Calorie Posting in Chain Restaurants
Mandatory calorie posting influenced consumer behavior at Starbucks in New York City, causing average calories per transaction to drop by 6 percent.
Nutrition labeling on packaged food has been mandatory in the United States since the early 1990s, and printing tiny lists on cans and bags has long been accepted practice. Yet, in spite of this improvement in providing information, the share of Americans who are obese has continued to rise, increasing from 15.9 percent in 1995 to 26.6 percent in 2008.
The fraction of calories consumed in restaurants also has risen in recent years. In 2008, New York City extended nutrition labeling to chain restaurants, requiring them to post clearly the number of calories in every one of their foods and beverages. In March 2010, new federal health care legislation mandated calorie posting for chain restaurants nationwide beginning in 2011. Will these point-of-purchase postings have any public health effect? Could menus with 350 calories printed beside eight grain roll drive a consumer to buy a banana (100 calories) instead?
In Calorie Posting in Chain Restaurants (NBER Working Paper No. 15648), study authors Bryan Bollinger, Phillip Leslie, and Alan Sorensen ask whether mandatory calorie posting influences consumers purchase decisions. They use detailed data from Starbucks stores in New York City, where calories are posted; from Starbucks in Boston and Philadelphia, where calories are not posted; and from Starbucks stores throughout the nation. The researchers find that mandatory calorie posting influenced consumer behavior at Starbucks in New York City, causing average calories per transaction to drop by 6 percent (from 247 to 232 calories). They also find that these effects are long lasting: after the posting began, the calorie reduction persisted for at least 10 months (the duration of the sample period). There is also evidence of persistent learning effects: commuters who lowered their calories per transaction on weekdays in New York City also lowered them in transactions at Starbucks outside the city, where calories were not posted.
The researchers also find that almost all of the calorie-reduction effects in Starbucks are related to food not beverage -- purchases. Following calorie posting, average food calories per transaction fell by 14 percent. The effect is larger for high-calorie consumers: individuals who averaged more than 250 calories per transaction reacted to calorie posting by decreasing calories per transaction by 26 percent dramatically more than the 6 percent average reduction for all consumers.
Beverage consumption was largely unaffected by calorie posting. Consumers tended to underestimate the calories contained in Starbucks food and bakery items, but they overestimated the calories contained in Starbucks beverages. According to the researchers, consumers who discovered by calorie posting that an Iced Café Latte contains just 130 calories were pleasantly surprised and continued buying.
Noting that calorie reductions on the order of 6 percent at chain restaurants would yield only modest decreases in body weight, the researchers suggest that the direct effect of calorie posting on U.S. obesity may be small. The most meaningful effect of the calorie posting law may be its long-run impact on menu choices, as restaurants will have an economic incentive to offer low-calorie options. The new policy may also benefit public health as consumers grow accustomed to counting calories and choose or demand healthier foods.
The study also explores how calorie posting affected corporate profits. The authors find that it did not cause any significant change in Starbucks overall revenue. At Starbucks stores located within 100 meters of a Dunkin Donuts store, revenue actually increased by 3 percent suggesting that calorie posting may have caused some consumers to substitute away from Dunkin Donuts toward Starbucks.
-- Sarah H. WrightThe Digest is not copyrighted and may be reproduced freely with appropriate attribution of source.