana. But eggs cooked in a vat of butter look like eggs cooked in very little butter. A salad with a dressing that adds 600 calories looks like a salad with a dressing that adds 300 calories. People return to restaurants for taste and price and ambiance, because that's what they can measure. So restaurants jack up the caloric content pretty heedlessly.

If menu labeling is passed, however, and consumers exhibit any preference toward relatively less fattening items, that creates an incentive to reformulate those items to be less fattening. California, which recently passed a labeling law for restaurants with more than 20 locations, is seeing this happen. The Macaroni Grill, for instance, just cut its scallop and spinach salad from an astonishing 1,270 calories -- do they grow the spinach in butter? -- to 390 calories. Denny's has slimmed down its Grand Slam breakfast. And the law hasn't even gone into effect yet.

But this is exactly the response we'd expect. The Macaroni Grill's example is a good one. Ordering the spinach and scallop salad is the sort of thing that you'd do if you were watching your calories. But since you didn't actually know how many calories were in the dish, the Macaroni Grill could make it delicious and filling and fatty and you really weren't any the wiser. That made the Macaroni Grill more attractive to healthy eaters even as it was actually tricking them. Now customers will know the caloric content, and so the Macroni Grill reformulated the dish so it's more in line with diner preferences.

Menu labeling, in other words, has the potential to not only change what diners choose, but what they're offered. And that could be where its true promise lies.

Photo credit: Ed Ou -- Associated Press Photo .

By Ezra Klein  |  July 27, 2009; 1:35 PM ET
Categories:  Food  
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Comments

how about a poached egg vs a fried egg? That may be a better comparison (unless the egg fried in a vat of butter is served with the vat of butter)

Posted by: bdballard | July 27, 2009 1:40 PM | Report abuse

speaking of eggs, here's the start of a great article from the New Yorker on the egg men of Vegas

http://www.newyorker.com/archive/2005/09/05/050905fa_fact_bilger

Posted by: bdballard | July 27, 2009 1:42 PM | Report abuse

I'm awfully anti-regulation but I don't have a problem with this, particularly when it comes to chains. More information for the consumer is a plus. I do sort of wonder how much in practice the listed caloric intake would match the actual product delivered- just that when you are talking about cooked to order food I'd think the variations would be pretty large. Thats why I think it makes more sense for mass produced food in grocery stores but I don't have a problem with it in this scenario.

Posted by: spotatl | July 27, 2009 1:47 PM | Report abuse

This just seems like a no-brainer. Instead of big-gov regulation, a nudge to some interested consumers to eat a little better. The aggregated public health benefits far outweigh the minimal cost.

I know I change my behavior at the fast food restaurants I choose to eat at in response to that place-mat menu thing, either by choosing the less heart-attack-inducing option, or by running a couple more minutes on the treadmill later.... it just seems like Economics 101: when consumers have less information than producers, transactions sometimes don't adequately reflect customer preferences and reduce a product's utility.

Posted by: Chris_ | July 27, 2009 1:57 PM | Report abuse

Words on the menu or even a picture don't signal the brain about calorie content very well. It is hard to count calories without a calorie count book and package labels or menu calorie cues.

So the brain fights with itself: fat tastes good (and is easily imagined up front), while the rational calorie-aware side goes without data. Guess which wins.

I'd lower the site count below 20 to something like 5 (if they serve the same menus). I'd also require a 'chef's estimate' in place of actual count in other venues.

Posted by: JimPortlandOR | July 27, 2009 2:11 PM | Report abuse

i remember back when nyc passed the calorie-posting law, someone at the freakonomics blog made the point that, say, starbucks could halve the portion size of a (currently) 650 calorie brownie, make it 325 calories, and only drop the price by a third. that way, they'd make out like a bandit and be more economically efficient.

Posted by: rmbjspd | July 27, 2009 2:37 PM | Report abuse

When I go to a restaurant, I want the restaurant to use lots of butter. Massive quantities. The more the better. I want butter to ooze from my pores. I'm going there to get a good meal, not to make myself healthier.

Posted by: ostap666 | July 27, 2009 2:40 PM | Report abuse

I guarantee you the new scallop and spinach salad fails.

Posted by: tomtildrum | July 27, 2009 2:45 PM | Report abuse

EZRA, I HAVE QUESTIONS!

I'm very skeptical of menu labeling, I think simply because I can't comprehend how it would actually work.

For instance, I like to go to a local pub for a bi-weekly lunch. Depending on who is cooking that day, the scramble I get might either be cooked in a) four pounds of butter or b) no butter at all. Yet, it's the same item on the menu. Also, occasionally, once of the owners will be cooking, and she likes to do something special with the menu items, playing to the tastes of friendly, familiar patrons.

What happens to places like this? I can't imagine them being able to conform to any kind of menu labeling law. The same item might vary anywhere from 300 to 1000 calories depending on the ingredients on hand, special flair, and who is on the grill.

Are these places destined to go out of business if they can't conform to the menu laws? Are we saying that consistency in menus is required? Won't this kill half the small town diners and mom & pop restaurants that a lot of us dearly love?

Posted by: twweaver7777 | July 27, 2009 4:36 PM | Report abuse

Applebee's is facing a class action lawsuit because it posted calorie counts for it's "diet" menu and Scripps News hired a food lab to test the food. In some cases they found double the calories and fat than what was listed.

It sounds like a good idea to have menu labeling, but we have to be able to trust what they tell us. Somehow there needs to be independent verification.

Posted by: atlliberal | July 27, 2009 4:39 PM | Report abuse

Well the marginal cost of the food is a small fraction of the menu price, so for the prices they charge, it makes sense to serve triple the healthy portion. And everyone's been doing it so long that you'd feel cheated if the restaurant gave you just a healthy portion.

So maybe posting the calories will help people get over that feeling.

Posted by: Aatos | July 27, 2009 8:17 PM | Report abuse

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