This section provides information on:
- Food package nutrition labels
- A vast set of other label claims on food packaging
- Restaurant menu labeling
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 the 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 1990 Nutrition Labeling and Education Act required standardization of the health and nutritional information food manufacturers provide to consumers on food packages. The Act also established rules governing voluntary health claims, standardizing which could be used and under what circumstances. The Food and Drug Administration (FDA) developed the Nutrition Facts Label (NFL) food manufacturers place on their products to comply with the law.
The NFL, mandated through the 1990 Nutrition Labeling and Education Act, is a familiar feature on packaged food. The label has changed only twice since its inception in 1994. The first change was in 2006 when trans fat was added 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 harm human health can lead food manufacturers to reformulate their products to make them healthier. In complementary ERS research, studies also showed that blood levels of trans fats among adults and youth fell from 1999 to 2010, which could have been driven by a mix of consumer and producer behavior changes in response to the 2006 trans fat disclosure regulations.
New Food Choices Free of Trans Fats Better Align U.S. Diets With Health Recommendations
Blood Levels of Trans Fats Among American Adults Fell From 1999 to 2010
Trans Fat Levels Among U.S. Youth Fell From 1999 to 2010
In 2016, the FDA finalized a rule requiring labels it regulates to use a revised NFL by 2021. The revised label reflects scientific research and dietary recommendations available as of the 2016 final rule, as well as aims 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. In 2017, the Food Safety and Inspection Service (FSIS) followed suit with a proposed rule to revise the NFL on meat and poultry product labels. Labels regulated by FSIS can voluntarily use the revised FDA NFL, while FSIS works to finalize its own regulation.
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
Front-of-package labels convey a wide variety of information. Some labels describe how a product was grown, raised, harvested, processed, or packaged—for example, “raised without antibiotics.” Other labels describe the product’s specific internal characteristics—such as color, taste, quality, or nutritional content—for example, nutrition- and health-related claims such as “low-fat.” Still others describe credence attributes, which cannot be seen, felt, or experienced by consumers, such as naming the product’s country of origin.
Some claims are mandatory, like requiring country-of-origin labels for some foods. However, most labels are used voluntarily with varying degrees of Government involvement. For example, food producers can label their products “organic” if their production practices are certified as meeting USDA’s complete regulatory requirements for environmental stewardship. USDA allows meat, poultry, and egg products to be labeled as “natural” as long as the producer states the food does not contain artificial ingredients and is only minimally processed (i.e., the food was processed in a manner that does not fundamentally alter the product). The FDA regulates which nutrition- and health-related claims can be made. Some claims, such as “made without genetically-engineered ingredients,” are not Federally regulated.
ERS research analyzes how nutrition information can create new markets for food attributes, including those related to health, nutrition, and 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. Growth in these claims after 2001 reflects increases in claims for no- or low-calorie items, whole grains, high fiber, and no- or low-sugar content, along with new claims related to the absence of certain attributes (e.g., no gluten and no trans fats) and the presence of others (e.g., high antioxidants and high omega-3 fatty acids).
Introduction of New Food Products With Voluntary Health- and Nutrition-Related Claims, 1989-2010
U.S. food suppliers sometimes use a label claiming the food is “natural” to signal that nothing artificial was added and the product was minimally processed. Some consumers equate the natural label with healthier food choices. Therefore, ERS researchers estimated how frequently food suppliers make this claim on packaging labels. In 2018, 16.3 percent of retail food expenditures were for natural-labeled foods across all categories. However, natural claims were not uniformly distributed across food categories. Dairy had the highest frequency of natural claims in 2018, with 27.7 percent of retail spending on dairy products going to foods with natural labels.
The Prevalence of the “Natural” Claim on Food Product Packaging
Consumers sometimes see a mix of different claims on the same food product packaging, including claims about human health (such as low fat), environmental stewardship (such as USDA Organic), and the types of inputs used in making the food (such as non-genetically modified organism (GMO) ingredients). The presence of a variety of claims could divide consumers’ attention and cause confusion. ERS researchers examined the prevalence of competing and complementary claims in a case study of dairy product packaging. In 2022, they found that multiple claims appeared on 59.3 percent of milk universal product codes (UPCs) and 68.1 percent of yogurt UPCs. They also examined the types of claims commonly appearing together or separately and found many interesting patterns. For example, USDA Organic claims and natural claims typically did not appear on the same products, whereas USDA Organic claims and non-GMO claims usually did.
An ERS report presents case studies from the past 30 years of five food labels in which the Federal Government played a role, illustrating 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.
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 (FAFH) 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 it in response to State or local requirements, the new national law supersedes any State or local legislation. An ERS study found that in 2022, about one in two U.S. adults reported noticing calorie labels the last time they ordered food in a fast-food or sit-down restaurant ("Calorie Labels at Restaurants: Half of Adults Notice, but Some More Than Others"). The following reports provide more information about the effect of FAFH on diet quality:
- The Impact of Food Away From Home on Adult Diet Quality
- How Food Away From Home Affects Children's Diet Quality
The effect of national restaurant menu labeling regulations 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
An 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. For example, fast-food restaurant menu-label users consumed 180 fewer total calories per day than nonusers, while full-service restaurant customers who used menu labels consumed 167 fewer total calories per day.
The Association Between Restaurant Menu Label Use and Caloric Intake
ERS research investigating the impact of State and local menu labeling requirements implemented between 2007 and 2011 found evidence that mandated information reduced the impact that 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 ERS 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.