Healthcare Business News
Hank Cardello, senior fellow Obesity Solutions Initiative

Lighter fare offers heftier profits for eateries: study

By Paul Barr
Posted: February 7, 2013 - 12:01 am ET

Lower-calorie foods are more profitable for fast-food chains and casual dining restaurants than higher calorie foods, a study has found. And the authors say the results give public health officials the ammo to induce national chains to cut back on the calories in their food.

The data showing low-calorie foods to be more profitable could be the magic bullet needed by public health advocates to convince chain owners to reduce the calories in their food, said Hank Cardello, senior fellow and director of the Obesity Solutions Initiative at the Hudson Institute, a not-for-profit research policy group focused on global security, prosperity, and freedom.

The study, “Low Calorie Foods: It's Just Good Business,” found that chain restaurants considered to be lower calorie had a greater number of servings, a greater change in the total traffic and greater sales growth, looking at 2006 to 2011. The research was supported by the Robert Wood Johnson Foundation.

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Historically, public health officials would push for chain restaurants to offer healthier food, but they couldn't give them a financial case for doing so. “As an industry, they've been slow to change,” Cardello said. “Now you can get their attention,” he said.

The study indicates that Americans are being drawn to lower calorie choices and the restaurants that can provide those choices will make more money, Cardello said. “People are voting with their wallets.”

The study authors wrote that in 1990, there were no states with an obesity rate greater than 15%, while currently 39 states have adult obesity rates greater than 25% and no state's obesity rate is lower than 20%. The medical cost of obesity is estimated to be $147 billion per year, according to the study.

Cardello said the research relied on high-quality data from the company NPD and from Nation's Restaurant News, though some restaurants had to be excluded because they offer too many variations that couldn't be tracked properly. “I would've loved to put Chipotle in there,” and the same holds true for pizza chains, but they couldn't be accurately assessed, he said.

The study authors in exchange for getting access to the data could not reveal individual chain company data, Cardello said. Among the chains that were studied in the report are: Chili's, McDonald's and KFC.

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