On March 3, 2010 the Health Care Reform Bill became a law in America, and at 2,016 pages it is a long and complex one. Preventing health insurance companies from denying Americans coverage on the basis of a previously-existing condition, and the mandatory procurement of coverage are some of the better-known aspects of the law, however several other topics were covered in it as well.
Section 2572, a small clause buried within the Health Case Reform Bill is certain to be of particular interest to restaurant operators, particularly those in the quick service and fast casual segments. Designed to help consumers make better food choices, the law states that restaurants with more than 20 locations (irrespective of ownership) will be required to display the caloric information of items on restaurant menus, menu boards, and drive-thru displays. Additionally, restaurants will also have to provide the nutritional requirements in an adjacent location.
To date, a number of areas in the county have already enacted menu labeling laws, most notably in New York City, Seattle and in California, which was the first state in the nation to pass menu labeling legislation back in 2008. By setting one consistent national standard, the National Restaurant Association says the new law will help consumers make better choices for themselves and their families.
"It will simplify what has been a complicated issue of cities coming up with their own menu labeling laws," says Dan Turnquist, CFO of Wendy's FourCrown, operator of more than 50 Wendy's locations in and around the Twin Cities.
Although details are still being crafted by the Food and Drug Administration for specific requirements, it is clear that there will soon be a need for restaurant operators to dramatically redeploy their menus to ensure compliance.
Digital signage to the rescue
To meet this compliance, some restaurant owners may opt to purchase digital menu boards, which allow for content to be rotated. With the additional nutrient and caloric information that must now be displayed, a digital medium can significantly expand display space. Limited Time Offers (LTOs) lasting less than 60 days will be exempted from the new calorie and nutrient labeling requirements. Test products will enjoy a similar, up to 90 day exemption as well.
A key benefit to using digital menu boards is that content can be rotated in and out of a digital menu in seconds, remotely through the Internet, and it does not involve the printing costs of plastic strip materials, or the appreciably larger turn-around time.
For Wendy's FourCrown, who is currently using digital menu boards in a number of their locations through a partnership with WAND Corporation, the need to display nutritional content on their menus can be met with ease when the law officially takes effect. "In the restaurant business one person says your menu boards are going to look like this. We are in a position where we can reset to whatever format Wendy's International has, as opposed to ordering menu strips that will include all of this content. We can reset in a number of days as opposed to months. You do not have to restructure a hard menu board," says Turnquist. "It would be a very low cost for us to add this information."
What's more, at the end of its product lifecycle, a digital menu may also be recycled, thus contributing much less mass into the waste stream. Several professional-grade digital signage companies already exist and while a few of them are already able to implement nutrient and caloric reporting it is expected that most of the others will catch on in the months ahead.
Given the additional signage space requirements that will need to be met to comply with the new law, a double-digit percentage of restaurant owners and operators are expected to start making the transition in 2010, beginning a ground-swell that will continue into 2011 and 2012. As the cost of ownership drops, the market for large chains is expected to become saturated by the end of the decade.
Full compliance guidelines are expected to be available by the end of July from the Food and Drug Administration.