I walked into a Starbucks in Manhattan the other day and noticed that the food in the glass display case now lists three key facts: the name of the item, the price, and the calories. This last fact is new. It is the result of a recent New York City regulation that requires chain restaurants — those with 15 or more outlets in the city — to list caloric information.
Starbucks had a nice-looking (and huge!) apple fritter in the glass case that went for 490 calories. A slice of pound cake was just a bit less; I think the bagel cost 220 calories. When I asked the clerk about the new calorie info, she told me the signs had just gone up a few days earlier. I asked if she’d seen any changes. She wasn’t sure, she said, but she thought there was a bit less demand on the high-calorie items. A few days later, the Times published an article on the subject.
It struck me that this new regulation presents a great opportunity for obesity researchers. If you could get good data, I’m guessing we could learn a lot about how a posted calorie count affects eating behavior, with all sorts of wrinkles:
+ How calorie-sensitive are people in general, and are they more so during different times of day, days of the week, or types of days (holiday vs. workday, bad weather vs. good, etc.)?
+ If a posted calorie count does shock people into buying/eating differently, how long does that shock last?
+ There’s also a lot of experimentation to be done, including: altering the size of the calorie count on the signs and/or perhaps using different icons (smiley faces?) to differentiate between high-, medium-, and low-calorie foods. You could, of course, also experiment with using images like an obese person vs. a skinny person, or perhaps just a blob of fake fat to represent high-cal., but since we are talking about companies that sell food, I doubt they’d be interested. Maybe Brian Wansink would be, however.
It would also be interesting to see how calorie signs affect demand for lower-calorie foods. While on the surface, the New York City regulation might seem like bad news for restaurants, I could imagine it turning out to be good news if it stokes such demand.
Imagine that Starbucks figures out that most customers don’t want to buy any single piece of food that has more than 250 calories. No one is buying that delicious 490-calorie apple fritter any more (which, for the sake of argument, we’ll say costs $3). What if Starbucks cuts the portion size by 50 percent but sells the new fritter for 80 percent of the original price — i.e., a 245-cal. fritter for $2.40.
That means Starbucks is taking in $4.80 for every 500 calories of apple fritter it sells, versus just $3 in the old days. You might think that $2.40 is a lot for a half-size fritter — but if people turn out to be more calorie-sensitive than they are price-sensitive, Starbucks and a lot of other restaurants may be end up celebrating the day that New York City tried to rein them in.
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But the cost to Starbuck is not measured in calories or even in ingredients.
The labor to sells the fritter is exactly the same. The labor to put it out on display is the exactly the same. The cost of promoting the fritter is the same.
Where does Starbucks save money on selling a smaller fritter? Yes, ingredients, but that’s pennies. Transportation? Is there much savings there?
Keep in mind that fast food joints are happy to sell a MUCH larger soda for just a few cents more because the marginal cost of increasing the size of the soda is so low. I have no question that fitter ingredients are more expensive than soda ingredients, but I’d be shocked that it would be enough to make this worth a money maker for Starbucks.
So, with that in mind, some alternative interesting questions:
* If companies create smaller servings for lower calories, how much do they lower prices, if at all? What are the significant IVs?
* To what degree, if at all, do reduced portion sizes at the same price lead to diminished sales?
It’s not a matter of saving ingredients, it’s spreading them out. A smaller fritter means you can sell more units that are not priced proportionately to their sizes.
You’re probably very right about the size of yummy snacks getting smaller and the price per calorie increasing. In Canadian vending machines, Dasani water bottles are sold in 591mL for $1.75 and a few years ago they introduced mini water bottles (300mL i believe) for $1.25.
…Clearly not a one-to-one ratio.
@mgroves
The cost to do the testing to determine caloric content for an entire menu would be prohibitive to a small mom-and-pop shop. Same reasoning as to why some laws only apply to employers with X number of employees or why certain laws apply only to landlords with X number of units.
This seems to be a classic “nudge.” I can’t count the number of times that I’ve been shocked when I’ve found out the calorie value of some of the staples of my daily diet that I had assumed were harmless (e.g., bagels or tortillas). Having this information right in front of the consumer would certainly facilitate informed decisions.
“If a posted calorie count does shock people into buying/eating differently, how long does that shock last?”
That hasn’t stopped anyone from eating at McDonald’s and they even post the trans fat content on the containers.
People also need to figure out not all calories are created equal. 100 calories of normal fat is much healthier than 100 calories of sugar and is less likely to make you fat because it digests slower. People need to realize that sugar and simple carbs are the primary causes of obesity and heart disease in this country.
To support anti obesity campaigns, there could be a tax on calories (on servings above certain level), which could also impact the calories you are willing to intake and help you with your health.
Victor:
The evidence as to the “primary cause of obesity in our society” is mixed at best. Indeed people have been eating sugar and simple carbs for hundreds of years. Ireland subsisted almost entirely on potatoes for a generation. You can’t just point to one cause and say, “that’s it”.
Jose:
Obesity is not simply a matter of eating fewer calories. Studies have shown that overweight people often do not eat more than normal people. Genes and environment (stress) play a huge role.