A new law requiring California restaurants to display nutritional information has some in Orange County anticipating headaches, costs and maybe even a little marketing opportunity.
Starting July 1, restaurants with more than 20 locations around the state will have to offer brochures that detail the nutritional content of their food.
By 2011, restaurants must list calorie and nutritional details on printed menus and menu display boards.
The county has several restaurant companies that will be affected by the law, including Irvine-based Taco Bell Corp., part of Louisville, Ky.-based Yum Brands Inc., Costa Mesa-based El Pollo Loco Inc., Irvine’s In-N-Out Burgers Inc. and others.
The law, which is backed by the American Cancer Society and California Center for Public Health Advocacy, is aimed at fighting obesity by giving diners more information.
San Francisco, Santa Clara and other cities have had menu labeling rules before the state law passed late last year. This is first time OC has been affected.
Restaurant operators are worried about the costs they’ll have to bear due to the law.
Wahoo’s Fish Taco, a Santa Ana-based operator of more than 50 Mexican-style eateries, has offered nutritional information online for years, according to Chief Executive Mingo Lee.
He said he doesn’t have a problem with providing nutritional information online or in brochures. Creating menu boards is a different story, Lee said.
The boards themselves are costly to make, according to Lee. But Wahoo’s also may have to spend money to revamp its restaurants to accommodate new boards, he said.
Lee didn’t disclose how much Wahoo’s might have to spend. He said it likely would be a “huge financial burden” for restaurant chains.
“I just wish there was a middle land for how the information could be available for customers,” Lee said.
Other restaurants have to hire nutritionists to breakdown the nutritional content of their food. That’s the case at Costa Mesa-based Chronic Taco Enterprises, which owns and franchises more than 20 Mexican eateries under the Chronic Taco name.
The process is expensive and lengthy, especially when trying to calculate all of the different variations of menu items, according to cofounder Randall Wyner.
“The nutritionists are expensive and the process takes serious time,” he said. “It’s a pain. But it’s worth it in the long run because people want it.”
Some restaurant companies could fear the law will bring information about unhealthy menu items to light. That could be the case with fast-food restaurants, some of which didn’t return calls for this story.
Chains that offer healthier food might have a leg up, according to Sam King, chief executive of Costa Mesa-based King’s Seafood Co.
The company runs some 10 seafood restaurants in California and is gearing up to meet the new law as it plans to open more locations.
King’s Seafood has hired nutritionists to analyze its menu items, King said.
The new law could help the company’s image as a healthy dining option since a good part of its menu consists of low fat foods such as grilled, saut & #233;ed and raw seafood and vegetables.
“We decided that this is something we’re going to do anyway because it should give us a competitive advantage,” King said.
But critics say the law couldn’t have come at a worse time. The restaurant industry is one of the hardest hit by the recession.
“In general, it’s a consumer-oriented law that is not terribly business minded,” said Mike Rule, a partner at Irvine-based Pepper Hamilton LLP who represents restaurant operators. “Layering on additional costs and potential liability and exposure at this time can only be a bad thing for restaurant companies.”
Companies that have to comply with the law by July will have to spend money on printing brochures and distributing them to their restaurants in California, which isn’t cheap, Rule said.
When it comes time for restaurants to change their menu boards and printed menus, the cost to roll out those to multiple locations also will be taxing, he said.
In addition to the compliance costs, the law contains a number of uncertainties that could put restaurant companies at risk, Rule said.
Restaurants that offer buffet or family-style meals may find it hard to provide accurate calorie details since they will have to determine what “normal” serving sizes are.
Other restaurants that make food to order, such as sandwich shops and burger joints, also will have to go through the costly process of compiling information for many different products, he said.
Too Many Variables
There are variables that come with cooking and assembling food, which could affect a restaurant’s ability to provide accurate nutritional information on all of its products, Rule said.
These factors could create an opportunity for consumer advocacy groups and lawyers to file lawsuits against restaurant companies.
“This law contains a number of uncertainties that could lead to the potential for future litigation,” Rule said.
Many restaurants started disclosing food details before talks about a nutritional disclosure law surfaced, according to Daniel Conway, spokesman for the Sacramento-based California Restaurant Association, which represents more than 20,000 restaurants in the state including fast food chains, small-family eateries and gourmet restaurants.
Despite the costs, many favor the new law over a collection of local measures, Conway said.
The law’s two-part deadline provides some relief for restaurants with multiple locations, he said.
