Barry Skown
July 28, 2016
FDA Nutrition Labeling: Consumer Information? Or Industry Nightmare?
FDA Nutrition Labeling:  Consumer Information? Or Industry Nightmare?

You pull up to the drive-thru menu board of your favorite fast-food restaurant. As you peruse the food choices listed on the board, you notice some new information has been added to each…the dreaded calorie information!  Oh no, you think!  Why would anyone want to see just how many calories there are in a large french fries?

Back in December 2014, the FDA finalized one new, but little-publicized, rule:

requiring that calorie information be listed on menus and menu boards in chain restaurants, similar retail food establishments and vending machines with 20 or more locations to provide consumers with more nutritional information about the foods they eat outside of the home.”

The new FDA rule poses the question: Is this rule a good thing in order to create a better-informed consumer and for overall “consumer protection and information;” or is this just another bureaucratic program created with good intentions but, in reality, will only create a nightmare for foodservice owners, operators, and workers?

What are Similar Retail Food Establishments?

The phrase “similar retail food establishments” refers to many different types of outlets:

  • employee dining facilities
  • college/university dining facilities
  • food take-out facilities
  • pizza delivery establishments
  • food facilities in entertainment venues (e.g., movie theaters and amusement parks)
  • cafeterias
  • coffee shops, and
  • grocery/convenient stores

This broad definition of foodservice establishments makes this new FDA rule (part of the Affordable Care Act) a very far-reaching implication for the foodservice industry. Oddly, the new rule exempts food trucks, planes, and trains, as well as school cafeterias participating in the USDA school lunch program. The exemption for the school lunch program I get…but why food trucks, planes, and trains?? If the goal is a more informed consumer, shouldn’t people purchasing food from those establishments have the opportunity to make informed decisions at those venues?

Rule Specifics

According to the FDA rule, covered restaurants/establishments will be required to:

“(1) disclose calorie information on menus and menu boards for standard menu items; (2) post a succinct statement concerning suggested daily caloric intake on menus and menu boards; and (3) post on menus and menu boards a statement that written nutrition information is available upon request.”

The final rule requires that the following written nutrition information for standard menu items be provided to consumers upon request: total calories, calories from fat, total fat, saturated fat, trans fat, cholesterol, sodium, total carbohydrates, fiber, sugars, and protein.

Basically, the rule requires that the same information you have seen on nearly every packaged food item in your grocery store for the past several years, now be available to consumers at table-service, quick-service, and cafeteria foodservice facilities.

Complications

But then, the FDA creates a new level of confusion with the rule that has contributed to the current delay in the actual implementation on a broad basis.

There is a stipulation within the new rule that states:

Seasonal menu items offered for sale as temporary menu items, daily specials and condiments for general use typically available on a counter or table are exempt from the labeling requirements.”

So, for example, if you are the operator of an employee dining facility or college/university dining hall, and there are several menu stations whose items change on a daily basis (e.g., an “Action Station,” or “Stir Fry Station,” or even a “Pizza Station” where the ingredients in the pizza change daily), does this mean those “daily” items your Chef creates are exempt from complying?…or required to comply?…with the new rule? Additionally, what is to stop the Operator from claiming that all of the items served in the cafeteria that day are “daily specials” in order to get around the rule completely?

“Daily Specials” Analysis?

Then there is the effort involved with actually analyzing each menu item served on a daily basis to obtain accurate nutritional information required to not only meet the minimum requirements of the rule (i.e., the calorie count), but also, the expanded nutritional information that has to be available if requested by the consumer (i.e., total fat, calories from fat, saturated fat, cholesterol, sodium, total carbohydrates, fiber, sugars, and protein).

For restaurant chains (table-service or fast-food), this analysis is probably not much of a problem as their menus stay relatively static from month-to-month, even year-to-year. They can have the analysis performed by a food lab in a sufficient time period and absorb the cost because of their revenue volumes. But for the employee dining operator or university dining operator, the nutritional analysis requires a great deal more time and expense. At this point, the amount of time each resident manager or chef spends on analyzing recipes for consumer information will be dependent on the final determination that the FDA makes regarding “daily specials.”

Possible Implications

The possible implications this could have on the contract-food industry is significant. For example, how is chef spontaneity and creativity accommodated in this scenario? Do contract-foodservice management companies such as ARAMARK, Compass Group, and Sodexo, have to standardize their recipes in such a strict manner in the future and in so doing, wipe out the very “culinary creativity” that they all have worked so hard to base their reputations (and marketing campaigns) on? The same question is also applicable to chain table-service restaurants and the leeway they provide their culinary staff in each individual unit.

While the FDA sought to lessen the impact of this rule by applying it only to establishments with “20 or more locations,” thus eliminating the “mom-and-pop” cafes from this financial and time burden, it did include establishments “doing business under the same name” and “offering for sale substantially the same menu items.” This is a vaguely-worded definition that could give the FDA license to evaluate any establishment that has any type of “connection” whatsoever to another establishment (i.e., ownership, menu development, etc.).

Another implication contained in the rule is the stipulation that this includes “foods you serve yourself from a salad or hot food bar at a restaurant or grocery store.” How exactly is calorie information supposed to be supplied on a spoonful of broccoli or garbanzo beans from a salad bar?   What if one customer’s “spoonful” is less (or more) than another customer’s?  Are they each getting the same calorie information?  What about “prepared salads” on the salad bar such as a pasta salad or egg salad or chicken salad and how will the quantity selected by each customer be communicated in terms of calories or other nutritional information?

Good Intentions

Trust me, I totally understand why the FDA created this rule and the great intentions behind it. And let’s be honest…there are dozens of studies out there that prove that Americans as a nation have an eating and weight problem.   So it makes total sense that a better informed consumer can, and should, make better decisions about the food they eat and the ingredients that go into their food.  But it can be a difficult task to translate “good intentions” into practical, and applicable, laws and regulations that can be implemented without a significant financial burden.

The FDA has not yet determined the “silver bullet” by which to apply this new rule to all the establishments it listed when the rule was announced. Thus, the rule has not yet been enforced for application in contract-managed food operations.  As this gets sorted out, it is likely some applications of the rule may need to be modified in order to apply it on a practical basis.  At least…that’s the hope of a number of foodservice operators!

By:  Barry Skown

Senior Associate | Management Advisory Services

Portland

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