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For Shufersal, the leading food retailer operating supermarkets in Israel, it looks like the sky is the limit. This is a message strongly received from the CEO of Shufersal, Itzhak Aberkohen, in a recent interview given to Globes business newspaper (for its annual publication of consumer-based equity-ranking of brands, July 2017). Shufersal is already a major national retailer, but since the collapse and sell-off of the main competing food chain Mega last year the road ahead is clear more than ever for Shufersal to ride on to stardom. The plans presented by the retailer’s CEO are definitely leading in that direction on different fronts.

  • Note: Shufersal has also been known as ‘Supersol’ but it appears that the retailer is moving to suppress that name in favour of enhancing its Shufersal brand name. The original name chosen for the retailer almost sixty years ago was composed by joining two words: ‘Shufra’ from Aramaic meaning excellent and ‘Sal’ which means basket in Hebrew. The retailer founded the first modern American-style supermarket in Israel in Tel-Aviv in 1958. Israelis frequently name the retailer ‘Supersal’ or ‘Shufersal’. The official choice of ‘Shufersal‘ by the company should make the consumers happy while remaining as true as possible to the legacy name.

The retailing company Shufersal operates over 270 stores. They are divided into multiple sub-chains of different store formats, designed to target different consumer segments or accommodate distinct shopping situations or goals. Three main sub-chains are: “My Shufersal” (the core sub-chain of ‘classic’ supermarkets in neighbourhoods); “Shufersal Deal” (large discount stores); and “Shufersal Express” (small convenience stores in neighbourhoods). Like most food chains, the stores offer in fact not only food and drink products but a larger variety of grocery and housekeeping products, and may sell as well toiletry or personal care products. Shufersal operates in addition a channel for online or digital shopping. It also has its own brand of products carrying the retailer’s name. The CEO seeks to enhance the company’s capacities in these domains, and then extend further. An important aspect in his plan is the digital transformation of the company’s retail operations and services.

  • Note that supermarkets in various countries may selectively add in different times and locations other product ranges (e.g., books and magazines, electric home equipment, housewares).

Shufersal is now on the verge of making a strategic entry into the field of ‘pharma’ retailing with the acquisition of New-Pharm, the second-sized pharma chain in the country. The food retailer already sells toiletry products in its stores, as indicated above, but it has no access to cosmetics (e.g., perfumed lotions, make-up) and non-subscription medications (via pharmacy departments). Taking over New-Pharm would provide it with this capability through the pharma-dedicated and licensed stores. The dominant leader in pharma in Israel is Super-Pharm, which gets the respect of Mr. Aberkohen as a successful and highly professional retail competitor in that field. Shufersal should be able to get better terms for purchasing toiletry products for its supermarkets and other stores, but the addition of cosmetics and pharmaceuticals seems less fitting its current line of business. It makes sense if the retailer had department stores where one of the departments would sell cosmetics, but that is not the case of Shufersal; it would probably have to operate the pharma stores separately. Undertaking the responsibility of operating pharmacies could create even greater complications that may outweigh the benefit of margins from selling OTC medications, nutrition supplements and other devices.

The deal is still awaiting approval of the antitrust supervisor by the end of August 2017. The main obstacle comprises 6-8 flagship stores that the supervisor may not allow the food retailer to have. Aberkohen has said in the interview that the acquisition of the pharma retailer would not be worth it without those stores. There could be additional restrictions due to vicinity of “Deal” stores and “My” supermarkets to some New-Pharm stores.  Aberkohen believes that the increased variety and assortment of toiletry products the company will be able to sell together with the new categories will make an important contribution to its sales potential but will also create a more balanced competitive challenge against Super-Pharm (i.e., as two equivalent retail powers) that will benefit consumers in personal care and grooming. The suppliers are concerned, however, that the bargaining power of Shufersal will become significantly, perhaps exceedingly, stronger in toiletry, and that the retailer will link the trading terms for their presence in New-Pharm stores with presence of their products in the Shufersal stores (Globes [Hebrew], 15 August 2017).

Shufersal’s CEO seems to have little regard for its follower Mega under a new ownership. Most of the chain, neighbourhood supermarkets (“Mega City”, 127 stores), was bought from a holding company (“Alon Blue Square”) in a rather bad state by a medium-sized food retailer of discount warehouse-like stores (“Bitan”) in May 2016. Other discount stores were sold and distributed among some smaller discount retail chains. Since then a few more supermarkets of Mega were apparently sold or closed. Bitan has roughly more than doubled the total number of stores in its ownership since acquiring Mega (on a scale from 70-80 to 180-190). Aberkohen argues that Bitan seems to be taking hold of the operation of Mega City but there is still much work ahead to re-organise its whole retail business. Occasional signs in the stores imply that the new owner is still grappling in effort to manage the additional supermarket chain. There will also come a time to deal with the effort and redundancy of keeping two unconnected brands of the two sub-chains of discount stores and supermarkets (“Bitan Wines” and “Mega City”, respectively).

Mr. Aberkohen has no greater regard for the other discount food retailers (the more familiar and popular of them is “Rami Levy” with 44 stores, increasing by 10 stores in the past year). In his view, Shufersal does not consider itself as opposed to Rami Levy or the other players; it is engaged in its own plans and mission with a focus on innovation. A key to success in the long-term, in his opinion, is an emphasis on managing existing (‘same’) stores and innovation, not adding more and more floor area. He thus maintains that while the competitors, particularly Bitan/Mega, are so busy handling the additional space in new stores, Shufersal will have the time it needs, as a window of opportunity, to create innovation (e.g., Internet, robotics) and gain an advantage of 3-5 years ahead.

  • So far consumers have not gained in terms of cost of shopping from the deal of selling Mega. According to Israeli business newspaper “Calcalist” there are worrying signs to the contrary. Mega under its new ownership has not been pressuring prices downwards (attributed to financial obligations of its owner Nahum Bitan), and Shufersal that had identified this weakness, took the opportunity to raise prices in its stores while gaining in bargaining power vis-à-vis its suppliers. A rise in prices (i.e., index of barcoded products) and an increase in sales revenue in the food retail sector (including non-barcoded outlets) point to a change in trend from 2014-2015.

The CEO of Shufersal is looking forward to digital transformation of retailing and shopping experiences, involving innovation both in online self-service customer-facing platforms and in the preparation and delivery of online orders. He expects great advances in the operation of logistic centres where robots and humans will take part in collating products from shelves for online orders and packing them for dispatch and delivery to customers. Three centres are in development. Enthusiastically, he proclaims that the online apparatus will involve a lot of automation, digital (features) and robotics.

Shufersal is clearly adopting the new language of data-driven marketing, Big Data, and digital automation of interactions with its customers-shoppers. The company is said to pull together to that aim its information systems, supply chain, and data pools from its customer loyalty club and club of credit card holders. This will enable it in the future to customise offers and services much better to its customers. Aberkohen talks of providing services to suppliers based on their platform of big data but he may have to think more in terms of collaboration, especially with the stronger manufacturing suppliers (i.e., sharing data on shopping patterns in exchange for support and aid in resources for analysing the data using advanced tools and methods of data science). Aberkohen believes that in the future we will see fewer stores, and smaller ones, due to transition of shoppers to online ordering and direct delivery to their homes or offices (currently online orders account for 12% of sales at Shufersal).

Moreover, the CEO is expecting a considerable expansion in ranges of products the retailer will make available to its customers via online shopping. This will include also orders from overseas (e.g., through partners in the US). He refrains from likening Shufersal to Amazon but is surely getting inspiration from the international online master. It could relate to: (a) A wide variety of products that a retailer can offer on the Internet (besides, Amazon could be getting more deeply engaged in food retailing with the recent pending acquisition of Whole Foods); (b) Employing robotics and humans in logistic centres; and (c) Advanced and dynamic analytics to customise offers to shoppers.

  • The measure of consumer-based brand equity of Globes/Nielsen is based on three key metrics: willingness to recommend, intention to buy tomorrow, and favourability. The top brand of food chain stores is Rami Levi (discount stores). This position may be credited to the personal character and initiative of Mr. Levi and his high media profile (e.g., proclaiming to fight and act for the good of consumers). Shufersal is in the second-best position in the eyes of consumers. The original brand of Bitan is ranked 7th whereas Mega City has fallen down to the ungracious 11th place (one before last).

Shufersal’s own brand currently captures about 20% of total sales. The CEO aims to increase this share to a level of 40%-50% to be in par with similar retail chains overseas. The retailer will have to walk on a thin rope when cutting down purchases of branded products from national manufacturers without ruining relations with them. Shufersal already offers milk, cheese and meat (beef) under its private label (a precedent in Israel), yet the CEO admits they still value and need their relationship with the leading national producer of these food products (Tnuva). In the past Shuferal has also had a bitter battle with another producer of dairy and other food products (Strauss). Other categories in which the retailer markets under its name include baby diapers and milk formulae; the CEO has the full intention to add more product types to this list and expand the shelf space and volume assigned to Shufersal’s own brand. The proposition according to Aberkohen is to bring quality products at value-for-money. Shufersal has taken additional strategic steps in recent years to tighten their control over the display of products in their stores: assigning their own workers to place most products on shelves in-store instead of allowing representatives of suppliers to do so, and bringing-in most products to stores independently from their logistic centres.

The CEO of Shufersal is cognizant that many consumers do not strive to shop in large discount stores that are usually located at the outskirts of cities or in industrial areas. Often enough consumers prefer convenience to lower cost. People who work long hours, including young adults early in their career, and even students, cannot afford the time or pass over the option of shopping in those stores. It may be added that for older consumers (e.g., pensioners), discount stores may simply be out of reach, especially if one does not drive. Supermarkets in shopping malls (so-called ‘anchors’) are also considered by Aberkohen as obsolete. These consumers-shoppers prefer visiting (at least during the week) a supermarket or even a convenience store in their neighbourhood — they are too pressed in time with duties or other engagements to bother about the somewhat higher cost (Mr. Aberkohen brings his own daughter as an example). Nevertheless, if the neighbourhood stores do not work out as a practical option, they will probably order online.

To top the list of the plans of Shufersal’s CEO, he sees the retailer engaged in a variety of peripheral services consumers may like to have at easy reach such as non-banking financial services (e.g., loans), insurance, travel (including holidays abroad), and optometric (eye-glasses). Some of the services are likely to be made available only online (e.g., insurance, travel), next to additional shopping options Shufersal expects to generate. Although Aberkohen does not refer specifically to the mobile channel, it is reasonable that much of what he describes in relation to an online channel is necessarily applicable these days in a mobile channel.

Shufersal’s CEO has high aspirations for the retail company he leads. Aberkohen’s plans may change not only the consumption culture in the country, as he maintains, but also the nature and character of the company itself. Hence, Shufersal’s management will have to watch carefully what areas it is about to enter and how qualified the company is to make those extensions. They will have to consider, for example, how to integrate the business areas of New-Pharm into the portfolio of Shufersal. They should not underestimate the trouble that discount retailers can cause them. Moreover, as Shufersal makes more moves to fortify its retail business, its management must act with sense and sensibility amid tensions that such moves cause, and are likely to continue to cause, with suppliers as well as consumers. The expansion and addition of products and services for the benefit of consumers is a positive venture, but Shfuersal still has to convince them as such, every day.

Ron Ventura, Ph.D. (Marketing)

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One of the things people probably most dislike is getting sick because of some food they have eaten — usually an annoying and unpleasant experience. The sickness can happen within hours or two to three days after eating the contaminated food. The trouble is that oftentimes one has no way of anticipating the disease until feeling sick, and sometimes even after becoming ill it is not easy to connect the disease with consumed food. A food item may come from a respected and trusted brand, the expiry date looks fine, the food may also taste good, and still without suspicion it may cause poisoning and sickness. Food companies are walking on the edge of food safety when they skip necessary precautionary measures to prevent and detect contaminations in time, but furthermore when they conceal problems or try to solve them quietly in the factory without warning of a looming health risk to their customers.

  • The most common infections and poisoning are caused by bacteria of the type of Salmonella, Listeria, and E-Coli. But a foodborne disease may also be viral (e.g., norovirus) or being caused by insects (e.g., food moth). For most people a foodborne disease is not dangerous; it will cause sickness and inconvenience, passing after a few days without medical treatment. Yet, these diseases may be troublesome and cause more serious complications in people whose health is vulnerable (e.g., little children, seniors, pregnant women, prior illnesses, weaken immune system).

This summer there were a number of incidents of food contamination revealed in Israel. Yet two of the cases are more significant and instructive: the cornflakes of Unilever (Telma) and ready-to-eat salads by Shamir Salads.  First, the failures exposed in the conduct of the two concerned companies commend particular attention and taking lesson from them. Second, these incidents were the earliest to become public (late July, beginning of August) and have put the matter of food safety under a spotlight. A number of additional incidents of contamination may have been revealed just because of that, partly reported by alarmed food companies themselves (e.g., salmon fish, halva, frozen potato fries, pre-prepared grilled hamburger).

Unilever (Telma) — A contamination of salmonella was discovered by Unilever in Israel in packages of a few of its cornflakes products under the brand name of Telma (an Israeli-grown brand acquired by Unilever). The company insisted, however, that all contaminated packages remained in a company’s facility to be disposed of (they were converted into corn oil to be used as energy source for another industrial process). When upset consumers and the Ministry of Health pressured Unilever to provide assurances no packages reached food stores, the company claimed they had checked that the marked packages were separated and excluded from delivery in its facility. Only that this information was not accurate, not properly verified. It was soon after revealed that some 240 contaminated packaging parcels found their way out of the facility and distributed to food stores. Some of those cornflakes packages were probably consumed though no complaint of sickness was firmly connected with the cornflakes. Nevertheless, since cornflakes of the type contaminated are largely eaten by children, it is understandable that parents were strongly agitated by that belated discovery.

Unilever directed responsibility for the ‘mishap’ to an employee of a local logistics contractor who apparently mistakenly misplaced labels of some parcels for delivery and sent out the wrong packages. Even so, responsibility for the whole chain of supply of the products of Unilever rests with the company marketing them (not physically distributing them). That is the onus of the brand’s owner towards its customers. That Unilever failed to verify this mistake earlier makes the explanation just weaker.

  • Food safety experts suggest that it is unusual for a dry product like cornflakes to contract bacterial contamination of salmonella. Additionally, the cornflakes are roasted at a very high temperature that kills any bacteria that might have settled in the material. Therefore, it is much more likely that the culture of salmonella developed during the packaging or storage in preparation for distribution.

Shamir Salads — A contamination of salmonella was found in Mediterranean salads that contain tehina. Shamir Salads, like other food producers, buys the tehina mix as a raw material from a supplier, in this case a company named “HaNasich” (meaning “The Prince”). Badly enough, the grave problem for Shamir Salads is that the company did not identify the contamination itself. It failed twice: by not testing initially its raw material and by not testing the final salad product before delivery to retailers for any possible contamination. It should be clarified that laboratory tests are run on samples and therefore they cannot eliminate absolutely any contamination, but if sampling is conducted appropriately it gives a good chance of detecting the traces in time for further checks and corrective action. Skipping any sampling and tests cannot be excused.

The management of Shamir Salads argued in its defence that the company trusted its supplier, HaNasich, and therefore did not see any need to continuously check on the quality and safety of their tehina. The company was deeply disappointed and felt betrayed by its supplier for not advising them of any problems. The reference to the concept of trust between parties is not unfounded, but one can still check internally as a precautionary control measure without violating trust in the other party. A company does not have to trust blindly, especially not when a sensitive matter as health is concerned. It may even be doing a favour to its supplier that could miss contamination in its factory. Much less understandable is the lack of tests on the company’s finished products. If not before or during production, then at the very least testing of the finished salads would have given the company a chance of detecting a contamination before leaving the factory, investigating backwards and identifying the source in the tehina. Other companies (e.g., Strauss, Tzabar Salads) using the same tehina ran tests on their finished products and identified the contamination, linking it to tehina by HaNasich.

Both Unilever and Shamir Salads were actually forced to order recalls of their products. A recall becomes damaging in the public eye when the company does not seem to control the process and its timing, or is not honest with the consumers about the recall’s reasons and circumstances.

Complicated relations and flawed working of safety procedures in the food industry may have some responsibility for contamination getting lost or hidden from public knowledge. Companies have a reasonable interest to try to solve a problem in production they identify internally in hope they can contain it “behind closed doors”. It is a matter of calculated risk — but risks sometimes realise in a worse way. The Israeli Ministry of Health is criticised for not placing a proper procedure that requires food producers to perform microbiological lab tests on samples of finished product items and that current reporting procedures are vague. For instance, the companies are not required to report to the ministry until after ordering a recall due to contamination. Consequently, there are repeated conflicts over responsibility and blame-exchanges between producers and the Health Ministry. Furthermore, food companies are working with private labs that are in turn required to report directly to the Health Ministry only in case of contamination found in finished products and not in their raw materials. The implied outcome: food companies have a latent incentive to keep anything that happens in the factory silent, handle a “situation” for a longer time, and not report to anyone until the problem becomes severe or an urgent recall is inevitable.

Issues of food contamination and foodborne illnesses concern many countries, gaining particularly growing awareness in Western countries. The Fortune Magazine published an article, kind of special report, on problems of food safety in the United States (October 2015) titled “Contamination Nation“. The number of food recalls has grown more than twice from 2004 t0 2014 (2004: 288 recalls of which 240 of non-meat products; 2014: 659 recalls, 565 non-meat). Nearly half of recalls (47%) in the US are due to microbiological contamination. The highest proportion of recalls (21%) are of ready-to-eat food products.

  • According to the Centers for Disease Control and Prevention (CDC) 48 million Americans suffer each year of foodborne illnesses (128,000 are hospitalised and 3,000 die of a foodborne illness).

The writer, Beth Kowitt, proposes four reasons it is so hard to battle food contamination and poisoning; their relevance extends to Israel and to many other nations:

  • Foodborne illnesses are very difficult to identify and track down their roots — cases of illness are sporadic and therefore hard to tie with a specific “outbreak”; hundreds of components may be involved in isolating a cause of poisoning.
  • The food industry does not trust state regulators, their knowledge and tools — major food companies are performing their own tests for bacteria on food and in factory premises and develop a knowledgebase independent of state departments or agencies (FDA, CDC); companies are reluctant to disclose information they do not have to, part in concern of being implicated before the epidemiological mapping is completed.
  • The more food is imported from other countries, the more difficult it gets to control and verify its safety — exporting countries have different food-safety standards and inspection regimes, and the more steps food passes before entering one’s destination country, there are more opportunities for becoming contaminated.
  • Consumers have to do more to protect themselves — when consumers seek certain ingredients to be reduced or excluded (e.g., potassium, salt, sugar) or refrain from consuming frozen products because of health considerations, they could render their food less protected from bacterial contamination of their food; consumers are responsible for taking active measures to reduce contamination risks at their homes (e.g., washing hands, boiling milk, checking meat temperature).

It may be added to the last reason that safeguarding from food contamination may start from the facilities of the food producer but it should continue through the retailers’ food stores and finally indeed at the consumers’ home kitchens. Retailers are obliged to keep stores and displays cleaned-up at all times and ensure products are not kept beyond their expiry date (e.g., chilled dairy products, ready-to-eat meals, eggs). As for consumers, the American CDC recommends four practices for protecting from contamination: Cook to kill bacteria, Clean working surfaces, Separate more risky items (meat, fruits and vegetables) from other food, and Chill to reduce chance of bacterial cultivation.

Next to the article cited above, Fortune brings the story of the Texan-based Blue Bell ice-cream company which demonstrates what happens when a food company stalls treatment of contamination hazards at its plants and even hides them for too long. The crisis has rolled during 2015 but an investigation found that its roots may have existed since 2010. There were three deaths and two more serious patient ilnesses in the same Kansas hospital in late 2014, and in total ten people were affected by listeria-type infection connected with the ice-cream over five years; establishing the connection with Blue Bell was hard.

Contamination occurred in two plants: at Brenham, Texas ‘homebase’, and in Oklahoma. It appears that already in 2013 the company discovered contamination in its Oklahoma plant that was not treated properly despite an FDA inspection. Importantly, bacteria were found in that plant on floors and catwalks (i.e., bacteria can be easily passed with movement of workers and objects). Additional flaws were found in further inspections, including “condensation dripping from machinery into ice cream and ingredient tanks; poor storage and food-handling practices; and failures to clean equipment thoroughly”. Because of its stalling, the company drifted into what experts call “recall creep” — it happens when executives think limited action every time they are told of listeria findings is enough to solve the problem and constrain commercial damages, thence find themselves forced to perform greater recalls over and over again.

Blue Bell is the third-largest ice cream maker in the US and its products are widely admired. Many people across the country are said to have saddened by the closure of the plants and loss of their beloved ice cream for a period. This year the company resumed production and marketing, adding gradually more flavours and markets, after a thorough clean-up of plants, change of procedures and rules and training of employees. One of the practices installed is “test-and-hold” where a production series is sample-tested  and all packs are held in storage until it is cleared from bacterial contamination.

A serious fatal crisis related to food safety in Israel occurred in 2003 with the milk formula for babies by Remedia. It should be noted this was not an incident of contamination. In this case the company made a change in the composition of one of its formula versions by which it drastically reduced or eliminated from the product the vitamin B1. This ingredient is vital for the development of the nervous system of babies. As a result, critical damage was caused to the health of babies: four babies died and several more children grew up with irreversible damage to their development (neural, cognitive and motor). Although this event is different, and the consequences in the recent contamination incidents are much less severe, two relevant notions are in order. First, a contamination incident can lead to just as severe consequences when the problem is mishandled and information is concealed from authorities and consumers as the crisis of Blue Bell proves. Second, Remedia made the grave mistake of throwing all the blame on a German company (Humana) that was hired to develop, implement and test the new recipe (and erred in its tests). However, Remedia was responsible and accountable for its product to the parents and babies in Israel, not the faulty German company it worked with. Remedia ceased to exist.

It is probably only human for the company’s managers to direct a justified accusation and blame for a failure on a contractor, supplier or business partner, as a way of saying: “Look, this is not a failure in our own operation; you can still trust us with everything we are doing for you”. It does mitigate responsibility somewhat, though from a consumer viewpoint this kind of ‘clearing’ does not work and is often doomed to be rejected. The companies that market the implicated products did allow them to be distributed to consumers. At the end of the day, it is their brand names on the products that count.

It is impossible nowadays to completely eliminate food contamination, particularly by bacteria. However, food companies (and not them alone) can and should make every effort for preventing bacterial and other types of contamination and poisoning. They are expected to show that they are proactively taking measures to that aim. In addition, the owners and executives have to be open and sincere about the causes or circumstances of recalls to consumers, and consider revealing incidents even beforehand as indication the company is acting responsibly. It is pure investment in the credibility of their brands.

Ron Ventura, Ph.D. (Marketing)

Note:

These articles appeared in Fortune (Europe Edition), Number 13, 1st October 2015:

“Contamination Nation”, Beth Kowitt, pp. 53-56.

“How Blue Bell Blew It”, Peter Elkind, pp. 56-58.

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The collapse of a company is not necessarily an outcome of a single calamitous event. More likely, a final collapse will follow a period of several months or years of gradual deterioration in the management and performance of the failing company. The causes are usually a mixture of external events or market factors and not least internal actions or non-actions committed by the company. This seems to be the case with Mega Retailing, the second largest chain of supermarkets in Israel, that practically collapsed this month (January ’16) but the process of its deterioration may be traced through at least five years backwards.

The current Mega retail chain is in fact a successor of a consumer co-operative chain, “Co-op Blue Square”, established in the 1930s. That co-operative existed until the late 1990s when it could no longer sustain itself. Consumers who had a stake in the enterprise were required to sell their shares and a majority stake in “Blue Square” (73%) was acquired by the Alon energy group.

The company, renamed in Israel as “Alon Blue Square”, expanded since 2003 and added more business units in different retail areas. For instance, Alon brought under the rooftop of Blue Square (holding a 78% stake) its compounds of car fueling stations with adjacent trade services. The chain of supermarkets received the new brand name Mega (after going through an earlier short phase under the name “Super Centre”), instituted as a subsidiary in full control of Blue Square, its home company. Yet another critical move saw the establishment of “Blue Square Real Estate”, a subsidiary of the home company, which divorced Mega from control over its physical locations, making the real estate company its landlord. At the end, Blue Square is about to lose the core business that carried its name to begin with.

  • Alon Blue Square also acquired a chain of convenience stores (“am:pm”) that is separate from Mega but competes with it in city centres and neighbourhoods.

Multiple reasons can be given for the poor condition of Mega as proposed in the media. Some blame the high operating costs of Mega on wages and benefits for employees being higher than standard in the food retail industry; it is probably a legacy inherited from the older days of Co-op Blue Square when it was affiliated with a strong labour union. Not to be confused, employees in stores still earn relatively low wages, but with the low margins in the industry, the differences from competitors are claimed to be crucial. On the other hand, the management could be held responsible for keeping deficiencies reminiscent of the culture of Co-op in those older days. The owners on their part did not seem to be interested enough in what was happening to their supermarket company. Mega was lacking in strategic (marketing) thinking and mindset that would allow it to adapt better to new realities of a competitive market and higher standards of servicing and merchandising.

One should not go far to find what is wrong with the Mega chain. The problems of Mega show most visibly and strikingly in its stores. A particular branch is used here as an exemplar to demonstrate some troubling aspects. It is a neighbourhood store in the northern part of Tel-Aviv. The supermarket is not large (estimated at a little less than 300sqm or about 2500sqf) with a main hall (75% of its area) and an extension (two “corridors”). The store was established in the early 1970s and for a decade or two it was considered spacious and modern. The last major renovation took place about fifteen years ago but unfortunately within a few years it has lost much of its newly gained attraction.

There are six columns of displays across the main hall which leave too little space for moving in the aisles between them. In addition, the displays reach high above the head. The whole arrangement of this hall makes a shopper feel lost in space and closed-in. Bad merchandising appears to make the supermarket look crowded and untidy. A whole new concept should have been applied to this store with fewer columns, lower displays (e.g., no more than 1.50m) that would allow shoppers to look beyond the aisle, and fewer product types and brands (SKUs) on offer — in this supermarket ‘less is more’ would be perfectly right. Shoppers obliged to get essential products like bakery and dairy in corridors may find it unpleasant.

Another troubling matter in the store concerns the shopping carts and baskets, or rather the lack of them. To pick-up one of the few shopping carts available one has to pass across the cashiers and away from the entrance. Even if one was lucky to get a shopping cart, he or she would find the cart difficult to navigate with in the aisles, especially as the store, like the whole chain, moved to larger carts definitely not useful in this specific store. What shoppers should have been provided are hand-held baskets (or wheeled baskets), and these should have been arranged in ‘towers’ near the entrance of the supermarket (not hidden under cashier desks). The baskets would serve a much better purpose in the entry area than a large unappealing promotional stand positioned there. As a result, the store also does not have a welcoming and convenient “decompression zone”.

  • Considering the competition in vicinity (e.g., a large supermarket of the leader chain “Supersol” in a nearby shopping centre; a minimarket store across the street), the approach in that  Mega’s store, whether out of flawed thinking or lack of care, could not be affordable.

Similar problems can be found in other Mega stores: (a) A delivery service interrupts and blocks the way out for customers who take home their shopping bags  — delivery boxes are piled in a passage on the exit from cashiers, personnel are handling deliveries in the same area where customers should complete their shopping and leave, and preparing deliveries for some shoppers halts others for long minutes; (b) The staff arranges merchandise on shelves during the day, often blocking aisles with box-loaded shopping carts or boxes left on the floor — shoppers have to make their way competing with personnel on access to displays; (c) Product displays do not look neat and tidy, some items get out-of-place, some are falling to one side or another — even if shoppers are responsible for not leaving items in place, a store worker should always pass by, check and fix displays. If shoppers find a store in good order, clean and tidy, they will (mostly) feel obliged to make an effort to keep it that way for everyone to enjoy.

It does not seem to be a question of good will. Mega stores are missing order and organisation. Moreover, the employees may not have a guiding hand and initiative they need from either general management or store managers to get the supermarkets look and feel the way they probably aim at. In a  presentation (in Hebrew) of a strategic plan from 2013 (Blue Square’s website) the management of Mega shows that on top of every other goal they want the customers to love their stores; Mega’s vision through its history is “At Mega (we’re) listening to you! Always, at every place and in every encounter, because we really care.” Yet the stores could not show for it. The employees may have wanted it to happen but the management was not behind them to show them how, and it is still unclear why store managers were not helping or how well coordinated they were with top management.

A seasoned consultant in marketing and retailing (Galit Moor, “Shopoholist”) told “The Marker” Israeli business newspaper about rivalries and non-coordination between the trade and operational departments of Mega — the trade people would reach agreements with suppliers but operations people would not respect them and not follow them through in the stores, causing confusion and loss of trust of suppliers. She also related to lack of understanding of consumers and not really listening to their concerns, a top management detached from the stores, and mistakes in running stores, particularly failures in dealing with details at the store level (MarkerWeek, 24 July 2015). The management was not focused, undecided whether to compete on price (e.g., to fight off discount chains) or on enhanced customer experience (blending price perception, service, convenience, variety and quality of products), and therefore it must have had difficulties setting clear priorities to staff at stores. It is not too surprising that staff and managers could neither treat properly details of service and merchandising in the stores.

In mid-2015 Mega was in debt of 1.3 billion shekels (~$340m), 700 million shekels of which owed to suppliers and the rest to banks. The delay in payments to suppliers has led to sour relations with them, where some have also froze or reduced further supplies to the retail chain. Mega started with an aggressive plan of cuts, primarily closing stores, but it could not save it at this stage. By the end of 2015, just before the court intervened (stay of proceedings), the debt accumulated to 1.5 billion shekels, half of which to suppliers who largely lost confidence in and patience with Mega.

In the previous decade Mega has expanded while defining three sub-chains: “Mega City” supermarkets for serving neighbourhoods, large central “Mega”-stores, and large discount stores (“Mega Bull”, i.e., “target”). The latter was re-named just three years ago “You” and added more stores.  Mega was actually responding to a move similar in kind by the leading competitor Supersol with their sub-chains “My Supersol” neighbourhood  supermarkets, “Supersol Express”, and large discount stores “Supersol Deal” (a confounded fourth sub-chain of ‘warehouse’ discount stores “Big” was later eliminated). Probably not by coincidence, the restructuring of chains by Mega and Supersol resemble a strategic move by Tesco in the 1990s. The expansion, and especially the establishment of very large stores, has led the Israeli chains, like the British one, into trouble. The suspect reasons are failure to adapt in time to changes in economic atmosphere and consumer behaviour since 2008 vis-à-vis an inadequate reply to the challenge from new discount chains. (It is now revealed that Tesco faulted in delaying payments to suppliers, as Mega did.)

  • Mega operated in total about 185 stores in mid-2015. Initially the plan was to close 32 stores, mainly their “You” discount stores. However, it eventually closed at least 55 stores by the end of the year, and Mega is now left with fewer than 130 stores. Its number of employees was intended to be reduced from 6,000 to 5,000 but actually dropped to 3,500 (most of them were store employees, but the staff in headquarters was also significantly cut).
  • In the first half of 2015 Mega reported sales of 2.6 billion shekels (~$685m), down from almost three billion shekels in same period of 2014. Of total sales, 80% were attributed to the stores Mega expected to keep and 20% to the 32 stores intended to be shut down. In profit, stores planned-to-continue earned 55m shekels whereas stores planned to close lost 577m shekels. As it turned out, the initial recovery plan was not sufficient.
  • Mega is second to Supersol in the food retailing industry yet not so close behind: Supersol’s market share in 2014 was estimated 18% versus Mega with 9% (a ratio of 2:1). The private discount chains held together 28% [stable 45% attributed to open-air markets, groceries and minimarket stores]. It should be noted that according to predictions (2013-2015) the private chains were expected to gain mostly at the expense of Mega with a small but not negligible slide down for Supersol (The Marker, 30 Dec. 2014) — Mega found itself in a classic disadvantageous ‘sandwich’ position.

From start Mega committed to selling at lower prices than other stores in towns and cities. At the same time, it aimed for each store to be an integral part of its community, so that residents-shoppers will feel at home in their supermarkets. However, Mega did not succeed in maintaining its ‘low price’ position according to price comparisons published over time. It is questionable whether restructuring its chain, following Supersol, was necessary and suitable for Mega. The position of Mega City on prices may have been only weakened and diluted relative to its discount sub-chain. Mega has already had a well-entrenched network of neighbourhood supermarkets with emphasis on lowering cost to consumers — it should have concentrated its efforts on this chain. Yet, Mega did not succeed to keep lower prices as well as invest in the shopping experience and product variety in its stores, potentially conflicting objectives; it did not offer thereof a consistent value proposition.

It is difficult to understand how the owners of Alon Blue Square did not notice what was happening at Mega. They are accused of taking high dividends over time (the owners claim they have been misinformed about real profits, ringing bells from Tesco). The owners may have also acted irresponsibly by means of an over-charging rental policy of its real-estate subsidiary towards Mega’s stores.

The interests of the owners at this stage are vague. Blue Square chose to rent properties to chains that took over stores of Mega-You — was it to salvage Mega or to protect other interests of Blue Square? Proposals published to buy Mega retail chain actually focus on Blue Square Real Estate. Truly, one has to buy the properties in order to be able to continue operating stores in them, but that is only due to a status created by the owners that may now play against Mega. Hence, it could be a major difference if the potential buyer is a retailer or a real-estate developer. It is in the public’s and the food retailing industry’s interest that the buyer is required to take over also the supermarket business of Mega and not dispose of it. It is furthermore important that the supermarket industry has at least one other strong retail chain as a challenger to Supersol, not leaving Supersol over-powered against a competition too dispersed among several small and medium chains.

There is not really a good reason to miss “Blue Square” as a co-operative. A new competitive business ownership and directive has had an opportunity to re-create the supermarket chain and its brand. The chain was re-branded as Mega and yet it disappointed because core components of strategy, culture and implementation were flawed. It is now time to re-invent the concept of the chain and its brand. Nonetheless, the title “Blue Square” at Alon without the supermarket retail chain will be quite void and meaningless.

Ron Ventura, Ph.D. (Marketing)

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From a consumer viewpoint, choice situations should be presented in a clear and comprehensible manner that facilitates consumers’ correct understanding of what is at stake and helps them to choose an alternative that fits most closely their needs or preferences. But policy makers may go farther and design choices to direct the decision-making consumers to a desirable or recommended alternative in their judgement.

It is very likely for Humans (unlike economic persons, or Econs) to be influenced in their decisions by the way a choice problem is presented; even if unintentional — it is almost unavoidable. Sometimes, however, an intervention to influence a decision-maker is done intentionally. Choice architecture relates to how choice problems are presented: the way the problem is organised and structured, and how alternatives are described, including tools or techniques that may be used to guide a decision-maker to a particular choice alternative. Richard Thaler and Cass Sunstein have called such tools ‘nudges’, and the designer of the choice problem is referred to as a ‘choice architect’. In their book, “Nudge: Improving Decisions About Health, Wealth and Happiness” (2009), the researchers were very specific, nonetheless, about the kinds of nudging they support and advocate (1). A nudge may be likened to a light push of a consumer out of his or her ‘comfort zone’ towards a particular choice alternative (e.g., action, product), but it should be harmless and left optional to consumers whether to accept or reject.

Thaler and Sunstein argue that in some cases more action is needed to ‘nudge’ consumers in a right direction. That is because consumers, as Humans, often do not consider carefully enough the choice situation and alternatives, they tend to err, and may not do what would actually be in their own best interest. It may be added that consumers’ preferences may not be well-established, and when these are unstable it could make it furthermore difficult for consumers to find an alternative that fits their preferences more closely. Hence, the authors recommend acting in a careful corrective manner that guides consumers towards an alternative that a policy maker assesses will serve them better (e.g., health-care, savings). Yet they insist that any intervention of nudging should not be imposed on the consumer. They call their approach ‘libertarian paternalism’ — a policy maker may tell consumers what alternative would be right for them but the consumer is eventually left with the freedom of choice how to act. They state that:

To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.

Thaler and Sunstein suggest six key principles, or types, of nudges: (a) Defaults; (b) Expect error (i.e., nudges designed to accommodate human error); (c) Give feedback (nudges reliant on social influence may be included here); (d) Understanding ‘mappings’ (i.e., a match between a choice made and its welfare outcome, such as consumption experience); (e) Structure complex choices; (f) Incentives. The authors discuss and propose how to use those tools in dealing with choice issues such as complexity and a status quo bias (inertia) (e.g., applied to student loans, retirement pensions and savings, medication plans).

Let’s look at some examples of how choice architecture may influence consumer choice:

A default may be set-up to determine what happens if a consumer makes no active choice (e.g., ‘too difficult to choose’, ‘too many options’) or to induce the consumer to take a certain action. Defaults can change the significance of opt-in and opt-out choice methods. A basic opt-in could ask a consumer to tick a box if she agrees to participate in a given programme. Now consider a slight change by pre-ticking the box as default — if the consumer does not like to join, she can uncheck the box (opt-out). A more explicit default and opt-out combination could state up-start (e.g., in a heading) that the consumer is automatically enrolled in the programme and if she declines she should send an e-mail to the organiser. If inclusion in a programme is the default, and consumers have to opt-out of the programme, many more will end-up enrolled than if they had to actively approve their participation. Yet the effect may vary depending on the ease of opting-out (just unchecking the box vs. sending a separate e-mail). Defaults of this type may be used for benign purposes such as subscription to a e-newsletter versus sensitive purposes like organ donation (2).

  • A default option is particularly attractive when the ‘alternative’ action is actually choosing from a long list of other alternatives (e.g., mutual and equity funds for investment).

Making a sequence of choice decisions is a recurring purchase activity. As a simple example, suppose you have to construct a list of items that you want to purchase (e.g., songs to compile, books to order) by choosing one item from each of a series of choice sets.  Presenting choice-sets in an increasing order of choice-set size is likely to encourage the chooser to enter a maximising mind-set — starting with a small set, it is easier to examine more closely all options in the set before choosing, and while the set size increases the chooser will continue trying to examine options more exhaustively. When starting with a large choice-set and decreasing the size thereon, the opposite happens where the chooser enters a simplifying or satisficing mind-set. Thus, over choice-sets, the chooser in an increasing order condition is likely to perform a deeper search and examine overall more options. As described by Levav, Reinholtz and Lin, consumers are “sticky adapters” (3). When constructing an investment portfolio, for instance, a financial policy maker may nudge investors to examine more of the funds, bonds and equities available by dividing them into classes to be presented as choice-sets in an increasing order of size (up to a reasonable limit).

Multiple aspects of choice design or architecture arise in the context of mass customization. Taking the case of price, a question arises whether to specify the cost of each level of a customized attribute (actually the price premium for upgraded levels vs. a baseline level) or the total price of the final product designed. A proponent opinion argues that providing detailed price information for levels of quality attributes allows consumers to consider the monetary implications of choosing an upgraded level on each attribute. It is not as difficult as trying to extract the marginal cost of a level chosen on each quality attribute from the total price. Including prices for levels of quality attributes leads consumers to choose more frequently intermediate attribute levels (compared with a by-alternative choice-set)(4). A counter opinion posits that carefully weighing price information on each attribute is not so easy (consumers report higher subjective difficulty), actually causing consumers to be too cautious and configure products that are less expensive but also of lower quality. Hence, providing a total price for the outcome product could be sufficient and more useful for the customers (5). It is hard to give any conclusive design suggestion in this case.

In a last example, the form in which calorie information is provided on restaurant menus matters no less than posting it. As a recent research by Parker and Lehmann shows, it is practically possible to be over-doing it (6). Consistent with other studies, the researchers find that when posting calorie figures next to food dishes, consumers choose from the calorie-posted menu items with lower calorie content on average than from a similar traditional menu but with no calorie figures. Separating low-calorie items from their original categories of food type (e.g., salads, burgers) into a new group, as some restaurants do, may eliminate, however, the advantage of calorie-posting. While the logic of a separate group is that it would make the group more conspicuous and easier for diners to attend to it, it could make it easier for them instead to exclude those items from consideration. Nevertheless, some qualification is needed as the title given to the group also matters.

Parker and Lehmann show that organising the low-calorie items in a separate group explicitly titled as such (e.g., “Low Calories”, “Under 600 Calories”) attenuates the posting effect, thus eliminating the advantage of inducing consumers to order lower-calorie items. The title is important because it is easier this way for consumers to screen out this category from consideration (e.g., as unappealing on face of it). It is demonstrated that giving a positive name unrelated to calories (e.g., “Eddie’s Favourites”, “Fresh and Fit”) would generate less rejection and make it no more likely to be screened out as a group than other categories. In a menu that is just calorie-posted, consumers are more likely to trade-off the calories with other information on a food item such as its composition and price. But if the consumers are helped to screen the low-calorie group as a measure of simplifying their decision process in an early stage, it means they would also ignore their calorie details.

  • An additional explanation can be suggested for disregarding the low-calorie items when grouped together: If those items are mixed in categories of other items similar to them in type of food, each item would stand-out as ‘low calorie’ and be perceived as different and more important. If the low-calorie items are aggregated on the other hand in a set-aside group, they are more likely to be perceived as of diminished importance or appeal collectively and be ignored together. (cf. [7]). Therefore, creating a separate group of varied items pulled out from all the other groups sends a wrong message to consumers and may nudge them in the wrong direction.

Both public and private policy makers can use nudging. But there are some limitations deserving attention especially with regard to private (business) policy makers. Companies sometimes act out of belief that in order to recruit customers they should present complex alternative plans (e.g., mobile telecoms, insurance, bank loans), which includes obscuring vital details and making comparisons between alternatives very difficult. They see nudging tools that are meant to reduce complexity of consumer choice as playing against their interest (e.g., if choice is complex it will be easier for the company to capture [trap-in] the customer). That counters the intention of Thaler and Sunstein, and they stand against this kind of practice.

In the case of helping customers to see more clearly the relation, and match, between their patterns of service usage and the cost they are required to pay, Thaler and Sunstein propose a nudge scheme called RECAP — Record, Evaluate, and Compare Alternative Prices. The scheme entails publishing in readily accessible channels (e.g., websites) full details of their service and price plans as well as provide existing customers periodic reports that show how their level of usage on each component of service contributes to total cost. These measures that increase transparency would help customers understand what they pay for, monitor and control their costs, and reconsider from time to time their current service plan vis-à-vis alternative plans of the same provider and those of competitors. The problem is that service providers are usually reluctant to hand over such detailed information from their own good will. Public regulators may have to require companies to create a RECAP scheme, or perhaps nudge them to do so.

In the lighter scenario, companies prefer to avoid nudging techniques that work in the benefit of consumers because of concern it would hurt their own interests. In the worse scenario, companies misinterpret nudging and use tools that actively manipulate consumers to choose not in their benefit (e.g., highlight a more expensive product the consumer does not really need). Thaler and Sunstein are critical of either public or private (business) policy makers who conceive and apply nudges in their own self-interest. They tend to dedicate more effort, however, to counter objections to government intervention in consumers’ affairs and popular suspicions of malpractice by branches of the government (i.e., these issues seem to be of major concern in the United States that may not be fully understood in other countries). Of course it is important not turn a blind eye to harmful usage of nudges by public as well as private choice architects.

There are many opportunities in cleverly using nudging tools to guide and assist consumers. Yet there can be a thin line between interventions of imposed choice and free choice or between obtrusive and libertarian paternalism. Designing and implementing nudging tools can therefore be a delicate craft, advisably a matter primarily for expert choice architects.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) “Nudge: Improving Decisions About Health, Wealth and Happiness”; Richard H. Thaler and Cass R. Sunstein, 2009; Penguin Books (updated edition).

(2) Ibid 1, and: “Beyond Nudges: Tools of Choice Architecture”; Eric J. Johnson and others, 2012; Marketing Letters, 23, pp. 487-504.

(3) “The Effect of Ordering Decisions by Choice-Set Size on Consumer Search”; Jonathan Levav, Nicholas Reinholtz, & Claire Lin, 2012; Journal of Consumer Research, 39 (October), pp. 585-599.

(4) “Contingent Response to Self-Customized Procedures: Implications for Decision Satisfaction and Choice”; Ana Valenzuela, Ravi Dahr, & Florian Zettelmeyer, 2009; Journal of Marketing Research, 46 (December), pp. 754-763.

(5) “Marketing Mass-Customized Products: Striking a Balance Between Utility and Complexity”; Benedict G.C. Dellaert and Stefan Stremersch, 2005; Journal of Marketing Research, 42 (May), pp. 219-227.

(6) “How and When Grouping Low-Calorie Options Reduces the Benefits of Providing Dish-Specific Calorie Information”; Jeffrey R. Parker and Donald R. Lehmann, 2014; Journal of Consumer Research, 41 (June), pp. 213-235.

(7) Johnson et al. (see #2).

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The World Health Organization (WHO) created a storm of confusion and panic when it published on 26 October (2015) its warning on cancer risks from processed meat as well as red meat. The warning arose as the outcome of a year-long effort by a committee of 22 experts, led by WHO’s International Agency for Research on Cancer (IARC), who reviewed and analysed findings from 800 studies carried out in past years across the globe. The warning itself, alarming enough, is not disputed; the problem concerned here is with the way the IARC made its warning announcement to the public.

Before referring to the content of the cancer warning, it should be emphasised that this research project did not bring any new data as evidence but analysed collectively results from previous studies at various research institutions (i.e., it was a meta-analyis type of research; originally published in the medical journal Lancent Oncology). Thus, warnings about the risks of cancer in consuming larger amounts of processed meat and red meat, and findings that support them, are not new. The IARC added an important authoritative backing with the intention that its voice will receive greater public attention and better succeed in persuading consumers to modify their behaviour. However, the announcement was not made cleverly, and without corrective measures may end in failure of the IARC’s initiative.

The warning of the IARC is actually composed of two warnings, at two different levels of risk. The IARC distinguished in its press release (no. 240) between two categories of risk to which it assigned processed meat and red meat as follows:

Category 1: “Carcinogenic to humans”. Processed meat is classified in this category together with asbestos, tobacco (smoking), alcohol and arsenic. It is causally linked to bowel cancer, particularly colorectal cancer — IARC states that the classification relies on sufficient evidence in humans that consumption of processed meat causes colorectal cancer (i.e., colon and rectal). Processed meat relates to meat products that have gone through processes of curing, salting, smoking and fermentation to improve their preservation. They include popular products like sausage, hot dog, bacon, ham, and salami.

Categroy 2A: ” Probably carcinogenic”. The classification of red meat in this category is based on limited evidence of its causal link to cancer in humans but strong mechanistic evidence of a carcinogenic effect. Red meat includes beef & veal, lamb & sheep, and pork (e.g., in fresh cuts or mixes).  It has been identified as a probable cause of colorectal cancer but also associated with pancreatic and prostate cancers.

  • Unexplained in the press release, a mechanistic effect relates to the effect of chemical substances or processes at the individual level (i.e., on a single organism). It is enough to suggest here that stating ‘strong mechanistic evidence’ is ambiguous to most people since they cannot understand the significance (even after definition).

There can be little wonder that the announcement of IARC alarmed and puzzled consumers, plausibly holding their heads in their hands and saying: “What should we do now about those meat products that we eat?” Because so many meat products or food items seem to be covered in those warnings, consumers are justified in feeling lost about the drastic reduction in menu that is looming, especially for the more carnivore ones, vis-à-vis a fear of cancer. The news media has tried to fill some of the void with the help of health, food and diet experts, but with little help directly from WHO, in answering questions such as what food made of meat can one continue to consume and how much. Some experts, nonetheless, contributed positive recommendations that go beyond meat consumption.

With regard to the level of risk, the IARC did indicate the estimate of its experts that eating daily 50 grams (1.8 ounce) more of processed meat increases the risk of contracting colorectal cancer by 18%. In a separate comment to Reuters, Dr. Kurt Strife of IARC clarified that the risk of developing colorectal (bowel) cancer in an individual from eating processed meat remains low but this risk increases when a greater amount of meat is consumed. The issue of quantity consumed is material as reflected also in recommendations from other sources. However, the IARC apparently did not see it as its responsibility to explain and recommend to the public how to act following its warning. In the official announcement to the press, Dr. Christopher Wild, director of IARC, called on governments and international regulatory agencies to “conduct risk assessments, in order to balance the risks and benefits of red meat and processed meat and to provide the best dietary recommendations”. The call on other agencies to act is commendable but the self-exemption by IARC is flawed.

The choice of IARC to couple its warning on processed meat as a cause of cancer with the warning on red meat as probable cause raises another problem. First, it produced an excessive warning with an overwhelming effect, asking the public to face a health limitation on a broad range of meat products at once. Consumers were likely to confront the joint-group heading “processed meat and red meat” before they could grasp the difference in level of risk; next they might assess more deeply the specific classes of meat and its products included. Second, adding at this time the warning on red meat could distract consumers from attending to and heeding the more serious cancer warning on processed meat, that is based on more conclusive evidence. It seems most acceptable from academic and clinical perspectives to publish the two warnings together, and it is understandable in regard to public health that the IARC would not want the risk associated with red meat to be neglected. Yet, when it comes to informing the public in the general media, the joint-warning could be superfluous and less effective in persuading consumers about the need to change their diet in view of cancer risks of either processed meat or red meat.

In advertising, brands are often cautioned that over-reaching product claims or promises might be received by consumers with disbelief and suspicion and thereafter be discarded. Conversely, excessive or too harsh warnings might induce disbelief and paralysing fear followed by resentment and rejection. On either side, messages that are perceived as excessive do not invoke trust in consumers, and in this case, not gaining their trust could be detrimental.

Another flaw in the press release that raised particular rage is the insinuated equivalence between eating processed meat and smoking tobacco. Associations in the meat industry attacked this equivalence and the research as a whole (e.g., UK, US, Canada, Australia), and government officials and other experts expressed their respective reservation in the media. It has been noted that there are grades in level of risk among causes of cancer in the first category, and that smoking remains the most dangerous single cause of cancer, much riskier than eating processed meat; excessive drinking of alcohol also bears a higher risk than the latter. But the mere listing of all those causes of cancer together, flatly as members in the same category, makes them equal and non-distinguishable to consumers. The IARC managed to grab attention alarmingly but probably not in the way they desired.

Different interpretations were suggested in the media, mostly in attempt to explain the meaning and implications of the warnings and to calm some of the public scare that was giving signs. Special attention was dedicated to differentiating between the cases of processed meat and red meat. The British Guardian told its readers that it was not advised to stop eating any processed meat or red meat. However, they clarified, consumption of processed meat should be cut considerably, particularly for those who are in habit of eating these food items daily (e.g., in breakfast). In addition, consumers are recommended to sanction their consumption of red meat, eating more moderately (“Processed Meats are Ranked Alongside Smoking as Cancer Causes – WHO”, The Guardian Online, 26 October 2015).

  • It is noted that in its press release the IARC stressed that their findings support previous recommendations to limit the intake of those types of meat, and in a later clarification to the media they iterated that IARC did not recommend to stop eating those meat products. In the press release Dr. Wild also acknowledges the nutritional value of red meat, confirming that there are benefits to consuming it.

The Guardian brings specific recommendations from the World Cancer Research Fund that people should not eat more than 500 grams of red meat (beef, sheep and pork) a week, and to reduce as much as possible their consumption of processed products (e.g., ham, bacon, salami). Dr. Elizabeth Lund, an independent consultant in nutrition and gastrointestinal health, offers yet a more balanced approach in face of IARC’s warnings with helpful practical recommendations to consumers: “A much bigger risk factor is obesity and lack of exercise. Overall, I feel that eating meat once a day combined with plenty of fruit, vegetables and cereal fibre, plus exercise and weight control, will allow for a low risk of colorectal cancer and a more balanced diet.” 

Beef products attract great attention in their defence. Advocates emphasise the importance of how beef items are prepared and the method of heating. The problem is argued to be mostly with products prepared and packaged in advance by mass food manufacturers, but that is only a partial factor in the generation of cancer risk. Beef is often recommended for its content of iron [as well as proteins and other nutritional components.] However, scientists suggested that iron may lead to release of nitrates that act as a carcinogenic agent. This process may happen during preparation, grilling or frying, but also during digestion. According to this assertion, the main cause for alarm is attributed not to the ingredients added to meat but to compounds created during the heating of meat (e.g., quick, high temperature) or digestion. Beef items like hamburgers and kebab prepared at home or in small private-business premises from fresh mixes could be safer, but it does not eliminate the risk completely. This issue appears as a sensitive subject of controversy and friction between large manufacturers, small butcher enterprises, and restaurants (competing among themselves) and health agencies and experts.

Raising fear in consumers can move them to take necessary action to reduce the risk (e.g., not driving after drinking alcohol) — research has provided support for a positive effect of fear inducement. Scaring people, such as by an excessive demonstration of a threat (e.g., car accidents) or its scope, may cause a paralysing effect but even that may not be the main problem. Goldstein, Martin and Cialdini suggest that a greater problem occurs when inducing fear without guiding people how they can reduce the danger. If the producer of the risk warning does not accompany it with recommendations for action in order to reduce it, a consumer is left with the fear with no way out. He or she is more likely in this situation to deal with the fear by “blocking-out” the message, dissociating oneself from the threat, and indeed be paralysed into taking no action (1). This is where IARC failed — they introduced the fear by itself. It was IARC’s responsibility as issuer of the warning to recommend actions to consumers like how to change their diet and taking other supportive measures.

Another viewpoint concerns the way consumers approach the risk and respond to it. Pennings, Wansink and Meulenberg propose decoupling the risk perception (i.e., how consumers assess the level of uncertainty) from the risk attitude (e.g., the extent to which consumers are risk-aversive) in anticipating consumer response to a risk (e.g., decreased food safety) and confronting it. What counts first is the chance a consumer perceives that he or she will be personally affected and then how to deal with it (e.g., stop or reduce consuming the risky food). Furthermore, the researchers suggest that segments which differ in their risk perception and attitude, and how they weigh them, should be distinguished; they may require each a different treatment (2).

The case here is different from the crisis case studied by Pennings et al. (‘mad cow disease’) because it did not arise due to an epidemic outbreak or a company’s malpractice (e.g., crisis of Remedia’s milk formulae for babies in Israel) — it is not a particular event but a more ongoing condition. Yet, at this point in time it is a crisis for consumers evoked by a new warning about a health threat. Health authorities and agencies will have to decide, for example, if the more appropriate strategy in any market or segment is to provide clearer information about the level of risk (reducing uncertainty) or tighten controls and supervision of food production of meat (i.e., because consumers do not tolerate cancer risk at almost any level of probability).

  • Special consideration may also be needed to persuade segments like young consumers in their 20s who do not care how their behaviour will impact their health thirty years away, partly because they simply cannot imagine what bad impact it could have — they are concentrated on enjoying their lives today; or consumers in lower socio-economic decile who eat those types of meat products (e.g., hamburgers, hot dogs) out of necessity, because these are cheaper food items for their meals.

The researchers and officials at IARC and WHO are clearly concerned about the possibility that consumers will become ill with cancer due to the amounts of processed meat and red meat that they eat, aiming at causing consumers to change their diet habits and reduce the threat and suffering. But they left a void by launching an incomplete persuasion effort — it was taken as over-threatening on one hand and lacking guidance on the other hand through practical recommendations to consumers how to act to improve their health prospects. In order to increase the chance that consumers will heed the risk and act as desired the IARC will be required to provide guidance and support to the public on its own and through collaboration with other agencies for a quicker response to consumer confusion and fear.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Yes! 50 Secrets from the Science of Persuasion; Noah J. Goldstein, Steve J. Martin, & Robert B. Cialdini, 2013; Profile Books.

(2) A Note on Modeling a Consumer Reaction to a Crisis: The Case of the Mad Cow Disease; Joost M.E. Pennings, Brian Wansink, & Matthew T.G. Meulenberg, 2002; International Journal of Research in Marketing, 19, pp. 91-100.

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The EXPO 2015 exhibition in Milano, that is coming to a close at the end of October, has concentrated on the future of agriculture and food on our planet. The urgency of these topics is elevated by adverse conditions of climate change (warming) and shortage in water, predicted to worsen further. The EXPO is generally a prime opportunity for countries to promote their nation-brands. This time countries were invited to showcase their advanced scientific and technological capabilities by offering programmes and solutions to overcome environmental and economic challenges of agriculture and food provision.

The supermarket retailer Coop of Italy has yet taken a different direction, within the realm of its business specialisation: Coop Italia proposes at EXPO 2015 its vision of how shopping will be conducted in future supermarkets. They have put on stage a functioning model of a supermarket store (Future Food District / il supermercato del futuro) where detailed product information is displayed on large digital screens and check-out and payment are performed on computer-automated terminals. Almost obviously, such a supermarket will require even fewer human service personnel than met today in the store.

  • Coop Italia covers online (in Italian) a range of aspects such as food retailing, shopping, technology, and the future of food itself.

Coop Italia: Future Food District at EXPO 2015 (3)

It should be emphasised that the experimental supermarket of Coop at EXPO Milano is not just for demonstration but visitors of the site can practically collect food products into their shopping baskets and purchase them at the end of their trip. In the store’s front and on the upper level a visitor/shopper may find fresh produce and packaged food products displayed on shelves. From there he or she may descend to the lower level to find mostly refrigerated and frozen products. If products were actually selected from the display area, the shopper may go to the self-service scan-and-pay terminals and finalise the purchase (payment can be made by credit and debit cards or in cash).

The prospective format offers, according to Coop Italia, new interactions between consumers, products and producers. Mainly, consumers can observe and read from digital display screens much more information on products and their producers than has been traditionally possible in supermarkets. The screens are hanging usually above shelf cabinets or refrigerators at about head level. When the shopperCoop Italia: Future Food District at EXPO 2015 (4) points to a particular product’s title and image on the nearest screen, a variety of details in text and graphics, and a larger pictorial image of the product, will appear on screen. Besides the essentials of product name, size measures and price, additional information may be presented on product components and nutritional values (e.g., calories, sugar, salt, fat, protein, fibres), and on its source (e.g., producer company and country of origin). This facility should save shoppers the effort of tearing their eyes while reading small print on product packages, where packaging is relevant at all. The information is also displayed in a more friendly and comprehensible form (e.g., using understandable terms, illustrated visually in graphic charts). These enhancements of the future shopping experience are much about advanced display technology and data visualization.

Occasionally the visitor/shopper may also see some sales statistics and more background on growing and production of the product of interest with emphasis on nutritional and health implications. Coop Italia suggests that presenting more of these kinds of information will give better direction to consumers on preferred or recommended food products in future times (e.g., given new constraints on food provision). Thus Coop connects to the general issue of the future of food at the focus of EXPO 2015.

Coop Italia: Future Food District at EXPO 2015 (1)

Being on site, the space of the supermarket looked elegant and modern. The large black screens hanging over, positioned in an angle as “\”, definitely signalled a change in the visual scene of the store. It was the first cue to be noticed as to how the future supermarket could be different. The screens were easily discernible but their arrangement was not in any way disturbing to the eye — one could quickly get used to them. Activating the display and viewing information for any chosen product was intriguing and to some extent even entertaining. On one hand it felt like “playing” while shopping, on the other hand it increased interest in products considered, if only for curiosity and not for purchase. The information presented was usually helpful and of practical value for decision-making. Overall, the future supermarket model appeared to enrich the shopping experience.

There were some impediments, however, in practice. Making the screen to display information related to a desired product was not always smooth and easy. It was not clear, for instance, if one should raise a chosen product item up to the screen above or just point towards the image of the relevant product (visitors could be seen trying both). Whatever sensors were supposed to identify the gesture of the shopper’s hand or the product itself, they occasionally were not satisfactorily responsive. Most screens were located on-top so that shoppers could not touch them, and therefore the question was: How do I cause the system to recognize my choice of product. But perhaps it was also a matter of some more training by the shopper to get it right (gamers should have better success with such a system).

Screens on-top and as panels on the door-side of refrigerators

Screens on-top and as panels on the door-side of refrigerators

Additionally, sometimes it felt the information displayed changed too quickly, not giving enough time to review parts of the data provided. Information on each product was usually screened in two or three “shots” (i.e., display of first portion of product information replaced by display of the next portion). Since the shopper has no control of the duration of display, it could be sometimes irritating when, as a shopper, I could not review a data figure of interest in time. But one should remember that usually a shopper is not alone and the same screen may have to serve multiple customers within a few minutes, so a single shopper may be allowed just a brief time to inspect the most needed information. The stress on shoppers might be felt particularly during peak hours of shopping.  Hence, shoppers may benefit from the convenience of viewing information on large screens, but when necessary they should be able to toggle to the private screens on their mobile devices to continue their review of product information.

  • It is noted that Coop Italia provides QR codes for products that shoppers can scan and access the product information on their own devices (and possibly conduct the purchase online).

Regardless of the technology employed, the Coop deserves congratulating for their visually appealing layout and arrangement of product display, and its orderliness and cleanliness. It was evident that great care was invested in setting-up and housekeeping the supermarket. Since this is indeed an experimental stage for the future supermarket, it is reasonable and expected  that work to improve the performance and usability of the technology installed will continue. When it arrives, the younger generations will most likely be prepared for this concept. In summary, the shopping experience ‘nel supermercato del futuro’ was positive and encouraging.

 


How is Coop Italia perceived following its initiative? Naturally, the Coop would expect its Future Food District initiative to have a positive effect on the company’s image. Feedback they received from consumers following their visit of the future supermarket included (most frequent responses, cited from video clip):

  • The Coop demonstrates that it is modern and up-to-date (48%)
  • The Coop demonstrates that it has at heart the future of the planet and its inhabitants (29%)
  • The Coop demonstrates that it keeps in line with the new requirements of consumers (27%)
  • The Coop anticipates the future (19%)
  • The Coop is looking to generate curiosity and interest (13%)

But 16.5% also indicated that the Coop has gone too much ahead of its time, that consumers are not ready yet for all this technology, and 15% argued that the Coop may risk distancing those who are not familiar with the technology. Hence, the technological advances may be welcome, yet it could be too early to implement at this time.

 


The EXPO exhibition in Milano this year was enormous in scope and fascinating; it was well-organised and instructive. All countries presented products and other artefacts, images and models standing for some of their national and cultural assets and symbols,   emphasising, as much as possible for each country, environmental considerations and priorities. The differences in scale between exhibits of countries, however, were striking. There was also large diversity in level of sophistication of presentation, in the technologies used and other display aids applied. In particular, some countries focused more on high-tech techniques while others relied mainly on low-tech features.

Country exhibits hosted in shared-pavilions by theme (e.g., Cacao and chocolate, coffee, rice, bio-Mediterranean, arid zone) were modest; those countries also related  moderately to projects or developments to resolve agricultural and food challenges. But even among smaller exhibits it is unfair to talk of homogeneity because some countries were enlightening exceptions who managed to put up impressive and interesting exhibits.

Countries exhibiting in their own pavilions blended more expansively between their traditional assets and their programmes and technological solutions dedicated specifically to the challenges of future agriculture and food. It must be noted that some pavilions were impressive in their architecture per se. But the country pavilions also proved that size is not everything — diversity in level of effort invested, ingenuity and richness was discernible among those pavilion exhibitions. Furthermore, it also did not seem that variation in quality, originality and interest of exhibits was accounted for merely by differences in economic power or resources.

Israel Pavilion at EXPO 2015: A Vertical Field

Israel Pavilion at EXPO 2015: A Vertical Field

 

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Obama’s administration is taking a bold step in fighting overweight and moreover obesity: requiring chain restaurants and similar food establishments to post information on food calories for their items or dishes on menus and menu boards. The new directive published in November 2014 by the United States’ Food and Drug Administration (FDA) is mandated by the Affordable Care Act passed by Congress in 2010. The expectation is that restaurant customers will consider the nutritional values, particularly calories, of  food items on the menu if the information appears in front of them, inducing them to make more healthy choices. It is estimated that Americans consume a third of their calories dining out. But will consumers, who are not voluntarily concerned about healthy dietary, change their eating behaviour away-from-home just because the information is easily and promptly available?

The new requirements of the FDA apply to restaurant chains with 20 or more outlets, including fast food chains — likely a primary target of the new directive. Detail of total calorie content of food items should appear on print menus (e.g., at full-service restaurants) and menu boards positioned above counters for ordering (e.g., at fast-food restaurants). The rule covers meals served at a table or taken to a table by the customer to be consumed, take-away food like pizzas, and food collected at drive-through windows. Also included are sandwiches-made-to-order at a grocery store or delicatessen, coffee-shops, and even ice-cream parlours. (1)

  •  The FDA directive also refers in a separate section to food sold through vending machines by owners or operators of 20 or more machines.

Calorie content in a food item (actually kilocalorie) indicates the amount of energy it provides. Usually the energy intake of consumers from meals, snacks and refreshments is more than the body requires, and the surplus not “burned”   accumulates and adds to body weight. The rule maintains that additional information on components such as calories from total and saturated fat, sodium, carbohydrates, protein, and sugars should be made available on request in writing. Critics could argue that while a summary measure of energy is an important nutritional factor, other nutritional values as those mentioned by the FDA, and more (e.g., fat in grams, Vitamins A and C), also need to be transparent to consumers. Practically, loading menus, and foremost menu boards, with too many nutritional details may be problematic for both business owners and their customers. Therefore, there is logic in focusing on an indicator regarded of higher priority. Nonetheless, restaurants should offer a supplementary menu with greater nutritional values to customers who are interested. Again, the question is how many customers will request and use that extra information.

The food service industry overall reacted positively to the new rules. The National Restaurant Association in the US (representing 990,000 restaurant and food-service outlets) is satisfied with the way the FDA has addressed its major concerns. Contention remains over food sold in amusements parks and cinemas, and regarding fresh sandwiches and salads and ready-to-eat meals made by supermarkets for individual consumers (i.e., single-serving). In fact,  several restaurant chains have already been displaying nutritional information on menus voluntarily for several years to cater for more health-conscious customers and improve their retail-brand image (e.g., Starbucks, McDonalds, Subway). Some chains also provide detailed nutrition information and assistant tools for customers to plan their meals on the chains’ websites. It should further be noted that regulations for posting nutrition information in food-service establishments are in place at the level of local authorities in various cities and counties across the US. Business and regional administrative initiatives are not new in the US as well as in Canada and other countries. However, such measures will be obligatory in the US at a country-level within a year ahead.

Consumers are likely to have some general guidelines (a schema of rules) in memory that they can consult on what is more or less healthy to eat and how much to eat of different items (e.g., “high levels of calories, fat and salt in hamburgers and french fries”, “cream cakes are rich with calories and sugar”). When arriving to a restaurant or coffee-shop, the more conscious consumer may apply those guidelines to compose one’s meal with greater care for his or her health. Yet, the ability to extract accurate nutrition values of food items offered on the menu is likely to be rather limited — our memory is not accurate and retrieving information may also be biased by prior goals or hypotheses. Even if we consider only total calories, we would recall gross estimates or value ranges for general food categories. Consumers furthermore tend to take into account only the alternatives explicitly presented and attribute information available on them in a choice setting (a “context effect”). Information not provided (e.g., has to be retrieved from memory) is likely to be ignored. Customers anxious enough may pull out a mobile device and look up some more accurate nutritional information from an app or a website of the company or a third-party source. But for most consumers, it should appear, there is strong logic as well as justification to provide the nutrition information on specific food items easily accessible at the food outlet to allow them to consider it on-the-spot in their choices.

A probable cause of resistance from consumers to take into account the nutritional content of the food they are about to order is that this might spoil their pleasure of eating the meal.  People commonly prefer to concentrate on which items to order that will be more enjoyable for them on a given occasion. The negative nutritional consequences of the desired food could be considered as ‘cost’, just like monetary price and perhaps even worse, a notion consumers would like to avoid. There is also a prevailing belief that healthier food is less tasty. To make consumers more receptive they would have to be persuaded beforehand that this belief is false or that nutritional components have both positive and negative consequences to consider. Surely consumers have to account for constraints on their preferences; health advocates have to help and ease any barriers to embracing health constraints, or turn pre-conceived constraints into consumers’ own preferences.

We may gain another insight into consumer food choices by considering the comparisons consumers utilise to make decisions. Simonson, Bettman, Kramer and Payne (2013) offer a new integrative perspective on the selection and effect of comparisons when making judgements and choice decisions — how consumers select the comparisons they rely upon vis-à-vis those they ignore, and what information is used in the process. They propose that the comparisons consumers seek have first to be perceived relevant and acceptable responses to the task (e.g., compatible with a goal); these comparisons fall within the task’s Latitude of Acceptance (LOA). They also need to be justifiable. Then, consumers will prefer to rely upon comparisons that are cognitively easier to perform (i.e., greater comparison fluency), given the information available on options. Importantly, even if bottom-up evidence suggests that certain comparisons require less effort to apply, these will be rejected unless they are instrumental for completing the task. Information factors that can facilitate the comparison between options may affect, however, which comparisons consumers perform among those included in the LOA. The following are factors suggested by the researchers that increase the probability that a comparison will be performed: attribute values that can be applied “as-is” and do not need additional calculation or transformation (i.e., “concreteness effect”); alignable input (i.e., values stated in the same units); information perceptually salient; and yet also information that can generate immediate, affective responses. (2)

Let us examine possible implications. Suppose that you visit a grill bar-restaurant of a large known chain. You have to choose the food composition of your meal, keeping with one or more of the following personal goals: (a) “not leave hungry” (satiated); (b) pleasure or enjoyment (taste/quality); (c) “eat healthy” (nutrition); (d) “spend as little as possible” (cost). Calorie values are stated on menu in a column next to price. If the primary goal is to keep a healthy diet you would most likely use calorie information to compare options. However, if “eat healthy” is not a valued goal for you, there is greater chance that calorie information will be ignored — even if values of calories are very easy to read-out, assess and compare. They may be perceived as distraction from considering and comparing, for instance, the ingredients of items that would determine your enjoyment from different food options. Consumers often have a combination of goals in mind, and thus if your goals are nutrition and price, there is an advantage to displaying numeric calorie and price values next to each other across items. It would be more difficult to weigh-in calories with information on ingredients that should predict enjoyment or satiation as your goals. Therefore, it can be important to display nutritional values in a format that facilitates comparison, and not provide too many values. Yet, if “eat healthy” is not one’s goal all those measures are unlikely to have much effect on choice.

  • Some would argue that a salient perceptual stimulus can trigger consumer response in the desired direction even unconsciously. That is a matter for debate — according to the viewpoint above strong perceptual or affective stimuli will not be influential if the consumer’s goal is driving him in another direction.
  • Given the growing awareness to health, justifying decisions based on calories to others may be received more favourably. Can this be enough to induce consumers to incorporate a nutrition comparison in their decision when it is not their personal goal?

A research study performed by the Economic Research Service (ERS) of the US Department of Agriculture (USDA) examined consumer response to display of nutrition information in food service establishments, comparing between fast-food and full-service chain restaurants. The researchers (Gregory, Rahkovsky, & Anekwe, 2014) show that consumers who see nutrition information have a greater tendency to use it during choice-making in full-service restaurants; overall, women are more sensitive to such information than men (especially using it in fast-food restaurants). Furthermore, they provide support that consumers who are already more conscious and care about a healthful diet are more likely to react positively to nutrition information in restaurants:

  • Consumers who inspect always or most of the time the nutrition labeling on food products purchased in a store (enforced in the US for more than twenty years) are more likely to see and then use the nutrition information presented in full-service restaurants (notably, 76% of those who inspect the store-food labeling regularly use the information seen in the restaurant versus 18% of those who rarely or never use the labeling on store-food).
  • Additionally, the researchers find that a Healthy Eating Index score (measuring habitude to using nutrition information and keeping a healthy diet) is positively correlated with intention to use nutrition information in fast-food or full-service restaurants (those who would often or sometimes use the information in full-service restaurants score 57-54 versus those who would use it rarely or never who score 50 on a scale of 1 to 100).

Gregory and his colleagues at USDA-ERS argue that following these findings, displaying nutrition information on menus at food-away-from-home establishments may not be enough to motivate consumers not already caring about healthful diet to read and use that information — “It may be too optimistic to expect that, after implementation of the nutrition disclosure law, consumers who have not previously used nutrition information or have shown little desire to use it in the future will adopt healthier diets.”

A research study in Canada involved an interesting comparison between two hospital cafeterias, a ‘control’ cafeteria that displays limited nutrition information on menu boards and an ‘intervention’ cafeteria that operates an enhanced programme displaying nutrition information in different formats plus educational materials (Vanderlee and Hammond, 2014). The research was based on interviews with cafeteria patrons. A significantly higher proportion of participants in the ‘intervention’ cafeteria reported noticing nutrition information (80%) than in the ‘control’ cafeteria (36%). However, among those noticing it, similar proportions (33% vs. 30%, respectively) stated that the information influenced their item choices. Hospital staff were more alert and responsive to the information than visitors to the hospital and patients. This research also indicates that customers who use more frequently nutrition labels on pre-packaged food products are also more likely to perceive themselves being influenced by such information.

Vanderlee and Hammond subsequently found lower estimated levels of calories, fat and sodium in the food consumed in the ‘intervention’ cafeteria than the ‘control’ cafeteria (using secondary information on nutrition content of food items). In particular, customers at the ‘intervention’ cafeteria who specifically reported being influenced by the information consumed less energy (calories).(3)

Actions to consider: Fast-food restaurants may place menus with extended nutrition information, beyond calories, on or next to the counter where customers stand for ordering. Full-service restaurants may place extended menus on tables, or at least a card inviting customers to request such a menu from the waiter. It may be advisable to add one more nutrition value next to calories as a standard (e.g., sugars because of the rise in diabetes and the health complications it may cause). Notwithstanding, full-service restaurants could be allowed to implement the rule during the day (e.g., for business lunch), but in the evening spare customers the pleasure of dining-out as entertainment without worries. Nonetheless, menus with nutrition information should always be available on request.

Nutrition information displayed on menus and menu-boards can indeed help consumers in restaurants, coffee-shops etc., to make more healthy food choices, but it is likely to help mostly those who are already health-conscious and in habit of caring about their healthful diet. Information clearly displayed has a good chance to be noticed; yet, educating and motivating consumers to apply it for a healthier diet should start at home, in school, and in the media. A classic saying applies here: You can lead a horse to the water but you cannot make it drink. Nutrition information may be a welcome aid for those who want to eat more healthy but it is less likely to make those who do not care about healthful diet beforehand to use the information in the expected manner.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Overview of FDA Labeling Requirements for Restaurants, Similar Food Retail Establishments and Vending Machines, The Federal Food and Drug Administration (US), November 2014 http://www.fda.gov/Food/IngredientsPackagingLabeling/LabelingNutrition/ucm248732.htm; Also see: “US Introduces Menu Labeling Standards for Chain Restaurants”, Reuters, 24 Nov. 2014. http://www.reuters.com/article/2014/11/25/usa-health-menus-idUSL2N0TE1KP20141125

(2) Comparison Selection: An Approach to the Study of Consumer Judgment and Choice; Itamar Simonson, James R. Bettman, Thomas Karamer, & John W. Payne, 2013; Journal of Consumer Psychology, 23 (1), pp. 137-149

(3) Does Nutrition Information on Menus Impact Food Choice: Comparisons Across Two Hopital Cafeterias; Lana Vanderlee and David Hammond, 2013; Public Health Nutrition, 10p, DOI: 10.1017/S136898001300164X. http://www.davidhammond.ca/Old%20Website/Publication%20new/2013%20Menu%20Labeling%20(Vanderlee%20&%20Hammond).pdf; Also see: “Nutrition Information Noticed in Restaurants If on Menu”; Roger Collier; Canadian Medical Association Journal, 3 Aug., 2013 http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3735740/

 

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