With growing concerns on obesity in North America, having calorie counts prominently displayed in restaurants is also a growing trend. In 2008, New York City put forth a law requiring menu labeling. Since then, Panera began posting calories in all US restaurants in 2010 and McDonald’s USA followed suit in 2012. The FDA has been proposing adding calories to the menu for years (at one time, it was supposed to take effect in 2013) and is now expected to take effect by May 5, 2017.

With the passing of the “Making Healthier Choices Act” in 2015, Ontario’s government will also require (as of Jan. 1, 2017) that food establishments with 20 or more locations prominently display the calorie amounts on the menu or menu display board. Smaller eateries are exempt due to the costs of meeting the new requirements. While many restaurants in Ontario currently provide access to nutritional information either on their websites or in brochures, the requirement will put calorie counts in front of customers’ faces in 2017.

Other provinces are also interested in passing similar kinds of rules as we’ve seen the voluntary “Informed Dining” program emerge in British Columbia and talk about similar legislation in Nova Scotia and Quebec. The question isn’t “Will it affect me?” but “How will it affect me?”

  1. You’ll have an upfront cost to implement

From the design to the implementation of new menu boards, there is certainly a cost associated with adding calories to the menu. Depending on your current menu solution, it may affect you differently. For restaurants with printed menus, it’s a layout change and reprint of the menu or menu panel. For restaurants with digital menu boards, printing costs may not be incurred, but there may be costs associated with modifying and redesigning the digital program.

  1. Space on the menu will have a higher premium

Inherently, menu design will be less flexible with the addition of calories. In the past, you may have included a lengthy description of your entrees or included pictures. With the addition of calorie counts to the menu, this now requires precious real estate on your menu. For brands with extensive menus, this may prove very difficult to incorporate while maintaining some level of readability.

  1. Customers will now see calorie counts…

The effect of calorie inclusion on menus is debatable. A 2014 University of Toronto study showed that 75 percent of Canadians want to see nutritional information on the menu. A recent study by New York University that compared purchasing patterns of McDonald’s, Burger King, Wendy’s and KFC customers in New York City (where calories are labelled) to those of customers in New Jersey (where calories are not labelled) concluded that calorie consumption was essentially the same between both groups, despite visibility of those calories in one state vs. the other. At RMS, the impact of calories displayed on the menu board is also debatable. We’ve sometimes seen an initial bump in the sale of salads or other food perceived as “healthier” when clients have transitioned to displaying calorie counts, but after a month or so, customers go right back to purchasing what they love to eat. This may differ depending on segment; in QSRs, customers only have so many seconds to make a decision, whereas in fine dining, customers may mull over their decision with the menu in front of them for quite some time, which has often led to the reduction in add-on items (such as alcoholic beverages, appetizers, or desserts).

Other studies have shown that parents of children order lower calorie food for their children once calories are posted.

  1. Your brand might reconsider items on the menu and their recipes

Brands may reconsider which products are offered on the menu and tweak ingredients to provide customers with healthier options. One example might be to now advertise an option to add a side salad to a meal instead of fries. Another, to look at the ingredients of a product and find a way to lower the calorie amount without sacrificing taste and without significantly impacting costs. If customers quit purchasing a very high calorie item in your restaurant, you might also see that item disappear from the menu altogether.

  1. Average check may increase

For years, items with a “healthy halo” have demanded a premium over items perceived as less healthy. “Healthy” is certainly on trend as we’ve seen the creep of yoga pants into everyday attire. If menu labelling does incite customers to purchase “healthier” options and these products are priced appropriately to encourage trade into them, average check may increase.

The full effect of the legislation going into effect in Ontario is yet to be determined but we’ll soon see restaurant operators making changes to come into compliance. And if it’s happening in Ontario, we’ll likely see this spread throughout the country- not a question of “if” but “when.”

To read up on the studies and legislation I’ve mentioned here, check out the below links:

http://www.news.com.au/finance/business/breaking-news/questions-raised-about-menu-calories/news-story/57b0315f49dd6e79cc8dec19bae97c56

https://www.scientificamerican.com/article/calorie-labeling-menus/

http://www.cbc.ca/news/business/calorie-count-restaurant-menu-1.3535873

Author

Holly Simmons is Director, Consulting Services at Revenue Management Solutions. She oversees a team of associates servicing clients throughout North America in the areas of analytics for pricing and promotions. Simmons earned her MBA from Florida State University. For more information about RMS, visit http://www.revenuemanage.com.