Crain's Detroit Business - 25th Anniversary Issue, May 3, 2010 - (Page 12)

Page 12 CRAIN’S DETROIT BUSINESS May 3, 2010 Restaurant chains have menu of issues with nutrition-info law BY NATHAN SKID CRAIN’S DETROIT BUSINESS A small but important section of the Patient Protection and Affordable Care Act, H.R. 3590, recently signed into law by President Barack Obama will soon require any restaurant chain with more than 20 locations to post the nutritional information of menu items. The information must be posted on menus, inside restaurants, at drive-through windows and at the point of sale for customers. The legislation pre-empts any city, county or statewide menu labeling requirements already in place, and gives the restaurant industry a uniform set of rules. Although no date has been announced for the legislation to go into effect, the bill already has had an impact on local restaurant chains. Keith Sirois, CEO of Warrenbased Big Boy Restaurants Sirois L.L.C., said uniformity is a welcome change from the current system of individual rules that vary from state to state. “It’s been a nightmare,” Sirois said. “If you go from New York to California, you will find variances in the requirements from just posting the information all the way to having it itemized on the menu.” Sirois said changing his 140-unit chain’s menus will have a total cost of $30,000, plus $3,000 for the single-item nutritional analysis of its entire menu. In all, each Big Boy franchisee will be on the hook for about $350. “This is not a lot of money as long as the roll-out coincides with the new menu cycle,” he said. “My biggest concern is that we will be forced to reprint all of the menus before then.” Pizza delivery chains face a different problem altogether. The challenge for Ann Arborbased Domino’s Pizza Inc. and Madison Heights-based Hungry Howie’s Pizza and Subs Inc. is that pizza is not considered a standard menu item since every pie is customizable. Domino’s is asking for “reasonable flexibility” as it looks for the most effective way to post its nutritional information. “There are 34 million ways to order a Domino’s pizza,” Patrick Doyle, CEO of Domino’s said. “It isn’t an issue of cost, or concern about the effect on sales, it’s that we fundamentally can’t comply.” Doyle said a fixed menu labeling approach is impractical. “ There are 34 million ways to order a Domino’s Pizza. It isn’t an issue of cost, or concern about the effect on sales, it’s that we fundamentally can’t comply. ” Patrick Doyle, Domino’s Pizza Jeff Rinke, vice president of product development for Hungry Howie’s, has similar concerns for his 574-unit chain. “As far as the menu is concerned, it’s next to impossible,” Rinke said. “We explain it all on our Web site, and the consumer can add it up themselves.” Rinke said Hungry Howie’s is asking for guidance on how to best display the information. “Maybe we can say, here is a cheese pizza, here is where you start and then list all toppings and their nutritional value,” Rinke said. “We are waiting to see what everyone else does.” But the nature of ordering pizza isn’t the only issue facing either Domino’s or Hungry Howie’s. Since both rely heavily on delivery, neither has high foot traffic in its stores, making it difficult to determine the actual point of sale. Tim McIntyre, vice president of communications for Domino’s, said only 5 percent of the company’s total sales come from people ordering off of a menu at a location. “If the idea is to have that info displayed at the point of the sale, we would need to have that information on a menu at the home or online,” McIntyre, said. “It makes no sense for us to have to change menu boards.” McIntyre said printing nutritional information on paper menus that would enter the home on delivery calls makes more sense than retrofitting its stores with new menu boards. Rinke says 98 percent of Hungry Howie’s customers place their orders over the phone and rarely see a menu at all. “They already know what they want before they call,” he said. Darren Tristano, executive vice president of Chicago-based restaurant consultant firm Technomic Inc., said the bill will generate innovation as restaurants look to increase sales. “We will see healthier items, portion control and downsizing of fats and calories,” Tristano said. “And we will start to see these companies becoming more like the auto industry by offering a base item and then up-charging for addons.” Tristano said the change ultimately will create higher prices for consumers. But neither Domino’s nor Hungry Howie’s seem to be concerned about how the new health care reform bill will affect sales. Each said one of the strengths of the pizza industry is its product can be as healthy or as indulgent as customers want, and the ability to make healthy decisions has always been there. Sirois, a food industry veteran of 35 years, said that regardless of the options, the public knows what it likes. “People say they want to eat healthier … but when they vote with their dollars, they go out and get the biggest burger they can get,” Sirois said. Nathan Skid: (313) 446-1654, nskid@crain.com You can’t find this many politicians, civic leaders, CEOs, partners, owners or presidents anywhere else. Sponsor the conference and get your business’s message in front of this captive audience of 1,500 of Michigan’s brightest leaders and decision makers. Call Jim Connarn today at 313.596.0391 to have a sponsorship package customized to fit your marketing goals and objectives. Affordable packages are still available. 

Table of Contents for the Digital Edition of Crain's Detroit Business - 25th Anniversary Issue, May 3, 2010

Crain's Detroit Business 25th Anniversary
Looking Forward
25 Companies to Watch
25 Mainstays
25 People Then and Now
25 Scandals and Dubious Deeds.
25 Philanthropic Gifts
25 Newsmakers of the Year
25 Big Stories
25 Innovations
25 Gone But Not Forgotten
Health Care
Defense
Suppliers
The Internet and Communication
Energy
Finance
Signs of the Times

Crain's Detroit Business - 25th Anniversary Issue, May 3, 2010

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