With Obama-Care, Calorie Counters Find a Strange Ally: Fast-Food Restaurants

×
Fast-food restaurants have surprisingly embraced a bill requiring calorie postings. Part of the health care bill that President Obama signed Tuesday requires all chain restaurants with more than 20 locations to post calorie listings on their menus and drive-through signs. This ruling, which should affect more than 200,000 restaurants from coast to coast, has found a surprising ally: the restaurant industry.

This is a turnaround from the position that the industry took when calorie postings came to New York City in 2008. At the time, restaurants fought the ruling, and the New York State Restaurant Association took the city to court, claiming that the regulation impinged upon its members' right to free speech. The case was eventually struck down and the posting rule went into effect.

Uncomfortable Facts

It's not hard to see why some restaurants had a problem. After all, calorie postings reveal a few uncomfortable facts about what qualifies as a single serving at many fast-food restaurants.

The U.S. Department of Agriculture recommends an average daily intake of roughly 2,000 calories, which works out to roughly 667 calories per meal. Put another way, 2,000 calories is the equivalent of one and a quarter servings of Chili's Chocolate Chip Paradise Pie with vanilla ice cream, or slightly more than two Wendy's 3/4 pound Triple Burgers with Cheese. It is 900 calories less than an order of Steakhouse Aussie Cheese Fries with Ranch Dressing from Outback and 710 calories less than a single Awesome Blossom from Chilis. And even the trusty standby -- salad -- may not fit into the recommended daily caloric intake: Taco Bell's Border Grande Taco Salad with Taco Beef has 1,450 calories.

Yet a strange thing happened after New York restaurants started posting calorie counts. While consumption habits shifted, brand popularity remained strong. While customers may have ordered lower-calorie foods, they still bought it from their favorite fast-food restaurants.

Noting that lower-calorie items were more popular, many restaurants voluntarily changed their menus and ingredients, increasing their slate of healthier choices and lowering the calorie impact of many common ingredients.

Steering Shoppers to Profitable Items


And as an increasing number of states began contemplating and passing calorie-count legislation, some restaurants decided to jump ahead of the curve. By the end of 2008, Yum Brands (YUM), the corporate owner of Pizza Hut, KFC and Taco Bell, had announced plans to post calorie counts at all of its restaurants. In fact, when Congress considered the current law, many restaurant chains -- and even the National Restaurant Association -- supported it.

The lesson seems clear: Instead of spelling the end for the fast-food industry, calorie counts can be a tool for steering consumers toward lower-calorie -- but equally high-profit -- offerings. Franchise restaurants that can bend with the changes in the industry could find that the new law will actually help them get ahead, without expanding their customers' behinds.

Increase your money and finance knowledge from home

Introduction to Value Investing

Are you the next Warren Buffett?

View Course »

Portfolio Basics

What are stocks? Learn how to start investing.

View Course »

Add a Comment

*0 / 3000 Character Maximum