Do Nutrition Warning Labels on Food Products Help or Hurt?

New Study Finds Consumers Avoid Products with the Warnings

Key Takeaways: 

• Nutrition warning labels spur consumers to switch to products without warning labels.
• A narrow focus on certain ingredients on warning labels could lead consumers to choose products that may or may not be healthier for them.
• Shifting consumer preferences cause manufacturers to adjust their offerings on grocery store shelves.

CATONSVILLE, MD, April 8, 2022 – Regulators around the world are increasingly requiring food product packaging to display nutrition warning labels. This raises the question of whether those warnings influence consumer purchasing decisions, and if so, how does it affect consumers’ health?

Researchers from Israel and the United States studied the problem and found that the nutrition warning requirement does cause consumers to switch to products that do not feature such warnings. The requirement also leads manufacturers to adjust product offerings. 

The study, published in the current issue of the INFORMS journal Marketing Science, “Beyond Consumer Switching: Supply Responses to Food Packaging and Advertising Regulations,” is authored by Jorge Ale-Chilet of Bar-Ilan University in Israel and Sarah Moshary of the University of Chicago.

“In June 2016, the Ministry of Health in Chile decided to require food products that exceed thresholds for certain ingredients and higher calorie counts to carry conspicuous front-of-package warning labels,” says Ale-Chilet. “We decided to study the impacts of that decision on consumer product choices and purchasing habits.”

The researchers focused on the breakfast cereal market, which accounts for $194 million in sales per year. They used data from Nielsen’s Global Snapshot on monthly product-level sales and Mintel’s Global New Product Database as well as hand-collected nutrition data from two stores in Chile to study the issue.

“The labels highlight four nutrients: sugar, saturated fat, sodium and calories,” says Moshary. “Accordingly, our study shows that many consumers switch to products without warning labels.”

However, the researchers added that because the warning labels focus on only a few ingredients, other ingredients that may or may not be nutritious could still be present in the products that consumers buy. 

“For example, an unintended consequence of labeling is that by drawing attention only to certain ingredients, the labeling policy in Chile increased the use of artificial sweeteners in breakfast cereal,” says Ale-Chilet. “Although these sweeteners may facilitate weight loss, it is unclear how they affect overall health.”

The researchers found that consumers were not the only ones making adjustments. Manufacturers also responded to changes in the labeling requirement and resulting shift in consumer behavior.

“A striking finding of the paper is that the nutrition labeling policy affects more than just how consumers choose their breakfast cereals – it also affects the assortment of cereal products on grocery store shelves,” adds Moshary. “Assortments changed after the labeling law went into effect because breakfast cereal manufacturers adjusted their product offerings. For example, Nestle introduced a reformulated version of its top-selling cereal product, Chocapic, that is lower in calories and sugar.” 

Link to Study.  

About INFORMS and Marketing Science

Marketing Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at www.informs.org or @informs.

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