Member Article

Just before Americans sat down to enjoy the Thanksgiving holiday with family and friends, with many of them probably choosing to overlook the total calorie count of those meals, the FDA released the long awaited rule on nutritional labeling applicable to chain restaurants and other venues serving restaurant type food (79 FR 71156). The FDA’s final menu labeling rule implements certain amendments to the Food, Drug & Cosmetic Act ("FD&C Act") that were part of the Affordable Care Act of 2010. Covered establishments have until December 1, 2015 to work through the questions that are already surfacing in light of the recently released rule and to implement changes that are necessary to comply.

What Establishments Are Covered?

The FDA’s final menu labeling rule sweeps broadly and applies to restaurants and similar retail food establishments 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. In addition, a restaurant or similar retail food establishment that is not a chain retail food establishment may elect to be subject to the nutrition labeling requirements by registering every other year with the FDA.

Covered establishments must provide calorie information for standard menu items on menus and menu boards, meaning the primary writing of the covered establishment from which a customer makes an order selection. Covered establishments must also include a statement regarding the availability of additional nutrition information, and provide this additional nutrition information to consumers upon written request, including total calories, calories from fat, total fat, saturated fat, trans fat, cholesterol, sodium, total carbohydrates, fiber, sugars, and protein. In addition, a statement that says, “2,000 calories a day is used for general nutrition advice, but calorie needs vary” must be included on menus and menu boards, although a substitution may be made for menus and menu boards targeted to children.

Under the rule, the term “restaurant and similar food establishment” is defined broadly as a retail establishment that offers for sale restaurant-type food, meaning food that is usually eaten on the premises of the establishment, while walking away, or soon after arriving at another location. Restaurant-type food does not include foods intended to be eaten by more than one person or in more than one eating occasion, such as loaves of broad, or that require additional preparation before consuming, such as deli meats.

With such a broad definition, covered establishments may include bakeries, cafeterias, coffee shops, convenience stores, delicatessens, food service facilities located within entertainment venues (such as amusement parks, bowling alleys, and movie theatres), food service vendors (such as ice cream shops and mall cookie counters), food take-out and/or delivery establishments (such as pizza take-out), grocery stores, quick service restaurants, and table service restaurants, although they would have to be chains that meet the locations, name, and menu item requirements. It seems that few retailers that are part of a chain and selling food products will be exempted from the FDA’s menu labeling rule.

Non-U.S. based restaurant chains have taken notice of the FDA’s final menu labeling rule, with some questioning whether expansion into the U.S. with a single location means compliance with the rule if all other locations are outside of the U.S. The FDA has not definitively answered this question.

What Establishments Are Not Covered?

Schools (as defined by 7 CFR 210.2 or 220.2) are not covered by the FDA’s final menu labeling rule. In addition, transportation venues, such as trains and airplanes, are excluded since they do not have a fixed position or site. That is, the FDA has defined “location” narrowly as a “fixed position or site” and therefore, a wide range of mobile food businesses, such as food trucks and ice cream trucks, are not subject to the FDA’s final menu labeling rule.

What Foods and Beverages Are Covered?

Standard menu items, or restaurant-type foods that are routinely included on a menu or menu board, are subject to the rule’s labeling requirements. The FDA has defined restaurant-type food as food that is usually eaten on the premises, while walking away, or soon after arriving at another location. The FDA’s definition of restaurant-type food also includes food that is either served in restaurants or other establishments in which food is served for immediate consumption or which is sold for sale or use in such establishments, or processed and prepared primarily in a retail establishment, ready for consumption and offered to customers, but not for immediate consumption in such establishment and which is not offered for sale outside such establishment.

While the FDA has offered examples of foods that generally would or would not be considered restaurant-type food, the discussion of covered foods will likely continue as covered establishments review the rule’s application to specific items. For example, as expected, the FDA has stated that food served at a sit-down restaurant or purchased at a drive-through would be considered restaurant-type food. However, foods such as bagels or rolls offered for individual sale (for example, in a retail store), which might not typically be consumed in the same manner as food served by restaurants, would also be considered restaurant-type food. In addition, foods sold by weight that are not self-serve and are not intended solely for individual consumption, such as potato salad purchased for a group, would not be considered restaurant-type food if prepacked or packed upon consumer request.

Combination meals are subject to the FDA’s final menu labeling rule. Notably, alcoholic beverages are not categorically exempted from the FDA’s final menu labeling rule, although the rule exempts alcoholic beverages that are on display and are not self-service food. This means that bottles of liquor behind the bar used to prepare mixed drinks are exempted from the labeling requirements, but bottles of beer in a cooler near the register at a quick service restaurant are not. Alcoholic beverages appearing on menus or menu boards are subject to the rule.

Daily specials, or menu items prepared and offered for sale on a particular day or not routinely listed on a menu, are not subject to the rule’s labeling requirements. In addition, temporary menu items appearing on a menu for less than 60 days (whether or not consecutive) during any calendar year are not subject to the rule’s labeling requirements. Foods that are served in connection with a customary market test are also not subject to the rule’s labeling requirements. However, an item that is offered every week on a particular day (such as every Monday) would not be considered a “daily special” because it is routinely offered for sale.

Condiments for general use, whether on a table or elsewhere, are not subject to the rule’s labeling requirements. Finally, custom orders are also excluded.

What about Different State and Local Laws?

Restaurant chains and franchise systems have adapted to widely varying state and local menu labeling standards over the past several years. The state and local laws on menu labeling vary widely in their substantive requirements and the set of establishments to which they apply, meaning that for some restaurant chains and franchise systems, in spite of any remaining questions, the FDA’s final menu labeling rule may prove to be a welcomed change.

To the extent that local or state menu labeling requirements are not identical to the FDA’s final menu labeling rule, an establishment covered by the FDA’s rule (or an establishment that has voluntarily opted into the coverage of the FDA’s rule) would not need to comply with such local or state menu labeling requirements. Local and state requirements may continue to be applied to foods and establishments that are not covered by the FDA’s final menu labeling rule or other federal nutrition labeling laws. For example, the FDA has stated that as to establishments that are not covered by the rule - like schools or transportation carriers - and as to products that are not otherwise covered by federal nutrition labeling requirements, states and localities will be able to continue to require nutrition labeling. Because of the potential for certain smaller restaurant chains to continue to be subject to a patchwork of varying local and state requirements, some establishments that would not otherwise be covered by the FDA’s final menu labeling rule may choose to voluntarily comply.

The Vending Machine Labeling Rule

While largely overshadowed by the FDA’s final menu labeling rule, the FDA also released its final rule on labeling of calorie counts in vending machines at the same time. Similar to the menu labeling rule, the vending machine labeling rule requires vending machine operators who own or operate 20 or more vending machines (or who voluntarily register with FDA to be subject to the rule) to provide calorie information for food sold from vending machines, subject to certain exceptions. For example, vending machine operators do not have to declare calorie information for a food if a prospective purchaser can view certain calorie information on the front of the package, so long as it is large enough and prominent enough for consumers to read and use.

Calorie information may be placed on a sign in close proximity to the article of food or selection button, and electronic or digital displays may also be used. In addition, the contact information of covered vending machine operators must be disclosed on the vending machine or otherwise with the required calorie disclosures to enable the FDA to contact the operators for enforcement purposes.

Covered vending machine operators have a year longer than restaurant operators - or until December 1, 2016 - to comply with the final vending machine labeling rule.

What’s Next?

In its effort to enable consumers to make informed and healthful dietary choices while spending half of their annual food dollars on foods prepared outside the home, the FDA has created a sweeping new layer of regulation that creates new grounds for foods to be misbranded under the FD&C Act. The FDA has published questions and answers for both consumers and industry on its website. In addition, the final text of the rule released by the FDA is accompanied by nearly 100 pages of ancillary information, including the FDA’s commentary on questions and comments received as to the proposed rule. Still, given the importance of reducing the risk of violations of the FD&C Act and the potential uptick in private legal claims related to the new rule’s requirements, the discussion will continue as we analyze the full impact of the FDA’s final menu labeling rule.