DEPARTMENT OF HEALTH AND HUMAN SERVICES 
        Food and Drug Administration 
                                 
                                 
                                 
                                 
                                 
                        Food Labeling: 
          Nutrition Labeling of Standard Menu Items in 
              Restaurants and Similar Retail Food 
                         Establishments  
         
                  Final Regulatory Impact Analysis 
                        FDA–2011–F–0172 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                 Office of Regulations, Policy, and Social Sciences 
                   Center for Food Safety and Applied Nutrition 
                          NOVEMBER 2014 
         
      SUMMARY:  The Food and Drug Administration (FDA) is finalizing  requirements for 
      providing certain nutrition information for standard menu items in certain chain restaurants and 
      similar retail food establishments,  to implement the menu labeling provisions of the Patient 
      Protection and Affordable Care Act of 2010 (Affordable Care Act).  The Affordable Care Act, in 
      part, amended the Federal Food, Drug and Cosmetic Act (FD&C Act), among other things, to 
      require restaurants and similar retail food establishments (R/SRFE) that are part of a chain with 
      20 or more locations, doing business under the same name and offering for sale substantially the 
      same menu items, to provide calorie and other nutrition information for standard menu items, 
      including food on display and self-service food.  Under provisions of the Affordable Care Act, 
      restaurants and similar retail food establishments not otherwise covered by the law may elect to 
      become subject to the Federal requirements by registering every other year with the FDA.  The 
      analysis of benefits and costs included in this document is the basis for the summary analysis 
      included in the Food Labeling: Nutrition Labeling of Standard Menu Items in Restaurants and 
      Similar Retail Food Establishments final rule [FDA-2011-F-0172]. 
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       Table of Contents 
       I. INTRODUCTION ........................................................................................................................4 
         A. Summary of Costs and Benefits of the Final Requirements .................................................6 
          Summary of Costs ................................................................................................................6 
          Summary of Potential Benefits ............................................................................................7 
          Summary of Costs and Benefits of Menu Labeling and Vending Machine Rules ..............9 
         B. Need for This Regulation ....................................................................................................10 
         C. Comments on the Preliminary Regulatory Impact Analysis and Our Responses ...............13 
       II. COSTS AND BENEFITS OF REGULATORY OPTIONS .....................................................29 
         A. Baseline: No New Regulatory Action .................................................................................30 
         B. Option 1: The Final Rule .....................................................................................................31 
          Estimated Costs ..................................................................................................................33 
            Cost of Nutrition Analysis ...........................................................................................34 
            Cost of Menu Replacement ..........................................................................................46 
            Cost of Training ...........................................................................................................53 
            Cost of Legal Review...................................................................................................59 
            Cost of Voluntary Registration (Not Quantified) ........................................................60 
            Cost of Voluntary Reformulation (Not Quantified).....................................................61 
            Total Costs for the Final Requirements .......................................................................61 
          Potential Benefits ...............................................................................................................62 
            Translating Changes in Behavior from Menu Labeling into Potential Welfare Gains 63 
            Welfare Estimates ........................................................................................................66 
            Stream of Benefits........................................................................................................76 
            Total Net Benefits ........................................................................................................78 
            Literature on the Potential Effects of Menu Labeling on Consumer Behavior ...........79 
            Alternative Calculation of Benefits (Not Included in Final Estimates) .......................84 
            Other Benefits (Not Quantified) ..................................................................................95 
          Uncertainty of Costs and Potential Benefits ......................................................................96 
         C. Option 2: Limited Scope ...................................................................................................100 
          Costs .................................................................................................................................100 
          Benefits ............................................................................................................................102 
         D. Option 3. Shorter Compliance Time .................................................................................103 
          Estimated Costs ................................................................................................................103 
          Potential Benefits .............................................................................................................104 
       III. REGULATORY FLEXIBILITY ANALYSIS ......................................................................105 
         A. Introduction .......................................................................................................................105 
         B. Estimating the Number of Covered Small Businesses ......................................................106 
         C. Regulatory Options ...........................................................................................................107 
         D. Summary ...........................................................................................................................108 
       IV. UNFUNDED MANDATES ..................................................................................................109 
       V. APPENDIX A .........................................................................................................................111 
       VI. APPENDIX B ........................................................................................................................121 
       VII. APPENDIX C.......................................................................................................................124 
       VIII. REFERENCES....................................................................................................................126 
        
                     
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      I. INTRODUCTION 
         We have examined the impacts of the final rule under Executive Orders 12866 and 
      13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform 
      Act of 1995 (Public Law 104-4).  Executive Orders 12866 and 13563 direct agencies to assess all 
      costs and benefits (both quantitative and qualitative) of available regulatory alternatives and, if 
      regulation is necessary, to select regulatory approaches that maximize net benefits (including 
      potential economic, environmental, public health and safety effects, distributive impacts, and 
      equity). Executive Order 13563 emphasizes the importance of quantifying both costs and 
      benefits, reducing costs, harmonizing rules, and promoting flexibility. This rule is designated an 
      “economically” significant rule, under section 3(f)(1) of Executive Order 12866.  Accordingly, 
      the rule was reviewed by the Office of Management and Budget.   
         In particular, Executive Order 12866 directs each agency engaged in rulemaking to 
      "identify the problem that it intends to address"-- that is, the essential purpose of the rule. As a 
      separate step in its rulemaking, Executive Order 12866 directs the agency to "assess both the 
      costs and the benefits of the intended regulation ... , recognizing that some costs and benefits are 
      difficult to quantify." Executive Order 13563 confirms that "each agency is directed to use the 
      best available techniques to quantify anticipated present and future benefits and costs as 
      accurately as possible. Where appropriate and permitted by law, each agency may consider (and 
      discuss qualitatively) values that are difficult or impossible to quantify.” Here, the essential 
      purpose of the rule is to make nutrition information for certain foods available to consumers in a 
      direct, accessible, and consistent manner to enable consumers to make informed dietary choices. 
      The following analysis of anticipated and quantifiable costs and benefits from the promulgation 
      of the rule does not alter this fundamental purpose.  
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