Restaurants and calories

There was a piece in the Wall Street Journal last week by Julie Jargon describing how restaurants have begun to count calories.  The article focuses on restaurants' efforts to develop lower calorie dishes that taste good and to advertise the fact that there are lower calorie dishes.  There is impending legislation that would require restaurants to label their items with calories.  However, the restaurants say that they are doing this because consumer demand for the information and for lower calorie dishes.

When consumers demand information or choices, then producers (in this case restaurants) respond.  Part of the reason that the producers respond is to differentiate their products and to try to capture (or retain) market share.  When the restaurants respond by producing lower calorie dishes and providing information there are all sorts of benefits.

First, consumers have healthier choices that they are demanding.

Second, while the restaurants are differentiating themselves to try to capture more market share, it could actually increase competition.  As the calorie information will have to be factual and the taste of the dishes is observable, consumers will have more information on which to make their decisions about where to eat a meal.  When consumers have more information to make decisions, this actually enhances competition.  As a result, this will force restaurants either to lower prices, continue to innovate, or find other ways to offer value to their customers.

Thus, this could be a winning situation for consumers in more than one way.  It will be interesting to see how the restaurant industry continues to evolve and affect consumer health as the effects of this new form of low calorie competition become more apparent over time.