AN ANALYSIS OF ITS EFFECT ON CONSUMERS AND RETAILERS

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MANDATORY CALORIE-COUNT DISPLAY:

AN ANALYSIS OF ITS EFFECT ON CONSUMERS AND

RETAILERS

Aniq Lakhpaty

Fuy312

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Executive Summary

In 2018 restaurants in the United States will need to provide calorie information on their

menus as part of the Patient Protection and Affordable Care Act passed by Congress. In the

following research, we examine the effectiveness of this legislation in reducing calorie

consumption in restaurants. Specifically, we explore the effect of the new policy on both the

supply and demand side, that is, consumer and retailer behaviors. To achieve this, two studies

are included in the following research: a meta-analysis of 186 studies investigating the effect

of calorie disclosure on calories selected, and a meta-analysis of 41 studies examining the effect

of calorie disclosure on calories offered by retailers. Across these two studies we reveal a

substantial and unmistakable calorie disclosure effect for menu labels; disclosure results in both

fewer calories selected (-27 Calories) and fewer calories offered by retailers (-15 Calories).

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The increasing rate of obesity has become a major cause of concern in the world we live

in today. With over 30% of American adults aged twenty and over classified as obese (Clarke

et al 2016), and with the World Health Organization (WHO) estimating that 2.8 million (5%)

of global deaths are directly related to obesity (WHO 2011), innovative approaches in avoiding

and remedying obesity are urgently needed. In addition to a portfolio of interventions focusing

on individual and parental education to encourage personal responsibility for food consumption

(Dobbs et al 2014), restaurants and other retail food outlets are the latest recruits in the fight

against obesity.

Experts estimate that Americans spend over half of their food dollars on meals

purchased away from their home. (ERS Food Expenditure Series 2016), with restaurant food

sales valued at $799 Billion (National Restaurant Association 2017), and that food away from

home accounts for an average 33% of an individual’s total consumed calories (Powell et al.

2012). Given these figures, the retail food establishments are a critical aspect of the atmosphere

that can contribute to the prevalence, and more importantly, the prevention of obesity in a given

population.

The World Health Organization recently called for a stress on the provision of retail

food establishments to encourage their customers to make healthier food choices (WHO 2016).

Some strategies that food retailers can implement in influencing consumers into eating better

include: the provision of smaller sized servings, in-store signage, e.g. drawing attention to

healthier choices; structure, e.g. changing store layout and organization to prompt heathier

product selections; and service e.g. making electronic aids and apps available to consumers

Another strategy involves the provision of nutritional information at the point of purchase to

enhance a consumer’s ability to control their own behaviors when it comes to food choices.

In response to the to the call to providing calorie counts on menus so that consumers

could make better choices, legislation (part of the Patient Protection and Affordable Care Act)

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was passed in 2010, requiring restaurants in the United States to include calorie information on

their menus. Prior to the legislation, some cities like New York and states like California had

passed their own laws requiring the posting of nutritional information on menu boards in chain

restaurants. According to the legislation, menu boards are required to list the name of every

menu item on offer, including options like meal combinations, and the calorie counts for each

(FDA 2014). Those who support the legislation argue that consumers are often ill-informed, or

underestimate, the nutritional content of the food they are purchasing. Hence, equipping

consumers with caloric information will encourage them to make better food choices.

The legislation applies to retail establishments that are part of a chain with 20 or more locations.

It also covers grocery stores that sell prepared foods that also have twenty or more locations.

The initial cost of implementing the proposed menu changes is estimated to exceed $388.43

million for food retailers, with an ongoing cost of compliance of $55.13 million (FDA 2014).

In the present research, the efficacy of the new legislation is examined. First, a summary

of existing research is explored to see the effect of calorie labeling initiatives. When reviewing

previous efforts of researching the existing literature on menu labeling initiatives, it is shown

that existing studies have significant methodological shortcomings. In particular, many reviews

are not of a meta-analytic nature because they are more in a conceptual nature, and those that

are quantitative, suffer from potential biases. The biases include lack of control for moderating

variables in the meta-analysis and strong limitation in synthesized studies resulting in small

sample sizes (6–38 studies). These two problems make it difficult to come to conclusions about

general effects of calorie disclosures.

To shed light on the overall calorie disclosure effect, a meta-analytic approach using

multilevel modeling techniques must be used. This meta-analysis method accounts for the

potential sources of bias mentioned above and relies on 186 synthesized cases (representing an

analysis of 1,677,265 consumer choices). The meta-analysis accounts for various sources of

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heterogeneity by including moderators into the model and by capturing dependencies imposed

by the nested structure of experiments from the same authors as well as situations where

multiple interventions are compared to the same control condition, thus further reducing bias in

estimates (Neumann and Böckenholt 2014; Janakiraman, Syrdal and Freling, 2016). The

findings based rhe robust estimation indicate a significant and unequivocal calorie disclosure

effect for menu labels on consumer behavior: consumers select fewer calories following

disclosure.

The Effect on Consumer Behavior

Multiple studies have investigated the impact of mandatory calorie disclosure on

restaurant menus across many academic disciplines but have reached little consensus as to the

overall effect the legislation has on consumers. For example, Bollinger et al. (2011), Roberto

et al. (2010), and Hammond et al. (2013) conduct experiments illustrating that calorie disclosure

reduces energy consumption. In contrast, Schwartz et al. (2012) and Downs, Wisdom, and

Lowenstein (2015) perform field experiments and find no significant calorie reduction related

to changes in consumers’ food choices. The observational results of Dumanovsky et al. (2011)

and Girz et al. (2012) suggest an increase in calories consumed following disclosure.

It is not only individual studies which have come to conflicting conclusions regarding

the magnitude of the effect of calorie count labeling on a customer food choice. Eight studies

synthesized experimental research on calorie consumption measures. Some reviews report that

disclosure is effective in reducing the number of calories selected for a meal. For example,

Littlewood et al. (2016) find that the results of their review show a “statistically significant

effect” of menu labeling where overall calories ordered was reduced by 100 Calories. Long et

al. (2015) found a much smaller but also significant decrease of 18 Calories selected per meal.

Yet, Sinclair et al. (2014) found no significant reduction in their review of studies that tested

calorie content labels.

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What could explain the contradictions in research findings on the influence of calorie

disclosure? After reviewing the nine summary studies, there seem to be several key

observations that provide plausible explanations about the mixed results among the existing

reviews. First, five of the eight studies (Harnack and French 2008; Swartz et al. 2011; Lazareva

2015; Fernandes et al. 2016; Van Epps et al. 2016) represent qualitative reviews where the

research team summarized experimental data under the lens of several key criteria, often

subjectively grouped by two to three raters. We also find that three review studies that represent

traditional quantitative meta-analyses were based on low sample sizes between 12 and 19

reported effect sizes (Littlewood et al. 2016; Long et al. 2015; Sinclair et al. 2014). Any

outcomes based on such a small number of effect sizes could be biased because of sampling

variance. When reviewing the three studies more closely, we find that the selection criteria of

these reviews have been limited in terms of regions, publication status, years of publication,

and labeling methods. These sampling limitations reduced the pool of synthesized studies and

may have created an unrepresentative subsample of all available studies.

To address issues concerning generalizability of the results from existing quantitative

reviews and to shed light on the overall effect of calorie disclosure on consumer food choices,

we remove the restrictions above and perform a comprehensive meta-analysis of 186 Calorie

label intervention versus control (no intervention) comparisons

Study 1: The Effect of Calorie Disclosure on Consumer Behavior

Meta-Analysis Method

Intervention and Study Characteristics

A study was deemed eligible for inclusion in the meta-analysis if it involved a disclosure

of calorie information on a restaurant menu as an intervention. Studies included in the analysis

were not restricted to a particular food category or eating occasion. Studies examined the

selection of both food and beverages, and these were across both unhealthy (e.g., Lee and

Thompson 2016) and perceived healthy (e.g. Kreiger et al. 2013) categories. Studies were

included that collected data only at lunch (e.g., Temple et al 2011), only at dinner (e.g., Liu et

al 2012), or across different meal times (e.g., Vanderlee and Hammond 2013). Furthermore, for

the purpose of the analysis, retail restaurants were defined as either quick-service (e.g.,

Yamamoto et al. 2005) cafeterias (e.g., Holmes et al. 2013) or table service (e.g., Fotouhinia–

Yepes 2013), exploring a labeling intervention in a fine dining restaurant and Liu et al (2012)

exploring a labeling intervention in a table service restaurant chain (Chilli’s).

A total of 186 studies reported in 54 articles representing 1,677,265 meal choices were

included in the meta-analysis (see Appendix C for a summary of effects sizes for the included

studies). Of the studies included in the meta-analysis, 68 percent reported a reduction in calories

(ranging from – 400 Calories (Temple et al 2011) to -1 Calorie (Pulos and Leng 2011). For

studies reporting an increase in consumption, the range varied between 1 Calorie (Lee and

Thompson 2016) and 217 Calories (Temple et al 2011).

Table 1

Study 1: Coded moderators and prevalence