Executive Summary

Menu labeling is an informational snapshot of the nutritional content of food, and it is becoming a requirement by the government to inform consumers of the nutritional contents so they will make an informed choice before purchasing. Sen. Tom Harkin (D-Iowa) and Rep. Rosa DeLauro (D-Conn.) have proposed a bill called Menu Education and Labeling Act (MEAL Act).  They are a part of the many government and non government agencies that believe that consumers would make healthier choices if they knew what was in the foods they purchased.  For example, The Center for Science in the Public Interest (CSPI) is advocating that if companies are required to provide information on fuel-efficiency of cars and energy and water consumption of home appliances, then restaurants should provide the nutritional value of their meals.  In fact, some states have already implemented their version of the legislation and are mandating restaurants to post the nutritional value on the menu boards. The National Restaurant Association (NRA) has shown interesting in supporting the legislation, but they would like to see the bill passed on a national level instead of by each individual municipality.  The NRA has shown support for a bill called the Labeling Education and Nutrition Act of 2008 (LEAN Act).  Their hope is that it would nationally standardize menu labeling for foodservice establishments of 20 units or more.  

Introduction

In this case study, I will discuss the menu labeling policy, and its effects on the restaurant industry.  There are many facets to the restaurant industry so I have narrowed  it down to one advocate who will be the representative for this case study; the National Restaurant Association (NRA).

The restaurant industry is under fire by the government to post nutritional data of its food items on its menu boards and menus.  One senator and a representative have introduced a bill that would help consumers make better choices.  To advocate this bill is the Center of Science in the Public Interest (CSPI).  Then there is the NRA that has created its own version of the bill.

The topic to be discussed are the operation of the NRA; the social implications of the menu labeling policy; the impact on service quality; the impact of the menu labeling policy on competition, productivity, and global operations; and alternatives to address specific problems related to the menu labeling policy.

The Operation of the National Restaurant Association (NRA)

The National Restaurant Association (NRA) represents more than 380,000 member restaurants establishments.  It provides value to its members by advocating and representing them in the political arena; providing strategic tools and solutions to improve their business; does research and gains insight on the latest trends; encourages networking amongst members so they can learn from each other; and believes in responsible stewardship by guiding their members to be leaders in their communities.  In addition to restaurant memberships, other organizations are accepted into the NRA organizations.  It accepts students and faculty members in the education field, non-profit organizations, international establishments, and affiliated organizations such as distributors, suppliers, and consultants.

The NRA has conducted its own research and has found that Americans are seeking to eat healthfully when dining out (National Restaurant Association, 2009).  So, many chain restaurants have voluntarily posted nutrition data on their menu boards.  However, state and local policymakers have implemented their own version of the menu labeling law (National Restaurant Association, 2009).  Since the local governments have passed their version of the law, the NRA has proposed a bill called the Labeling Education and Nutrition Act of 2008 (LEAN Act).  It is a single criterion for nutrition information disclosure (Dvorak, 2009).

On the other hand, there are opposing critics in the NRA that are mounting an aggressive campaign urging the defeat of the proposal

The Need for Government or Industry Regulations

Sen. Tom Harkin (D- Iowa) and Rep. Rosa DeLauro (D-Conn.) introduced a bill that would amend the Federal Food, Drug, and Cosmetic Act to extend the food labeling requirements of the Nutrition Labeling and Education Act of 1990 to enable customers to make informed choices about the nutritional content of standard menu items in large chain restaurants (Center for Science in the Public Interest, 1971).  Then Senators Tom Carper (D-Delaware) and Lisa Murkowski (R-Alaska) introduced a federal menu labeling bill called the Labeling Education and Nutrition Act (LEAN Act) which would require chains with more than 20 units to post calorie counts for all menu items (Chancey, 2008).

More and more cities, counties, and states are passing differing laws mandating that chain restaurants put calories and other nutrition information on menus. The result is a growing patchwork of regulation that is not helpful to the consumer and is harmful to restaurateurs (National Restaurant Association, 2009). The Coalition for Responsible Nutrition Information (CRNI) is pursuing an effort to implement a federal standard for menu labeling requirements before more states and localities implement legislation that set a variety of different requirements (Coalition for Responsible Nutrition Information, 2009). 

The Lean Act and the Meal Act are two of the policies that are being used as guides for menu labeling. 

LEAN Act: (Chancey, 2008)

• Requires restaurants and other foodservice establishments that serve prepared foods and have 20 or more locations to disclose in writing calories contained in each menu item directly on the menu, menu board or in designated alternative ways, such as a menu insert or a sign directly next to the menu board.
• Provides for uniform nutritional disclosure practices for affected establishments and resolves problems emerging from a complex patchwork of inconsistent state and local regulations.
• Requires the presentation of the calories and the nutritional information through a range of options. Calorie disclosure is required by one of the following means:

• For quick-service restaurants: menu board, wall sign, queue sign
• For seated dining: menu, menu insert, menu appendix

Requires establishments to provide consumers with information on the same nutrients currently provided on labels of packaged goods, which include:

• Calories, total fat, cholesterol, total carbohydrates, dietary fiber, calories from fat, saturated fat, sodium, sugars and protein

The MEAL Act: (Dvorak, 2009)

• Requires that menus must include the following information adjacent to the listed food item: calories, saturated fat + trans fat, sodium, % daily value
• For menu boards, calories must be listed adjacent to the food item and the other three pieces of information must be available in writing.
• The bill preempts state and local requirements that are in conflict with the federal legislation, but expressly authorizes state and local entities to impose further requirements, i.e., the bill sets a floor for providing this information.
• Requires a sign with calories listed for vending machines

As of June 10, 2009, the U.S. Senate agreed to a uniform national nutrition standard to provide

more information to consumers across the country when they dine out at restaurants (Coalition for Responsible Nutrition Information, 2009).

The Social Implications of Menu Labeling

Menu labeling is another method for society to make informed choices.  It is statistically shown that Americans spend nearly half of their food budget either eating out or purchasing food prepared away from home (Center for Science in the Public Interest, 1971).  Many advocates and government officials believe that making nutrition data available to consumers, it will encourage the people to make healthier choices and help with managing their weight (Dvorak, 2009).   Also, they believe that providing this information would help with addressing the obesity epidemic.  One King County official stated that measures promote citizens’ safety and have overwhelming support from local residents (Romeo, 2007).   On the other hand, the restaurant industry officials believe that menu labeling will not affect how consumers will choose their food items.    One opposing critic, Steven Anderson, states, “Unfortunately, we are becoming a nation of couch potatoes, and the solution to this serious and complex issue lies not in litigation but in nutritional and physical education (Anderson, 2004).  As of September 29, 2008, Dawn Sweeney, the current president and CEO of the NRA believes that  the legislation empowers consumers to make the best food choices for themselves and calls it a "positive step" for restaurants and consumers (Chancey, 2008).

The Impact of Menu Labeling on Service Quality

Consumers expect high-quality service regardless if it is a quick-service establishment or a full-service restaurant.  But, if the legislation is passed for restaurants to display the nutrition value of food items, many of the establishments would be more concerned about legal ramifications.  It requires restaurateurs to expose themselves to possible lawsuits that would have detrimental effects on the high quality of service the consumer would expect to receive because there is a discrepancy in the caloric value of a food item.    Restaurateurs should not have to fear a lawsuit because of unavoidable variances found in restaurant foods (National Restaurant Association, 2009).  New processes do not happen overnight, so holding the restaurant industry liable for the choices the consumer makes is unrealistic.  To continue to provide high-quality service to consumers, menus have to be reviewed and revised to meet requirements and that takes time and patients. 

The Financial Impacts of Menu Labeling on the Restaurant Industry

Even though, the NRA is showing support for the LEAN Act, it is considering whether to fight the nutritional disclosure rule or wait for the litigations results pending in the Seattle and New York City courts (Jennings, Industry keeps close watch over menu-labeling battles, 2007).  The argument by the New York Restaurant Chapter is that it would be costly for independent restaurateurs to adopted the new menu labeling regulation especially if scientific analysis of the ingredients is required (Elan, 2007)  It is estimated that the scientific analysis could range from $300 to $1,500 per item (Elan, 2007).  We need the right outcome because the rule is so burdensome to the industry and there is no benefit to the public (Elan, 2007).  For King County, the estimated cost to remake the menu boards and menus would range from $50 to $100 per store or $5,000 to $10,000 for entire chain (Romeo, 2007).  But restaurateurs argue that the estimated cost is highly understated.

The Impact of Menu Labeling on Competition and Production

Menu labeling (in the most peculiar way) will impact competition by creating a discriminatory demarcation that could raise more litigation concerns amongst food service operators (Jennings, Industry keeps close watch over menu-labeling battles, 2007).  According to the LEAN Act of 2009, the act requires chain restaurants of 20 units or more to display nutrition data on their menu boards and in their menus.  However, chain restaurants that do not meet the unit requirements do not have to display the nutrition data on their menu boards or menus. For instance, quick-service restaurants can post only the numbers of calories for each item on the menu boards while full-service restaurants will be required to post calories, saturated fats, trans fats, and sodium levels of all items on the menu (Jennings, Industry keeps close watch over menu-labeling battles, 2007).

Alternatives to Address Specific Problems Related to Menu Labeling

There are alternatives that can address how nutrition data is delivered to the consumer.  The menu labeling process is tedious and will bring on unnecessary costs to the restaurant industry.  Restaurateurs should be able to use simple, inexpensive means to determine nutrition data (National Restaurant Association, 2009).  Some chain restaurants, voluntarily, have place nutrition data on their web sites to educate their customers (Jennings, Industry keeps close watch over menu-labeling battles, 2007).  Others have set up electronic kiosks in their dining areas so consumers can read as little or as much as they want on the nutritional value of their meal.  Then there are still other alternative methods that can be employed by the restaurant industry such as wall posters, brochures, table-top card displays, and fact sheets.

Conclusion

The government has stepped in again and has mandated another “Citizens don’t know how to take care of themselves” rule in the guise of Menu Education and Labeling (MEAL) Act.  They are expecting restaurants to post the nutrition data of the foods they sell in their establishments on the menu boards and menus.  What is next…..calorie counters and weight scales sitting on the counters?  When will they realize that the age-old adage of “Free Will” is not only in religious movies?  What happened to being responsible for your actions?  I have always heard that history repeats itself, but prohibition of fatty food?  Should I be concerned about going to jail for ordering a Whopper…..heavy all?

Food is a basic substance that is needed and should not be regulated by the government nor compared to smoking, cars, or alcohol because all those items are either man-made or chemically altered or both.  As Homo sapiens, we are required to eat food to survive, regardless of how it is presented to us.  We are still at the top of the evolutionary ladder and are very capable of deciding on how much we eat, what we eat, and where we eat.