Are nutrition warning labels effective in dissuading consumers from junk food?

In 2016, Chile phased in a comprehensive and mandatory food labeling law designed to warn consumers about the risks of junk food. To do this, the law requires that if a product contains excessive amounts of certain nutrients (such as sugar) that are considered harmful to health when consumed in large quantities, the product must carry mandatory warning labels on the packaging. Moreover, several other countries have already adopted these new warning labels.

This has left researchers wondering if the new regulation will have any effect. After conducting extensive research, the results showed that the impact of warning labels varies by product category and demographic group.

The researchers study, published in the current issue of the journal INFORMS Marketing science titled “Determining the Impact of Food Labeling on Consumer Behavior” by Sebastián Araya, Carlos Naughton and Daniel Schwartz, all from the University of Chile and affiliated with the Institutes of Market Imperfections and Public Policy (MIPP) and Complex Systems Engineering (ISCI) and Andres Elberg of the Pontifical Catholic University of Chile.

“During the transition to compliance, store shelves included existing stock of packaging (without warnings) prior to the adoption of the regulation, as well as new products whose packaging was compliant with the new regulation,” Elberg says. “This allowed us to collect daily data on label the status of specific goods (under the Universal Commodity Code [UPC] level) and watch for variations in buying patterns across time and stores.”

The study authors combined label information with individual-level transaction data from a single retailer. They focused on three categories that included many products expected to require warning labels: breakfast cerealschocolate and cookies.

The researchers found that consumer response to warning labels varied by product category.

“In the breakfast cereal category, warning labels reduced purchases by 6.2%,” says Schwartz. “In the chocolates and biscuits categories, we found inconclusive evidence, meaning we could not see a noticeable impact on sales.” He concludes: “Food labeling information may be necessary but not sufficient to motivate consumers.” a healthier choice.”

“The breakfast cereal category has opened up the most,” says Naughton. “Our estimates from the household analysis show that middle- and low-income consumers, as well as families with children, are really sensitive to a warning labels. These findings are based on actual purchasing behavior, which may differ from what people say.”

“This effect is probably best explained by a marked shift in purchases from unhealthy to healthy foods and, to a lesser extent, a reduction in purchases in that category,” adds Araya.