The Bloomberg Precedent

Outside City Hall in New York, Dominic Inferrera protests the soda ban that Mayor Michael Bloomberg introduced. Andrew Burton / Reuters

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Blimpie, CKE, White Castle, Legal, Consumer Trends, Ingredients & Dayparts

Operators outside New York City should take note. Mayor Bloomberg’s past food regulations have had a major effect beyond the Big Apple. The trans fat regulation, which limited artificial trans fats in foods to 0.5 grams per serving, encouraged chains like McDonald’s to change their recipes systemwide. Other cities—including Philadelphia, San Francisco, and Chicago—have since explored their own trans fat regulations.

And New York’s menu-labeling law, which Bloomberg introduced in 2008 and required city restaurants to post calorie counts, was the impetus for the national menu-labeling mandate that passed with the Patient Protection and Affordable Care Act in 2010.

There is reason to believe Bloomberg’s previous regulations were steps in the right direction. According to research published in Annals of Internal Medicine last year, trans fat counts in New York lunches dropped an average 2.4 grams after the restriction; the counts dropped an average 3.8 grams at hamburger chains. And many brands, including McDonald’s, are taking steps to roll out menuboards with calorie counts well before they’re required to by law.

DeFife says a few other municipalities, including Washington, D.C., and Cambridge, Massachusetts, have initiated conversations on their own sugary-beverage bans. But he thinks the ban is far too much of a stretch to take hold nationally, which could be good news for the $200 billion-plus quick-service industry.

“I would say our beverage sales are 5–10 percent of our overall sales, so if we lose a portion of that, if the quick-serve industry loses a portion of that—and it’s a high-profit item to begin with—that’s taking a big chunk off the bottom line,” Blimpie’s Conlin says. “Those customers who want that 32-ounce soda, they’re going to get it somewhere.”

The new reality

Though the sugary-beverage ban is set to take effect in March, a group of organizations, including the NRA and the American Beverage Association, filed a 61-page lawsuit in October with the New York State Supreme Court in Manhattan challenging the validity of the regulation.

“Our intention in participating in the lawsuit is we think the regulation that is being imposed on restaurants in the city oversteps the bounds of regulatory authority into policy making that should be done by a policy-making body, not a regulatory body,” DeFife says. “And there is a disconnect between what they’re actually doing in the regulation and the purposes of the regulation. We want the court to clarify whether that has a base.”

DeFife adds that New York–area operators should be discussing cup changes with their suppliers, in case the lawsuit fails to prevent the ban from going into effect.

Joe Hainthaler, government affairs specialist for Auntie Anne’s, says that if the ban takes effect as planned, city officials should follow up with its success to determine whether or not food regulation like this has an impact on obesity.

“We would encourage [New York’s] Department of Health and Mental Hygiene and the mayor’s office to track whether obesity declines and to what extent this ban is responsible for that decline,” Hainthaler says. “That would provide a solid statistical basis for whether a ban like this works. That should be the basis for deciding whether to expand this sort of thing elsewhere. The facts matter.”

Until a statistical basis can be established, however, operators in New York and across the country are left with a new reality in which regulation has become a weapon against a national consumption crisis, much like it did with tobacco.

The industry is not, however, defenseless against regulatory bodies. All experts interviewed for this story confirm that quick serves should be in contact with their local and state legislators, as well as with groups like the NRA, to voice their opinion and spark regulatory discussions.

Richardson says a dialogue between government and industry can help create a “range of solutions that can actually make a difference,” and that the lack of dialogue was the primary failure of Bloomberg’s sugary-beverage ban. He believes the industry needs to speak up on the issues that are important not just to business, but also to customers.

“I think it’s important that all of us work together to find the best solutions, because we want to have a healthy and energetic citizenry,” he says. “How do we continue to have not only healthy minds, but healthy bodies? I think the restaurant industry absolutely needs and wants to be part of that dialogue. And there are so many in our industry who are doing just that by offering different choices, that are offering better menus, and that are working with different fitness programs in ways to promote what I would call a healthy and energetic lifestyle.

“What that recognizes is food is the fuel that allows us to be,” Richardson continues. “We’ve seen the increase in obesity, but to overregulate food and overregulate people’s lives doesn’t seem to be a solution that leads to positive results.”