Outside Insights | November 2016 | By Guest Author

What Restaurants Need to Know About FDA Regulations

Federal mandates will require greater transparency. Here's what's required and how to get on board.
The FDA estimates 1,640 chains and a total of 278,000 restaurant locations throughout the U.S. will be affected by the mandate. Thinkstock

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According to the U.S Food and Drug Administration (FDA), Americans eat and drink about one-third of their calories away from home. In order to help consumers make more informed and healthier dietary choices, the FDA established a mandate for nutrition labeling in chain restaurants and similar retail establishments. For the quick-service industry, this federal mandate requires greater transparency into the nutritional content of menu items and marks a dynamic shift in the way information is communicated to consumers.

What’s Required?

Direct. Accessible. Consistent. Come July 1, 2018, these are the standards to which quick serve restaurant chains—including coffee shops, ice cream parlors, and more—will be held to when it comes to delivering nutritional information to customers without exception. Thankfully, the government has provided plenty of runway to prepare, allowing businesses ample time to research and decide on the most efficient and cost-effective compliance plan.

After the effective date, chains with over 20 locations will be required to “list calorie information for standard menu items, including a succinct statement about suggested daily caloric intake,” the FDA explains. “Other nutrient information—total calories, calories from fat, total fat, saturated fat, trans fat, cholesterol, sodium, total carbohydrates, fiber, sugars, and protein—will have to be made available in writing on request.” Restaurant chains will also be required to post a highly visible statement offering additional nutrition information to consumers.

The Cost of Non-Compliance

The FDA estimates 1,640 chains and a total of 278,000 restaurant locations throughout the U.S. will be affected by the mandate. And while complying with the regulations has been projected by the FDA to cost around $1,800 per limited-service restaurant and less than $1,000 for a full-service concept, non-compliance or misrepresentation of nutritional values could result in hefty criminal charges at the federal level. Clearly, this is a consequence any savvy business owner would want to guard against.

What Can Business Owners Do?

Many forward-thinking chains like Starbucks, Connie’s Pizza, and MadGreens have opted to take the digital route toward compliance. Installing digital signage and implementing an intuitive, user-friendly software that can integrate with existing point of sale systems makes compliance easy and painless for quick-service restaurant owners and franchisees alike.

Peter Stamos, president of digital signage software company, Ping HD, says that with customized solutions, FDA compliance is simple and more affordable than ever before. “Many of our clients with fully-functional menu boards were able to comfortably manage them right from their mobile device within hours of installation,” he says. “Choosing software that empowers [quick service] owners and franchisees to manage their signage content independently makes it extremely versatile and cost effective.”

The Fringe Benefits of Compliance

Beyond FDA compliance, digital menu boards are one of the most impactful ways to connect with consumers. By implementing digital signage, many quick serve restaurants have seen dramatic results, a positive return on investment and long-term sustainability. Customers appreciate the transparency as well, with the National Restaurant Association, reporting that three out of four Americans are more likely to choose a restaurant that offers healthy menu options.

The functionality of digital menu boards themselves is versatile, too. Whether it’s updating new menu items, pushing sponsored advertising or promoting weekly specials, digital signage solutions offer a wide range of profit-building options. “The best menu board solutions are able to integrate with existing point of sale systems, so any changes made by a business owner are updated in real-time across all displays,” Stamos asys. “By going digital, restaurant owners and franchisees can update and make changes to their menu boards from any location around the world with any device that has an internet connection.”

Get Ahead of the Game

Here’s the bottom line: although the effective date for compliance has been pushed back several times, it’s more beneficial for businesses and their customers to start planning for the inevitable now—especially given the FDA will want to see proof of nutritional content and calorie levels through a vetted analysis process.

Like any industry change, there will be some growing pains that go along with compliance to the FDA mandate. Ultimately, the new rule on food labeling is a good one, and will benefit the general wellness of the entire country. Because consumers today are more educated and health-conscious than ever before, quick-serves that recognize this shift will lead the pack, while others will fall behind.

Greg Lewis is managing director and partner of Ping HD. Greg is a physical fitness enthusiast, and when he’s not rooting for his favorite Philadelphia sports teams, can be found in the mountains snowboarding or hiking.
 

Comments

Great information. We are busy helping a lot of brands meet these new standards at MenuTrinfo. Greg, you make this easy to follow and understand. One quick question I have not seen the date you listed. We show May 5, 2017 as the implantation date from FDA but never mind being corrected if we are in error.

Can you share where this date came from for me since a client of our has already pinged me with this article asking for verification of the date?

Thanks again for the piece and all the best to you!
Betsy Craig

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