Food Labeling

Introduction

Food labeling is a relatively new regulation as the Nutrition Labeling and Education Act was established in 1990. There is a strong desire to combat obesity as well as keeping consumers fully aware of what they are consuming and purchasing. To create uniformity the Affordable Care Act enacted in 2010, placed a clause that requires the FDA to regulate menu labeling in restaurants with 20 or more locations under the same name. With the governance of the NLEA on food labeling and section 4205 of the ACA for menu-labeling, there is a plan in place to help America combat obesity.

Food labeling

The Federal Food, Drug, and Cosmetic Act was amended in 1990. It prohibits labeling that is false or misleading which is generally termed misbranding. Congress mandated that certain nutrition information be on packaged food in a specific and standardized way. There are a few countries that have also initiated nutrition labeling, Canada being one of them. The FFDCA and the FDA require that food labels have ingredients, nutrition information and other content in order for consumers to make healthy food choices and avoid allergens or other ingredients that could cause harm. There a are few requirements for food labels. A label should have a nutrition fact panel that shows the serving size, number of servings per container, the number of calories per serving, and what the amount of certain nutrients are like fiber, vitamins, fat, and sodium. They should also include an ingredients list where products are identified by their common name and in order of weight. The information should be in English and the possible major allergens listed.

The FFDCA and the FDA require that if a health claim be stated on a label, it has to be authorized by the FDA. The FDA authorizes the use of claims to be used for 12 relationships that are between a nutrient, a disease or a health related condition. There are several tools the FDA uses to be sure that food labeling is done according to the requirements. Warning letters and meetings regarding regulations are held. They take action when there is a violation by refusing imports, alerts on imports, seizures and court orders requiring the cessation of the violation. There is a desire to create an industrywide system by the American Medical Association and the American Heart Association. This calls for food and beverage companies to comply to the government and other entities to create uniformity.

Food labeling internationally

The European Union does not require that all foods have nutrition labels but it requires that it have health or nutrition claims on labels or on products that have added vitamins or minerals voluntarily. There are a few countries that have implemented voluntary front-of-package labeling. These countries include the United Kingdom, the Netherlands, and Sweden. The United Kingdom’s Food Standards Agency has implemented voluntary front-of-packaging traffic light symbols. Green is for the healthiest food choices, amber is for the less healthy choices and red is for the least healthy. These are rated according to the fat, saturated fat, sugar, salt, and calorie content. Some change has been seen with this system as manufacturers are reformulating products that were unhealthy into healthier products and consumers are making wiser choices.

Endorsed by the Ministry of Health, the Netherlands uses a healthy choice symbol for voluntary front-of-package labeling. The symbols would vary by food. This will be reevaluated every 2 years by an independent scientific committee.

In Sweden, the National Food Administration uses the symbol of a keyhole on voluntary front-of-packaging labels. The criteria for this is that the foods have to be low in fat, sugar and sodium and must have higher levels of fiber than foods that are in a category equivalent to it. The House of Commons’ Committee on Health recommended that Health Canada, which is the health agency for Canada, to have mandatory, simple and standard front-of-package labeling requirements for food that is prepackaged and these requirements should start with the advertising of foods to children. Health Canada has taken a few initiatives, one of them being to have consumer research on front-of-package labeling.

Legislation proposed by The European Commission would make it mandatory for information such as calories, saturated fat, fat, sugars and salt be displayed on the front of packages. Food labels have a large influence on what consumers purchase and that misleading and confusing labels can be difficult for consumers to understand according to the European Union’s Commissioner for health.

Menu-labeling laws

Menu-labeling laws are put in place to help customers make healthier and informed food choices. These laws are also put in place in order to decrease customer confusion and deception. An example of this is that some customers may think that certain menu items are low in calories but in fact they are not. There have been several levels of government that have tried to implement menu-labeling laws. New York had started to enact local laws for establishments that already disclosed and calculated nutrition information of items on their menus. California in 2008 became the first state to regulate the menu labeling at restaurants with locations of 20 or more. New York City has been the subject of more cases that involved free speech challenges and the invalidation of state laws due to Federal laws.

History

The United States has regulated food production and distribution so that customers are aware of what is in their food. The conditions of food preparation were not to standard so a change in regulations were needed. Congress passed the Food and Drug Act which was also known as the Wiley Act in 1906. It regulated food and drug product labeling to ensure that foods were not contaminated with decomposed animal or vegetable products. The Board of Food and Drug Inspection then become the regulatory body of the Wiley Act in 1907. The Board of Food and Drug Inspection became the Food and Drug Administration in 1927. Due to the vague language and inconsistencies found in the Wiley Act, Congress then passed the Federal Food Drug and Cosmetic Act in 1938. This was updated to keep public health safe. This remains the foundation of the regulatory body of the FDA today.

Congress passed the Nutrition Labeling and Education Act in 1990. The NLEA is the body that requires nutritional labeling on all food products under the authority of the FDA. The NLEA helps customers make informed decisions about the food they consume. Though the NLEA oversaw the labeling of foods, it did not include the foods served in restaurants. Because of this, 21 state and local governments have put laws into place requiring large chain restaurants to disclose nutritional information on their menus. This then became more of a national cause as the Affordable Care Act mandated this nationally.

Affordable Care Act

History and Statutes and legislations

The Affordable Care Act was signed into law on March 23, 2010. According to the House Committee on Energy and Commerce, the purpose of Section 4205 is to provide consumers with important health information and will allow the consumer to make a choice and be responsible about what they eat as well as their children. Section 4205 of H.R. 3590 in the Affordable Care Act creates a standard nationally for the posting of caloric information on the menu of chain restaurants and on vending machines. The following are the requirements of Section 4205:

Restaurant chains with 20 or more locations are to post calories on the menu, menu board, drive-through and food display tags. Other nutrition information such as carbohydrates, fat, saturated fat, fiber, protein and sodium should be available upon request. The US Food and Drug Administration (FDA) is the agency in charge of the program. The tasks of the agency is to determine how the nutrition information on the menu is presented. They are to determine the size and type of font to be used on the vending machine displays. Section 4205 takes precedence over local laws which disallows local governments to require more disclosure on menu items.

There is a reasonable standard that Section 4205 includes when it comes to deciding the nutrition information. This gives the restaurants some flexibility in how they determine the nutritional data. They can use means such as cookbooks, lab analysis and nutrient databases.

Dilemma

FDA lack of enforcement on food labeling

The FDA’s efforts of regulating food labeling has been found to be on the decline and stayed stationary. Medical, health and consumer organizations in the US, as well as Europe, are advocating for front-of-package symbol that would help consumers choose healthy foods. This would also help avoid labels that are misleading or confusing. There are a few who have voluntary front-of-package nutrition symbols on food labels.

Some consumers have reported an understanding of certain terms on the label such as sugar or vitamins and they found daily reference values helpful but they still generally found nutrition labeling confusing. There is a difficulty in understanding what role nutrients play in their diets. There is also a lack of understanding in the relationship between sugar and carbohydrates and terms such as cholesterol and fatty acids. Some studies show that consumers do look at the information but there is no further process of it. In 2006, the National Academies’ Institute of Medicine, which advises federal agencies on issues regarding health, reported that little evidence shows that the information on a food label significantly impacts the eating and purchasing of food of consumers. There was a recommendation from this agency to the FDA. This recommendation was to increase research done on nutrition labels and improve on the strategies to use food labels as a tool for education. The American Medical Association’s letter to the FDA in 2007 stated that evidence exists that consumers do have difficulty in making suitable judgements on which foods are healthy.

Effectiveness of menu labeling in restaurants

When posting caloric information on menus, an issue exists that is to be considered. Some consumers do not understand how to use that information provided and underestimate the amount of calories that are in foods. Due to the lack of understanding there is a lack of interest in that information. An IFIC study showed that the serving size information caused confusion for customers. Costumers believed that the information may be inaccurate and did not consider how an individual food item would factor into their daily food intake. The macronutrients are often scrutinized but the serving size and caloric information aren’t considered as much.

Obesity is a large and growing problem in the United States and many health complications and even death result from it. There are over 20 chronic diseases related to obesity some such as diabetes and heart disease. One main issue is that there is an economic burden that comes with obesity. There is an estimate of annual medical spending ranging from $92.6 billion to $117 billion. This shows the enormity of the obesity pandemic. The Congressional Budget Office stated that obese adults have exceeded spending for adults who are not obese by 8% in 1987 and by approximately 38% in 2007. (Closing the kitchen) This is a large increase and is a testament that something needs to be done with the increasing percentages. There is another study that found that obesity adds over $2,800 to medical bills. The taxpayers are then the ones who are responsible for the expenses as medical services such as Medicaid and Medicare are federally funded.

The type of regulation that is needed for food and health is a struggle among Policymakers. There are several examples of changes that have been attempted by the government to combat obesity. Some programs that have been implemented are making exercise mandatory in school, regulating how food is marketed and advertised, and banning transfat. Where tension lies is that an individual has the right and freedom to choose what goes into their bodies. The foods they decide to eat are their personal choice, so as much as the government would like to make lasting changes, this factor will always remain. A balance must be made between the policies being implemented and the personal right to choose what to eat. Policymakers and public health advocates push for restaurants to disclose the caloric value in menu items. The average daily caloric intake is 2,000 calories a day based on the guidance of the FDA. Some menu items are close to or in excess of the 2,000 calories per day. There is a belief that with this information being readily available consumers would make healthier choices and that would result in reduced caloric intake which will then reduce obesity.

On average, 218 restaurant meals a year are consumed by Americans over the age of 8 years old. The trend of eating out is growing. Due to this trend, there is a decrease of consuming milk and vegetables that is typically eaten at home. Restaurants commonly serve portion sizes that are two or three more the size than what is recommended by the USDA which is a cause for concern and can impact the growing fight on obesity. Americans spent 48% of their money on foods outside of the home. This is a significant increase from the 25% that was seen in 1955.

There are four common critiques of menu-labeling laws. One is that there is difficulty in gathering nutritional information for the menus and menu boards. An example given is Starbucks where there is an enormous number of customizable drinks and to have nutritional information for that would be tricky. The second is that the menu-labeling laws are expensive because of costs for testing menu items, which would decrease the frequency of new items. Costs are also from having to print menus and menu boards that show the nutritional information. The costs of these changes would then trickle down to the customer. The third issue is that the larger restaurants feel that the smaller ones should not be exempt from the law. It would most likely be harder for a smaller restaurant to take on the additional costs of updating menus and menu boards. The fourth issue is that the laws will not guarantee the accuracy of the nutritional information. Different laboratories have different standards and because the law doesn’t specify where food should be analyzed, this puts the validity of the information in jeopardy. The problems that could arise are inconsistent labeling which would not fulfill the goal of the menu-labeling law.

Cases

New York State Restaurant Association v. New York City Board of Health

In the case of the New York State Restaurant Association v. the New York City Board of Health, the NYSRA challenged the Board of Health on the grounds of free speech and federal preemption. It was found that the regulations of New York City were preempted by the NLEA and were therefore inapplicable. The court did not find a violation of the First Amendment because rational was found with the city’s desire to combat obesity. The New York City Board of Health did not appeal the decision of the court but made revisions to the regulations. The revisions would require all New York City restaurants with fifteen or more locations the place calorie information on menus and menu boards. The NYSRA then brought another lawsuit to challenge the revised law of the NYC Board of Health. With this the court determined that the regulation was not preempted by the NLEA and the First Amendment rights of the NYSRA were not infringed upon. The decision was appealed by the NYSRA but the Second Circuit Court affirmed that the NLEA does not regulate the nutrition information of food but they regulate the claims of contents of food by the restaurant.

Holk v. Snapple Beverage Corproration

Stacey Holk has purchased several Snapple products over the years. She found that the products were deceptive and that Snapple is unlawful in its practices. A class action lawsuit was filed against Snapple in the Superior Court of New Jersey with the claims on the basis of the New Jersey Consumer Fraud Act, unjust enrichment and common law restitution, breach of express warranty and breach of the implied warranty of merchantability. Holk felt that the labels on the beverage bottle were misleading. Statements such as “Made from the Best Stuff on Earth”, when it was believed that the beverage was not. Another statement that Holk found that was falsely labeled was that one drink was called the “Acai Black Berry Juice” but it did not contain acai berry or blackberry juice in it. She also argued that the Snapple products were not “All Natural” because the products contained High Fructose Corn Syrup.

Snapple filed to dismiss the claim and Holk amended the claim to only state two things, that the labels were misleading on the grounds that it states “All Natural” and that some of the beverages stated it had products in it that were not in the beverages. Snapple filed to dismiss again under the grounds that Holk’s claims were preempted and no claim was stated. Holk then responded to the dismissal with only one claim stating that the label is misleading as it states “All Natural” but they do contain High Fructose Corn Syrup in them.

The District Court dismissed Holk’s claims. The District Court found that the FDA does not have clear language on the definition of natural but it does have language that gives a good perception on the use of that word. The District court then concluded that the FDA with its expertise should set the rules and not the court. They also concluded that the local or state laws imposing additional limitations and requirements would create more barriers to what Congress is trying to accomplish.

The first case showed the issue that lies with the requirements of the law. It is seen that rights are being infringed up and that the main goal of combatting obesity may be loss because of the eternal factors affecting the change. The second case shows how manufacturers must take care and precaution when labeling products as to not mislead consumers. If a product label claims something, the trust a consumer has in the product may be broken if the claims are shown to be untrue.

Studies

Sociodemographic

Low income and minority populations carry the burden of obesity more significantly. Studies have been conducted to show the association between income and how they use caloric information on the menu. One study did show that customers with higher income are more likely to use the information in contrast those who have lower income.

This study was conducted in McDonald’s restaurants that were in neighborhoods with a median household income that ranged from $42,600 per year to at least $70, 000. The participants were asked to complete a survey outside of the McDonald’s restaurant. McDonald’s was chosen because they did have the caloric information of menu items posted on the menu board.

What was analyzed in this study is the sociodemographics of individuals and how they responded to menu selections with calorie information posted. There was an association between those using calorie menu labels and the income of the customer. The customers with annual household incomes of $100.000 or more were more than twice likely to notice calorie information on the menu board than those with incomes less than $50,000 a year.

In order to fill in the gap as to why those with lower income are not using the menu labels, intervention is needed. What was noted was that although the caloric information was posted, it may be helpful to place a statement regarding what the daily recommendation for calorie intake is. If customers are aware of the suggested total caloric intake, they might then better understand the menu item in relation to the meal they will choose. Those who regularly eat at fast food locations are not concerned with the amount of calories in menu items just because it is a fast food restaurant. They aren’t necessarily looking to find healthy eats.

Low income neighborhoods and neighborhoods of ethnic minorities have more access to fast food restaurants as compared to neighborhoods that are predominantly white and higher income. The fast food restaurants are heavily marketed in low income neighborhoods. Age and education were also a factor that influences the choice people make with calorie menu labels. Individuals educated scholastically are more likely to make healthier lifestyle choices such as decreased amount of smoking, exercising, regular health checkups and more likely to read publications on health information. These individuals also had better health in areas of lower body mass index and they also had a low risk of diabetes.

The study also showed a large difference in the total calories purchased from those who used the information on the menu board and those who did not. There was a decrease of 146 total calories purchased when menu labels were used. The use of menu labels can positively affect the choice in menu selections and decrease the number of calories that are purchased by the customers who do use the information. There are only a small portion of people who actually use the menu labeling but there are a large number who do notice the information. Those with a higher income and more educated are more likely to benefit from the menu labeling of calories, which does contribute to the health disparities.

There are a few other studies that focused more on whether restaurant patrons noticed the menu label of caloric information and if it influenced their purchase. Roberto and colleagues did a study dinner where they participants were randomly assigned to order off one out of three menus that had the same items from two restaurants. One menu only listed the items offered, one listed items along with calorie information or one had the calorie information as well as a statement regarding the recommended daily caloric intake for adults. Participants were given a questionnaire and were asked questions in regards to their dining experience. They were to select an item from the menu and they were to eat. What was not consumed was collected to measure the total calories that were consumed. The participants were then asked to recall the food they ate the next day. They found that calorie information did reduce the total amount of calories that people ordered and ate in the meal ordered. It also gave improvement to their ability to estimate the calories that were consumed and it did affect their eating later in the day.

In Elbel and colleagues, survey responses and receipts of customers during lunch and dinner hour were collected. There were four fast food restaurant chains used in this study and they were located in low-income neighborhoods in New York and Newark, NJ. Data was collected before the menu labeling laws were implemented and after. As for Newark, NJ there were no laws in motion. Nutrition information was used from the restaurants website and the amount of calories, sodium, saturated fat, and sugar were calculated. There was an increase in the amount of people who noticed the calorie labeling but this was after the New York law went into effect. Those who did notice the calorie labeling did say that it influenced what they bought but the actual calorie content in what was purchased did not make much of a change.

Bollinger and colleagues collected a year’s worth of transaction data from Starbucks locations in Seattle WA, New York, Boston, and Philadelphia. The purpose of collecting this information was to examine the consumer behavior after the New York law made calorie posting mandatory. What was seen in NY was that there was a 6% reduction in the calories per purchase after Starbucks stated to post the caloric information on menus. This lasted at least 10 months after Starbucks made changes. Coffee sales did not change but the food selections did experience a dip in sales but there was an increase in the purchase of the lower calorie food items.

There are other factors that affect customer menu selections are external cues and emotional drivers that may influence the decision of items chosen. Taste ranked higher than health in studies that looked at what drives customer’s menu selections. The Senior Nutrition Consultant at Chick-fil-A stated that consumers may make changes initially but may ultimately return back to their old menu selection habits. She also states that the challenge is to make healthy food choices state just as good as the unhealthy choices. Customers would not feel as bad when making those purchases.

What happens to food labeling laws if ACA is not active

If the Affordable Care Act was to be void, the decisions on the requirements of restaurants to post nutritional information on the menu would be left to the local governing body. This will then take away the uniformity across the country. The work done in sending the message of combating obesity through healthy choices may not be as impactful. The daily caloric intake has provided guidance on how much you should consume in a day and other initiatives of exercise and healthy lunches in school also helps in sending a message. This message is not complete without combatting restaurants as Americans eat out more frequently than in the past. The local governing bodies would have to create the standard for their jurisdictions.

Conclusion

Applying knowledge to a managerial role

What was learned

The laws in terms of regulations of food purchased by the consumer are always evolving. The federal laws have been put into place to create uniformity across the United States. This in some ways helps the nation realize the severity of the obesity pandemic in this country. In other ways it infringes on the local laws limiting their say so as to how to handle food laws in their jurisdiction. Special attention and care needs to be done to fill in the gap where this new information is not being used in ways it was intended to. This gap is more so on the lines of the “uneducated” consumer who may not know how to read the calorie information or how to apply it positively when making menu choices.

The governing bodies of food labeling in the United States and internationally have taken steps in order to make labeling simple for consumers to use. The use of symbols on front-of-packaging labels make choices easier and it also gives the consumer an opportunity to make a choice. This is important because it allows the consumer to take ownership over their food choices. This is also useful in forcing food and beverage manufacturers to rebrand and reformulate their products to fit the criteria of healthy foods. If there is a clear interest in healthful eating, manufacturers should take note and participate in this mission for better eating habits.

In the role of a manager, there is a responsibility to be sure that your establishment does have nutritional information displayed properly. Another important piece is that staff members should be trained and educated on the nutritional information on the menu. They are not expected to have in depth knowledge but there should be basic comprehension of the caloric information on the menu. Additional nutritional information should be readily available for customers when they request it.

When ordering products or supplying the restaurant with items, implementing change for a healthier menu won’t be as simple. It is helpful to test the customer base to see their response for this new change. Being honest with ingredients is important as you want to gain the trust of the consumer and that they will feel safe eating at your establishment. Complying to laws helps the reputation of your business whether that is making sure items are displayed correctly or that the font and menu colors are clear enough for all customers to understand. There is a long road to resolving the issue with food labeling but with stricter ways of enforcing change and making businesses accountable, and educating Americans, it is possible to reverse the curve.