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Scott Davis

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Calorie Labeling: Take the Plunge

Posted: 03/22/2013 6:02 pm

Three years since the passage of the law meant to require calorie labeling, the Federal Government is reportedly having trouble carrying out the new requirements (AP, March 12, "FDA Head Says Menu Labeling 'Thorny' Issue"). In part, the AP says, that's because of the resistance of supermarkets, convenience stores and other retailers selling prepared food.

I find that resistance fascinating, because at Panera Bread we voluntarily undertook calorie labeling three years ago at all our now-more than 1,600 company-and franchise-owned bakery-cafes across the country. And since then we've only enjoyed record revenues and profits every year and seen our stock price double, making it one of the best performing stocks in the industry. Terrible, huh?

Nonetheless, I can understand the reluctance of many in the food industry to post calorie counts at the point of sale. There's a big difference between posting the information on a web site or printing it on a food wrapper -- which many of the companies offering opposition to the new requirement clearly don't mind doing -- and posting it in front of the customer at the point where the purchasing decision is made. It's one thing, in other words, to disclose information where it probably doesn't matter; it's another to put it in people's faces at the point of impact.

At Panera, we were uncertain ourselves how posting calorie counts on our menu boards would affect our business when we made our decision to be the first national concept in the restaurant industry to do so. Would customers start shunning higher-calorie items? As anyone who has visited one of our bakery-cafes knows, we do offer some items of that type -- especially in our selection of baked goods. So we had reason to wonder: Would sales and profits fall?

We felt obliged to take the risk anyway. We have a policy at Panera: "Food you can trust." That means, among other things, that our products taste great and are reasonably priced. It also means that our menus feature antibiotic-free chicken, whole-grain bread, and select organic and all‐natural ingredients. But beyond that, we decided, "Food you can trust" means something about our relationship with our customers. They have to trust us. We knew our customers want to be smart about their nutrition. And we felt they have the right to make their own informed decisions. So we didn't want to be in the position of withholding the data they needed to make such decisions at the one place where they could use it best.

We also believed that in today's wired world, trying to withhold information is an increasingly futile and benighted strategy. As not only businesses, but governments around the world, can increasingly attest, we live in the age of transparency. Sooner or later, your customers are going to know everything they want to know about you anyway.

So what happened after we posted calorie counts on our menu boards all over the country? The short answer is, not much. Most customers paid no attention whatsoever to the new information. Perhaps for those millions of people our food is simply too mesmerizing.

But for those who did pay attention, it was a huge hit. These customers expressed deep appreciation for having been given the freedom to make intelligent choices. That didn't mean they all started shunning our pastries and sweets. It meant they loved being armed with the knowledge to make their own intelligent decisions about them. They loved knowing exactly what choosing that carrot cake with walnuts meant for their diet that day, and therefore how they might want to alter their diet later in the day, or the next day. They loved being respected with the facts, and being empowered with them.

And a few of them did make different choices. We witnessed a slight migration to lower-calorie soups and salads. But the impact of that shift on our sales and profits was neutral.

Other decisions obviously have also played into this performance, but our takeaway is this: Trust your consumers. Treat them with respect. If it turns out you have to make some changes in your product to earn their continued loyalty, make them. You're not going to be able to hide the facts about your products indefinitely anyway.

And maybe, just maybe, it makes more sense investing your energy in adding more healthy options to your offerings than trying to resist the inevitable.

Because if you don't think today's consumers crave nutrition information and healthy choices, have you talked to any 20-year-old women lately? Or even some of their boyfriends?

Scott Davis is Executive Vice President and Chief Concept Officer of Panera Bread Co.

 
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