An Oldie But Goodie Topic: Nutrition Transparency Drives Sales in Most Cases

We already know that nearly half of the American food budget is spent on food outside the home and in the near future nutrition transparency will be part of the dining out equation.

There is no shortage of research supporting that the majority of Americans desire access to nutrition information when they dine out.  But the more important fact to restaurants and restaurant owners, is what does nutrition information mean for sales?

In a 2008 study at the University of Missouri, researchers evaluated how willing customers would be to pay more for the menu items with nutrition information.  The study found that participants were willing to pay on average $2.00 more for a low-fat menu item when nutrition information was provided.  The study concluded that subjects felt that the more nutrition information the menu had, the more preferable it was.

In 2009, an Ohio State University study discovered that when nutrition information was provided at the point-of-sale purchase at a university dining center (similar to a fast food restaurant), the sales of low calorie entrees increased.  More interestingly, the sales of higher calorie items decreased and when the venue removed the nutrition information, higher calorie items once again dominated sales.

A Washington Post story from 2010 detailed some of the success stories beyond a research setting.  For example, the story mentions how a Stanford University study of Starbucks (NASDAQ: SBUX) sales found that at locations near competitor Dunkin’ Donuts (NASDAQ: DNKN), revenue increased 3% after calorie labeling.  The researchers suggested that customers were making decisions between stores and calorie postings may have been (emphasis mine) a primary factor in choosing Starbucks over their competitor.

71% of adult restaurant-goers  state that they want to eat healthier at restaurants.  And who doesn’t (at least, overall)?  But, first things first, Americans want great food.  Typically, we are foodies – first, and personal healthcare advisors second.

We talk to dozens of chefs every day and there are innovations happening everywhere as it relates to making great food, that’s also relatively healthy food.  At this intersection, we think restaurants are going to open up a world of profitability.

At the end of the day, when 71% of adult customers say they want to eat healthier, posting nutrition information may be the first step to meeting their needs in all but the unhealthiest of concepts.  Anecdotally, this is only about 1 in 10 concepts, where we see the menu is so end to end unhealthy that the word “nutrition” will never be a positive.  But look at the flipside, at least 7 in 10 restaurants we talk to are “Strongly Positive” when surveyed about our nutrition transparency programs.

With the Affordable Care Act’s new menu labeling requirement forcing the issue for hundreds of thousands of restaurant locations, it’s time for restaurants to begin profiting from these consumer trends.

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