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Consumers looking over menuboards at their favorite quick-serve restaurants are going to notice some changes in 2015, as the calorie-labeling mandate that was created in 2010 as part of the Patient Protection and Affordable Care Act was finalized by the U.S. Food and Drug Administration (FDA) in November. The rule requires all chain restaurants with more than 20 units to add calorie counts to menus by the end of this year.
Proponents of the rule believe that displaying calorie information on restaurant menus will help consumers make informed healthy choices for themselves and their families. But many quick-service operators are struggling to come to terms with the rule because of the pressures it applies to the operation, specifically how to share the information while optimizing the menuboard.
Jeff Rinke, vice president of marketing for Hungry Howie’s, is one who sees the rule as problematic. He says there’s no clear FDA definition of what a menu is, noting that it could be any piece of advertising or ordering source, be it phone, flier, or in the store.
“Our argument against the rule is that most consumers don’t order pizza in our stores; they call up on the phone or order online, and that represents 90 percent of all our orders,” he says. “Putting labeling on our menuboard doesn’t do the consumer a service at all because by the time they pick up the pizza, it’s too late.”
Labeling on the menuboard is also a problem, experts say, because most menus are crowded enough as it is with menu names, prices, and pictures. But Tom Cook, principal at King-Casey, a consulting firm based in Westport, Connecticut, says there are a few ways operators can optimize their menuboard so that calorie and menu information are presented in such a way that does not burden the customer.
“A menuboard is the primary tool for a [quick serve] to drive the business. It’s the key marketing device, so it’s important that it’s optimized to the hardest selling job that it can for the brand, because that’s where all the money is made,” Cook says. “Most menuboards are already packed with information and are tight on space anyway, so now that they have to add these calories, an [operator] has to figure out how to do that without it looking even more complicated than it already is.”
A restaurant can only move things around so much and make things so small before it starts hurting the communication, he adds. Perfecting the menuboard is a balancing act, and adding calorie information might require cutting other items.
One way to help with the de-cluttering is to eliminate items that aren’t selling well and aren’t contributing much to the bottom line, Cook says. By taking these items off the menuboard completely, it adds space and gives it a cleaner look.
He also suggests leveraging menuboard “hot spots”—those areas that customers tend to look at first. It’s an area that King-Casey has done extensive research on throughout the years.
“This is where the best-selling and highest-margin items should be placed,” he says. For an interior menuboard, that spot is normally the direct center above the register, while for a drive-thru menuboard, it’s eye-level and to the right of the center, he says.
The labeling mandate should encourage operators to re-evaluate their broader menu strategy, Cook says. To be successful in creating a menuboard with calorie counts, a savvy quick-service operator will need to figure out what they ultimately want their menu to communicate, while also understanding the best ways to make money from menu items.
For instance, he says, research shows that establishing a designated part of the menuboard for new product introductions is helpful since customers grow accustomed to looking at this section of the menuboard to see what’s new. An optimized menuboard strategy should designate a specific portion of the menuboard for the launch of limited-time offers and new or seasonal items.
Early adapters of adding the calorie counts to menuboards have seen a slight impact on sales, Cook says, and that’s a worry that has to be considered.
“Brands and operators need to recognize that adding calories will have some sort of impact on sales of products because customers will look at items and might think that the calories are too much for an item and choose to order elsewhere off the menu,” he says. “They won’t leave, but will default to another item to save those calories. [Quick serves] need to think about this ahead of time.”
For example, if one of their best-selling and most profitable products has a high calorie count, a restaurant should prepare for the hit by bringing another high-profit item front and center on the menuboard.
“What they need to do is find something else with less calories but also a good seller that they can trade the customer to and lay out the menuboard so that a default product is seen,” Cook says. “Otherwise, customers may turn to a lower cost and lower profitable outcome.”
Brands might also want to consider additional regulations coming down the pike. Jesse Gideon, chief operating officer and corporate chef for Atlanta-based Fresh to Order, believes the calorie-labeling rule is good because it allows more transparency for guests to make an informed decision. But he has a hunch that putting calories on the menuboard is only the beginning.
“Calories are only one measure of labeling,” he says. “I’m wondering how other factors such as sodium, fats, cholesterol, or even allergens, etc., will be mandated in the future.”
What the Regulations Say
The U.S. Food and Drug Administration (FDA) announced its formal regulations for menu labeling on November 25, nearly five years after the regulations were passed with the Patient Protection and Affordable Care Act as a way to help customers make more informed decisions about their eating away from home.
"Americans eat and drink about one-third of their calories away from home," says FDA Commissioner Margaret A. Hamburg, M.D., in a release. "These final rules will give consumers more information when they are dining out and help them lead healthier lives."
The FDA’s regulations apply to chain restaurants—those with 20 or more units, doing business under the same name, and selling the same menu items—as well as similar retail food establishments, like movie theaters, convenience stores, and even vending machines. According to the regulations, food establishments must directly provide clear and consistent nutrition information for customers, including calories posted on menus and menuboards and a statement about suggested daily caloric intake. Information such as calories from fat, total fat, sodium, carbohydrates, fiber, sugars, protein, trans fat, and cholesterol also must be available in writing to customers on request.
According to the FDA regulations, foods that fall under the labeling mandate include:
• Meals from sit-down restaurants
• Foods purchased at drive-thru windows
• Take-out food such as pizza
• Foods, such as made-to-order sandwiches, ordered from a menu or menuboard at a grocery store or delicatessen
• Foods you serve yourself from a salad or hot food bar
• Muffins at a bakery or coffee shop
• Popcorn purchased at a movie theater or amusement park
• A scoop of ice cream, milk shake, or sundae from an ice cream store
• Hot dogs or frozen drinks prepared on site in a convenience or warehouse store
• Certain alcoholic beverages
Meanwhile, not covered under the regulations are certain foods purchased in grocery stores or other similar retail food establishments that are intended for more than one person to eat and require additional preparation before consuming, such as pounds of deli meats, cheeses, or large-size deli salads.
Operators have until the end of this year to comply with the regulations. For more information, visit www.fda.gov/Food/IngredientsPackagingLabeling/LabelingNutrition.