The Promise of Menu Labeling

I think you can raise rather a lot of money from things like soda taxes. But I don't think you'll do much to change eating habits that way. Menu labeling, however, is much more interesting. The reason is not, as some think, that individuals will make radically different decisions because they can see calorie content when ordering a burger (they might make slightly different decisions, but the evidence, as of yet, is mixed). It's that restaurants might make different choices when individuals can see the caloric content of their meals.

Restaurants know that consumers have no effective way of comparing the caloric content of meals. Diners know, of course, that a burger is worse for you than a banana. But eggs cooked in a vat of butter look like eggs cooked in very little butter. A salad with a dressing that adds 600 calories looks like a salad with a dressing that adds 300 calories. People return to restaurants for taste and price and ambiance, because that's what they can measure. So restaurants jack up the caloric content pretty heedlessly.

If menu labeling is passed, however, and consumers exhibit any preference toward relatively less fattening items, that creates an incentive to reformulate those items to be less fattening. California, which recently passed a labeling law for restaurants with more than 20 locations, is seeing this happen. The Macaroni Grill, for instance, just cut its scallop and spinach salad from an astonishing 1,270 calories -- do they grow the spinach in butter? -- to 390 calories. Denny's has slimmed down its Grand Slam breakfast. And the law hasn't even gone into effect yet.

But this is exactly the response we'd expect. The Macaroni Grill's example is a good one. Ordering the spinach and scallop salad is the sort of thing that you'd do if you were watching your calories. But since you didn't actually know how many calories were in the dish, the Macaroni Grill could make it delicious and filling and fatty and you really weren't any the wiser. That made the Macaroni Grill more attractive to healthy eaters even as it was actually tricking them. Now customers will know the caloric content, and so the Macroni Grill reformulated the dish so it's more in line with diner preferences.

Menu labeling, in other words, has the potential to not only change what diners choose, but what they're offered. And that could be where its true promise lies.

Photo credit: Ed Ou -- Associated Press Photo .