Food Labeling

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Food manufacturers provide much information about the attributes of their products, such as comparative prices and taste, convenience, and nutrition. Labels can provide further information to consumers, increase demand for producers' brands, and promote the marketing of new attributes of products. However, if all labeling information was provided only voluntarily, some information that would be valuable to consumers might not be included. Food suppliers might not offer much information about product attributes that consumers would view as negative, such as nutrition and health information linking consumption of a particular food with a risk of adverse health outcomes.

Food labeling is an area where the Federal Government uses regulatory mechanisms to give consumers more-informed choices where suppliers have no financial incentive to provide full and accurate information about their products. By mandating disclosure of certain nutrients on the food label, the Federal Government increases consumers' access to this information. Such labeling may help consumers make food selections that better reflect their preferences or encourage them to choose more nutritious foods. Or it may lead suppliers to reformulate food products to include more healthful attributes. However, mandated labels can still be misleading; consumers may not fully understand label claims, and instead of improving societal outcomes, labels may increase inefficiency in the marketplace. In summary, questions linger about what information should be provided and who should provide it (public or private sector) so that information helps solve the coordination problem of matching diverse food demands with food supplies.

ERS studies whether consumers have enough information to make informed food choices, what the private sector can do to provide informative food labels, what role the public sector can play in providing information, and the costs and benefits of mandatory labeling in the food-at-home and food-away-from-home sectors.

Food package nutrition labels

The Nutrition Facts Label (NFL), mandated through the 1990 Nutrition Labeling and Education Act (NLEA), is a familiar feature on packaged food. The label has changed only slightly since its inception in 1994, with trans fat added in 2006 to the nutrients required to be listed. In a 2012 report, ERS researchers found that between 2005 and 2010, the trans fat content of food declined, and the number of products marketed as containing no trans fat increased. These results suggest that mandatory disclosure of ingredients that have the potential to cause harm to human health can lead food manufacturers to reformulate their products to make them healthier.

New Food Choices Free of Trans Fats Better Align U.S. Diets With Health Recommendations

In 2016, the Food and Drug Administration (FDA) released revised rules for the NFL to help make the information on labels easier for consumers to understand and more relevant to today’s nutritional needs. (Changes to the Nutrition Facts Label). Manufacturers with $10 million or more in annual sales were required to switch to the new label by January 1, 2020; manufacturers with less than $10 million in annual food sales had until January 1, 2021 to comply. Future research can investigate whether the changes improved the diet quality of U.S. consumers.

A vast set of other label claims on food packaging

ERS research analyzes how nutrition information can create new markets for food attributes, especially those related to farm production methods.

The share of new products that included voluntary health- and nutrition-related claims on the package decreased between 1989 and 2001 from 34.6 percent to 25.2 percent, following the introduction of the NFL. However, between 2001 and 2010, the share of all new products with such claims increased to 43.1 percent. A larger share of these claims focused on highlighting no- or low-calorie items, whole grains, high fiber, and no- or low-sugar content, as well as the absence of gluten, trans fats and the addition of higher levels of antioxidants and omega-3 fatty acids.

Introduction of New Food Products With Voluntary Health- and Nutrition-Related Claims, 1989-2010

Another ERS report presents case studies of five food labels in which the Federal Government played a role, showing the economic effects and tradeoffs in setting product standards, verifying claims, and enforcing truthfulness. In addition to the NFL, the report examines the USDA organic label, the raised without antibiotics label, the non-GMO label (advertising foods made without genetically engineered ingredients), and the Federal country-of-origin label (COOL).

Beyond Nutrition and Organic Labels—30 Years of Experience With Intervening in Food Labels

Restaurant menu labeling

Motivated by an increase in U.S. consumption of foods prepared away from home and their effect on diet quality, the Patient Protection and Affordable Care Act of 2010 authorizes the FDA to set uniform customer information requirements for restaurants with 20 or more locations under the same name offering similar menu items (Menu Labeling Requirements). Businesses covered by the regulations were required to comply by May 7, 2018. Although some restaurants posted this information voluntarily and others posted in response to State or local requirements, the new law supersedes any State or local legislation. The following reports provide more information about the effect of food away from home on diet quality:

The effect of this national labeling requirement on diet quality is not yet known, as many factors influence food choices, especially when dining out ("Will Calorie Labeling in Restaurants Make a Difference?"). For example, ERS research found that during 2007–10, those who ate out more often were less likely to use restaurant calorie and nutrition information than those who ate out infrequently and using that information in restaurants was correlated with higher diet quality at home.

Consumers' Use of Nutrition Information When Eating Out

Another ERS study found that those who used restaurant nutrition information between 2007 and 2014 consumed fewer total calories per day than those who noticed but did not use such information.

The Association Between Restaurant Menu Label Use and Caloric Intake

Research investigating the impact of State and local menu labeling requirements implemented between 2007–11 found evidence that mandated information reduced the impact that meals prepared away from home (FAFH) had on daily calorie intake (Todd, J. et al., 2021."Food Away From Home and Caloric Intake: The Role of Restaurant Menu Labeling Laws," Economic Inquiry, 59(1):53-71.) Specifically, the study estimated that the effect of a FAFH meal on total daily intake is reduced by 21 calories among adults and by 34 calories among young children for each year the subnational mandates were in place, which are large enough to reduce body weight over time.

Other research found that body weight declined following New York City’s menu labeling law ("Body Weight Fell Following Mandatory Calorie-Labeling Laws for New York Restaurant Menus"), which suggests that the national law may help to lower obesity in the U.S.