Obesity in America added a staggering $663 billion to the annual national healthcare price tag in 2012, and now exceeds smoking as public health enemy number one when it comes to cost.1
Already a public health epidemic, the Federal Department of Agriculture (FDA) instituted a new requirement meant to slow obesity’s deadly and expensive takeover. As mandated in the Affordable Care Act2, all restaurants and similar retail food establishments (SRFE) with 20 or more locations will be required to disclose calories on menus and provide additional nutritional information upon request by December 2016.3
With more than one-third of U.S. adults considered obese4 the problem is clear: consumers generally lack knowledge of how many calories they eat and how many they need. But the solution presents a complex challenge for food services companies, and comes at a high cost, not only in upfront implementation, but in the long-term maintenance and expansion. As more companies comply, customers’ expectations will steadily rise, demanding deeper views into supply chains and increasingly sophisticated tools to make informed dining decisions.
FDA Nutritional Disclosure Compliance Requirements:
Calorie Disclosure - Number of calories for each standard menu item at the time of purchase
Daily Calorie Statement - A "succinct statement" putting the calories into the context of a daily diet
Statement on the Availability of Additional Nutritional Information
So, where do you start? When developing your menu disclosure strategy, North Highland recommends a focused effort around governance, processes, and technology for both implementation and ongoing maintenance. Beyond compliance, it is imperative to keep an eye on your customer’s in-store experience and the opportunity this requirement presents to optimize an emerging touch point.
From Compliance to Competitive Advantage
While ensuring legal compliance is of utmost importance, menu disclosures can be leveraged to improve the customer experience. Nutritional choices are personal, and developing a solution to assist with food choices can elevate your consumer relationships. The right positioning of your nutritional strategy can move nutritional disclosures from a regulatory compliance to a business advantage. When embarking on strategy development, there are a few key consideration points:
- How do your menu offerings and choices impact the information you provide? How should it be delivered? Multi-serving or variable items pose a challenge for restaurants with menus that are already short on space.
- Will the information be perceived as good or bad? How might you need to adjust your offerings to make it positive?
- How can you utilize digital technologies to ensure nutritional information is always up to date, and to reduce production costs and turnaround time?
- To keep consumer distraction at a minimum, is it possible to create menus that make nutritional decision-making easy without interfering with the dining experience?
- What nutritional information do you provide on each menu type (printed collateral, menu boards, web, mobile apps) and how can you amplify this messaging for your guests in and out of the restaurant?
- Should allergens or source disclosure be included in the information you provide?
- Is there potential for alignment with health organizations or initiatives?
- Should your menu disclosures also include product/ingredient source information?
The Building Blocks to a Sustainable Disclosure Strategy
There are several key building blocks, all constantly shifting elements of the food and beverage business that must be aligned in order to keep nutritional disclosures accurate and up-to-date: product, recipes and menus/collateral.
"Anything that builds trust with the guest is good. This isn't telling them what to eat or playing nutritional police, it's about making nutritional information available."
Ron Shaich - Co-Founder and CEO, Panera Bread
Ron Shaich - Co-Founder and CEO, Panera Bread
In an ideal state, product information is complete, accurate and static. Nutritional analysis processes are in place and executed repeatedly; recipes are accurate and equipped to assist in analysis; operators are executing recipes as stated; and all menus and supporting publications are current. But factor in regularly changing products, supply chains and menu offerings tracking against shifting consumer preferences, and it’s easy to see this is difficult to manage.
The Recipe for Nutritional Gathering and System Controls
Providing nutrition and allergen information to customers requires a focused effort, expertise and time. Many different elements and decisions go into the implementation and ongoing sustainment of menu disclosures. Companies must first decide if they want to utilize laboratory or database analysis to calculate nutrient information. In most cases, new processes need to be established to support ongoing culinary development and to ensure the most accurate, up-to-date information is disclosed. There are massive opportunities for system breakdowns through this process, so controls are essential to ensure adherence.
In order to create controls, companies must collate the many different elements and decisions that go into the implementation and ongoing reporting of nutritional information:
Five Critical First Steps
At North Highland, we recommend you take the following steps to understand how to chart your path toward successful menu transparency implementation:
- Formulate your nutritional disclosure strategy, focusing on improving the customer experience.
- Assess the impact based on the volume of locations, recipes, menus and collateral included under FDA ruling and for your strategic nutrition and allergen objectives.
- Analyze current menu offerings to determine your nutritional information-gathering strategy.
- Develop a phased approach for implementation. Pick easy wins, choose recipes and menus with little variability, then test and learn. Choose a few locations to test strategy and processes, then adjust based on learnings and value to customers.
- Evaluate operational impact for implementation and sustainment. Disclosing menu nutritional information to your customers in a meaningful way, verses handling it as a compliance exercise, will differentiate you as a brand. The true winners will be those that view this as an opportunity to connect with customers in a more meaningful way. The physical and economic health of our nation is in the balance. Food and beverage companies that harness this opportunity to educate will rise as catalysts of positive change.
For more information, please contact:
World Health Organization Burden of Disease database
Office of the Federal Register, Food Labeling: Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments
FDA, Statement on Extension of Menu Labeling Compliance Date
Journal of American Medicine
- Menu Measure: Health Bill Requires Calorie Disclosure, Wall Street Journal, 3/22/2010