Mr. Conway, in your testimony you say, and I quote, that "mandatory menu and menu board labeling requirements would be unworkable for most restaurants." So let's break that down. What is workable for some restaurants?
That's an excellent question, Councilwoman, and I think you'll find that restaurants are in the hospitality business, so they succeed and stay in business by offering customers the choices that they're seeking, which is why more and more restaurants, going back to John's comment 30 years ago with his company, started providing information, and more and more today you find restaurants voluntarily providing the information either on their website or a poster or through whatever 104 10/9/07 - PUBLIC HEALTH - BILL 070153 mechanism might work for them. But for many restaurants, when I say it's unworkable from a practical standpoint, some restaurants, their menus are changing on a daily basis. They may have -- a different brand of mayonnaise on a sandwich can change the caloric content, for example, or different chefs may put in a different amount of a particular ingredient when making a sauce. So it could be very difficult, if not impossible, for certain types.
My liver is not on the Capital Grille menu, but I order it. So they don't have it on there, but they will accommodate me when I ask for it.
We'll make it for you. If I may add, if I may add another comment, I guess to the point we're trying to make here with the 105 10/9/07 - PUBLIC HEALTH - BILL 070153 legislation and really, I guess, so you understand how difficult it would be for a lot of restaurants, not even including the Capital Grille, but you have to consider who else is in this category. It's not just a Morton's where you might think on the outside, Okay, this is a straight-forward steak, how difficult can that possibly be, you're not doing much to it. I give you that much, but if you read in the paper, look at Stephen Starr's organization, at the rate they're growing, within three years Buddakan will be considered a chain. So if you walk into a Buddakan, you're asking for them in the City of Philadelphia to have all of that information. And I know Chef Swiderski very well. His menu changes a lot. And it has been difficult for us to get that information, and on top of which, a lot of the ingredients that we use, especially at a Capital Grille I can say personally I know we use, come from small farms in New England or wherever 106 10/9/07 - PUBLIC HEALTH - BILL 070153 else we get, say, the porcini mushrooms for our porcini rub Delmonico. It would take for me to turn back around today and say, Okay, I need to find out your information, how are you growing it, what kind of water is being used, what are you fertilizing it with and this, that and the other. It just -- it would trickle down so much further down that it would be almost -- it would affect how we market ourselves, as well as what items we produce. That item itself, which has right around about different 15 ingredients in the rub, would be difficult for us on a consistent basis to give accurate numbers, and eventually we'll probably have to take it off the menu. It is our most popular item, but that reason alone it would require us to take it off the menu. And, like I said earlier, I think it was the testimony that it is vitally important for some individuals to know exactly how much sodium is in there, how much fat content 107 10/9/07 - PUBLIC HEALTH - BILL 070153 is there, that we would be putting ourselves at risk, legally at risk, to say, Yeah, that's how much is in there. And if something, God forbid, happened to an individual thinking that's how much was in there and it really wasn't, it would be bad for everybody. So that's what we said. I think there's different ways of getting things done, and the blanket "put it on the menu," it would be difficult for a lot of restaurants. And maybe Subway had figured out a way to do it, but I think in their system it is more of a production line type situation. You can kind of see what you got. There's not as much variety as maybe some other restaurants.
Mr. Hatib, you also mentioned that the proposed menu changes would expose your company to unthinkable amounts of lawsuits. Could you expand a little further about that?
Well, what I mean 108 10/9/07 - PUBLIC HEALTH - BILL 070153 by that, ma'am, is, let's say -- the guest wants what they want, how they want it, when they want it. We give it to them wherever they want, how they want it. If we said a cheeseburger contain this much whatever and somebody come and customize the menu and now -- and we order the customer something different, they could turn around and sue us and say, Look, even though they told us this is what they wanted, whoever is taking care of them wrote it down, took care of their order, went and got it cooked the way they want it, if they left and came back because we posted something, they could come back and say, Look, you said this is what is in the cheeseburger, even though they wanted something different, they could come back and sue us. There is no -- on one hand saying -- do you understand what I'm trying to explain, or no?
I understand. Because people change the 109 10/9/07 - PUBLIC HEALTH - BILL 070153 way they order sometimes at a restaurant.
Right. People generally do. So let's say you were taking care of my order. I came back and say, Look, I want my cheeseburger cooked this way. You got it down. The chef prepared it the way you want it cooked. You came back later and said, Look, my cheeseburger wasn't the way whatever. For some reason, you can come back and sue us. It's a very fluid and dynamic business. That's the best way I can put it to you, our business. It's like water. You put it here, you never know which way it's going to turn. It's very fluid.
I just want to make a statement that the menu listing may be the issue, but I think nutritional facts should be present on a 110 10/9/07 - PUBLIC HEALTH - BILL 070153 menu. Now you see people have on their menus "fat free" or "low calorie." Something needs to happen. I know people -- I have a friend who is a diabetic. Once she found out she was a diabetic, she stopped going out to eat, because she wanted to make sure that she was eating the right food, and didn't really venture back out to eat in restaurants for more than year once she understood the disease, understood a little bit about the calories, the carbohydrates, the sugar content. So I do think it's important. People come to your restaurant by choice. I would think that by choice restaurants would try to figure out a way to inform and help the public understand what they are purchasing, or else they make the choice not to come, like my friend. That's it. I don't think that's too difficult. You talk about the signs. A 24-ounce steak at Capital Grille. So if 111 10/9/07 - PUBLIC HEALTH - BILL 070153 it's a 24-ounce steak, just put whatever up there, whether it's the calories or whatnot. Let people know you could -- I remember years ago someone said that they went to Burger King for burgers because their burgers were grilled rather than fried like another brand. People need to know that. I know Burger King's commercial does say something like that. But I think the public just needs to be informed so they can make choices. And we don't have to know how many calories are in a mushroom that you got from a farmer, a little small farmer. That's, to me, taking it to the extreme.
Or you can put condiments. You could put the condiments up there and just say these condiments have X, Y or Z. And in some of the books, you see that, in the carbohydrate counters, if you want to get that technical. But are we looking to be 112 10/9/07 - PUBLIC HEALTH - BILL 070153 that technical?
I guess to respond to that, I would say I agree that our guests do probably need the information, especially if they have a disease that they know if they eat the wrong thing may affect them. I think education is a big point of it. I think as an association, definitely myself, we're willing to help in that education in different ways. I think our point being and to make sure I have the legislation correct, you're asking for nutrition information on all items on our menu, and that's where it becomes -- we can't be honest about that number, because that number varies literally from plate to plate. And I guess to piggyback on his information about the lawsuit, this morning when I was drying my daughter's hair, you look at the hair dryer and there's a sign there saying don't use while in the bathtub. People who have 113 10/9/07 - PUBLIC HEALTH - BILL 070153 common sense just realize you probably shouldn't use an electrical item in a hot tub, but apparently someone probably did at some point, sued and won. You know, we have to live, unfortunately, in a realistic world where people like to sue, and we have to look at our business and say we have to protect it. Everything I do, everything I say, I have to watch out how I do it, make sure we're protecting my business, my interest. So for us to turn around and say our porterhouse has X amount of sodium in there, somebody wants to test it, maybe an advocacy group, and say, You know what, I don't believe that's right, they take it to go, test it and it comes back being false, I have a lawsuit on my hands. And that's the selfish way of looking at it, but I think the more important way to look at it, someone who really needs to know the salt content on there, we can give you a ballpark figure. We can tell you probably -- I will tell 114 10/9/07 - PUBLIC HEALTH - BILL 070153 you this: I'm not a dietician, but if I have to worry about salt, probably eating a 24-ounce porterhouse is not the way to go, period. It's a big amount of beef. But there's different ways that we as an organization or restaurants can go into schools, go into clinics and educate. I'd be happy to talk about my menu or I'm sure different restaurants would be happy to talk about their menu. I want more people in my restaurant, so I will talk to anybody about my restaurant. That's something we can do. I just think the menu labeling really won't work on a standard basis.
So to summarize, the sentiment of what I think I've heard, two things resonate: flexibility and, quote, willing to help in different ways. Thank you all for your testimony. 115 10/9/07 - PUBLIC HEALTH - BILL 070153
I'm sorry. Forgive me, please. Please come back. Councilman Ramos. I'm sorry.
I'll be quick. I know for a fact that those of you that are at the witness table are very much concerned about public health. I know that to be a fact. TGIF earlier this year and Wendy's supported my trans fat bill before we even voted on it. So I want to thank you for being so concerned about public health. I know that the sponsor of this bill, my colleague, Blondell Reynolds Brown, has worked very hard in trying to reach agreements with all the parties involved to make this be a bill that will continue to move Philadelphia in its leadership role and involvement in public 116 10/9/07 - PUBLIC HEALTH - BILL 070153 health without intruding into personal lives of people, but nevertheless, that we in government have a very significant role in the public health of our citizenry. Are you definitely against all nutritional disclosures in your businesses? And in respect to the association, are you against all of this? Because we can continue to try to accommodate you, but at the end if you're going to be totally against nutritional disclosure, then we're not going to -- you put us in a tough spot. Are you totally against nutritional disclosure?
As I have mentioned, we ask for flexibility in allowing other means rather than just on a menu or menu board.
Can you 117 10/9/07 - PUBLIC HEALTH - BILL 070153 explain what you mean by "flexibility"?
Like give me an example. What would bring you to say, Since we're concerned about public health and we're not against nutritional disclosure in our food products, what would bring you around to being in agreement with us?
Well, I think speaking right now, I think that asking for flexibility in our restaurants translates into providing nutrition information in other means. Many restaurants throughout the country are providing nutrition information on posters, on brochures, on their websites, in kiosks. There's new technology out there that allows you to put nutrition information on a receipt. Currently, the National Restaurant Association is partnered with an organization called Healthy Dining Finder where we specify four to six menu 118 10/9/07 - PUBLIC HEALTH - BILL 070153 items that fit a healthy criteria, and we work with restaurants and menus to identify those items. So certainly we support restaurants providing nutrition information in ways that work for them and for their customers, and I think more restaurant companies that are going to speak this morning and this afternoon in a few minutes will talk about those ways in which they're providing nutrition information.
Would you be against or for menu boards? And menu boards, what I've picked up in some of your testimony, has been that you see a problem with my wife and I going into a restaurant, you give me the menu and that in that menu you have to disclose -- or this is the way I'm interpreting your response to the bill -- that you have to disclose in that menu that I had just opened up as I sat down a page or two that will tell me how many calories and 119 10/9/07 - PUBLIC HEALTH - BILL 070153 how much fat I have in the 20-ounce steak and so forth. How about if it doesn't necessarily have to be that way? How about if the Mrs. and I walked into TGIF and what I saw was, I got a menu, but you have -- I think you guys call them L&D signs. They're like ticker news signs that you walk in. And I can walk in and while I'm reading to order this 20-ounce steak, I see that it says, I don't know, 100 calories, 200 calories and so much fat, but it goes on to the next one. It's going around and around, but it's not on this menu.
That would be flexible. That would be a flexible alternative. And certainly all of our restaurant concepts are very different, as you've heard this morning, and we are asking -- our opposition here is to a one-size-fits-all approach, and that is where we stand.
Councilman -- I'm sorry. Go ahead. 120 10/9/07 - PUBLIC HEALTH - BILL 070153
Because these signs are referred to as, I was right, L&D signs. And it says here -- it could say, Welcome to Wendy's. We got a special, big double cheeseburger, whatever. But these things will flash on and off that says 200 calories with a hamburger. It doesn't necessarily -- and I'm just trying to find a way to see if we can get some agreement here. I know that if I -- now I see it and I know the hamburger has got 200 calories, probably more, but if I throw cheese on it, I know it's got more. So I don't know. Maybe with the cheese, I understand if I put cheese on it. But the thing is that these type of signs are signs that you don't then have to have that information on a menu, where I'll sit there and say, Well, this has -- but that I walk into your establishment and you might have these signs at your establishment saying at Miranda's, a porterhouse, 20-ouncer, this 121 10/9/07 - PUBLIC HEALTH - BILL 070153 is what's there, and it just goes on to the next one, the next one. Will you be in favor of something like that?
And I'm not speaking on behalf of the sponsor of the bill.
Understood. That's what with the posters we are trying to achieve, because from a practical standpoint, as you say, one of the hallmarks of our made-to-order system is that there's 256 ways to order a single hamburger. And so what we've tried to achieve through the posters is listing out ingredient components so that you could in fact build it your way, and we've got that on the poster and we also have that on our website. And as technology evolves, I don't know where we will end up, but we've tried to stay as 122 10/9/07 - PUBLIC HEALTH - BILL 070153 current as possible to get this information in front of our consumers. We're a little unique in that our menu isn't handed to consumers, it is on the wall. So from a practical standpoint, to list every single combination of things that we sell becomes largely impractical for us.
Even if you use an electronic device such as an L&D or some -- there's probably stuff that's much more advanced than what I have here in front of me. Will you be in favor of that?
You know, I'd have to go back to Wendy's and kind of research the technical aspect of it, but, again, allowing for -- in a given combo, you can choose one of eight drinks or one of four sides to go with your sandwich. You may wait ten minutes for that to come across the ticker to get the information that you need.
So right now 123 10/9/07 - PUBLIC HEALTH - BILL 070153 you're not in favor of any menu boards that have nutritional disclosure? Because this is in fact -- I would consider it a menu board if you did something like this. So you wouldn't be in favor of this either?
On the menu board itself. Our position is that we are pleased to provide all the nutritional information and we think it's most practical to do in another way, and we do that through the posters.
Councilman, may I -- just one comment. Thank you. And your questions are very good ones. I think it's fair to say the industry applauds the intent of the legislation. The concern that I think we have is the standardized approach, the 124 10/9/07 - PUBLIC HEALTH - BILL 070153 government-mandated standardized menu and menu board labeling, which could be very onerous or unpractical or unworkable for lots of segments within the industry. We'd rather see, from a public policy standpoint, governments encouraging and nurturing the restaurant industry to continue what they're doing a pretty good job of today and are continuing to do more of in response to their customer demands, which is provide through the mechanisms that work for their own business as much information as they can. And it's good for restaurants to provide that sort of information to their customers. They want to do that. We just don't want to be diverting resources, from a public policy standpoint, to a standardized menu labeling program when that restaurant could be using resources to provide that information in a more user-friendly manner that suits their own operation, whether it's the website or posters or 125 10/9/07 - PUBLIC HEALTH - BILL 070153 some other way of doing that. So we applaud the intent. I think the concern that we have is really the standardized menu labeling and menu board labeling requirements.
So even hypothetically if we were to say that these electronic signs, these L&D signs, which will be a form of a menu board but it will disclose, again, the calories and the fats on your menu, but up on an electronic board, what I'm saying is, I'm going to go eat at The Palm and I'm going to say, I'm going to splurge tonight, I know. Here it comes up on your electronic display board that this has so much fat, this has that, but it goes on quickly to the next thing, and you're going -- this is just going around for the public to know that these are the nutritional facts of what's on our basic menu at this restaurant.
Again, I think to answer your question, look at what suits 126 10/9/07 - PUBLIC HEALTH - BILL 070153 the restaurant, whether it's The Palm or TGI Friday's. TGI Friday's menu here, for example, states at the bottom "All of our low-fat items have approximately 100 fat and 500 calories." So they're doing things that they're able to do on their menu. It may not be practical for them or for the Capital Grille or even The Palm, for that matter. The caloric content on their three-pound lobster could change dramatically depending on how much butter you use when you're eating it. So at what point is it practical or workable? And that's where we say we'd like to see the public sector working with the industry to work together to encourage and nurture more information and providing it in a way that suits the business and allows them to provide that to their customers in the most easy and workable fashion.
Thank you, Madam Chair. 127 10/9/07 - PUBLIC HEALTH - BILL 070153 Thank you.
Thank you very much. Any other questions or comments? (No response.)
Thank you very much. We appreciate your taking the time to come over and testify. Now we have Teague Higgins and Perry Shah, Richard Wagner, Nick Fodera, Hank Lieberman and Justin Wilson.
For all of those who just testified, please make sure that you have many copies of your testimony so that we have that available to us after the hearing. Thank you.
Good afternoon, and thank you so much for coming. Would you please proceed with your testimony.
Yes. Thank you. Good morning. I guess it's good afternoon. My name is Hank Lieberman. I 128 10/9/07 - PUBLIC HEALTH - BILL 070153 am Vice-President of Development for the Rose Group. We are the exclusive franchisee for Applebee's and for Corner Bakery Cafe in Philadelphia. I'm here this morning to urge you to oppose Bill 7 No. 070153 which requires extensive nutrition labeling for companies with ten or more locations nationally. First -- and I believe this question was raised earlier -- it's important to understand the difference between a large chain of restaurants for whom this bill really is intended and a franchisee. Although Applebee's would qualify as a chain under your definition, the reality is that the Applebee's concept really consists of several smaller restaurant owners and operators who are franchisees. A franchisee owns and operates the restaurant. It invests its own capital to build the restaurant. It hires local employees and managers to run the restaurant and is fully responsible for the profits and losses 129 10/9/07 - PUBLIC HEALTH - BILL 070153 incurred by the restaurant. It pays a royalty to the franchisor for the right to use the name and marketing, but the franchisee owns the business. We are one of those operators. We are a local company with six Applebee's and one Corner Bakery in Philadelphia. We invested well over $15 million to build those six Applebee's, and many are in neighborhoods that needed a nice, clean, affordable restaurant where other so-called national chains wouldn't take the risk. We are the only national casual dining restaurant in Port Richmond, in Fishtown, at 77th and City Line Avenue and Roxborough. We've been in the Northeast for almost years, and 19 last year we invested over three and a 20 half million dollars in the former Bookbinders on 15th Street turning it into what undoubtedly is the nicest Applebee's in the country. Earlier this year we invested a million dollars to double the size of the 130 10/9/07 - PUBLIC HEALTH - BILL 070153 very popular Corner Bakery Cafe at 17th and JFK. Our company believes in Philadelphia. 7 million. These are wages that get taxed by the City of Philadelphia and contribute to the City's revenue base. Yet we are not some giant publicly owned chain with billions of dollars in revenue. Just a small local restaurant operator operating in a tough competitive business. So make no mistake that this proposal will affect small business owners who live and work in this area. Please do not think of us as some far-away impersonal, quote, chain. Also, you need to recognize, as has been mentioned in the past, the variability in our menu. I should say menus, since an Applebee's has seven different menus, which I've passed out to you all this morning: Kids, Catering, Beverage, Wine to Go, Dessert and, of 131 10/9/07 - PUBLIC HEALTH - BILL 070153 course, the basic menu. I thought it would be helpful for all of you to see all the menus to appreciate the enormity of the task that this bill would impose on a small company like ours. Not only do we have all of these menus, but our menus vary and change all the time. It's not a standard pre-portioned approach as this bill 11 implies. We make significant changes to our menu at least five times a year. We also specialize orders to fit our guests' preference. This is really an important point. It is not at all unusual to have someone order steak, hold the mashed potatoes, ask for a side of salad instead, ask for dressing on the side, ask for the steak to be cooked a certain way, substitute a side order of broccoli for fries. Also, no one portion size, as a practical matter, is identical to another. These are human beings in the kitchen. One may spread a little more mayonnaise on a bun than someone else in 132 10/9/07 - PUBLIC HEALTH - BILL 070153 the kitchen.
Should we be penalized and potentially subjected to liability from lawsuits by customers who have gotten or who may have gotten a gram or two more carbs from an overly zealous cook trying to make a meal taste good? We are not selling packaged goods where the calorie, fat, carb and sodium content are easily identifiable. We offer dozens of different alcoholic beverages, where these elements simply are not measurable. And I would point out that this law applies to alcoholic beverages as well. How much sodium is in a glass of cabernet? What about a California cabernet versus a French cabernet? Please don't force us to unreasonably clutter seven different menus with hundreds of different bits of information next to each and every item on the menu. In a restaurant where people are interested in eating quickly, especially at lunch, and in the case of 133 10/9/07 - PUBLIC HEALTH - BILL 070153 Corner Bakery, at breakfast, where everyone wants to get to work on time but still enjoy a good quick breakfast meal, people simply do not want to wait any longer to wade through the sodium and calorie content of their muffins and toast. You will be doing Philadelphians a disservice by creating this totally unworkable and impractical task, and you will be creating a burden on the Philadelphia restaurant community that could have a devastating economic impact on the industry and the entire city. The Rose Group believes in Philadelphia and is very conscious of the interests of Philadelphia consumers. We've demonstrated this time and time again with our development efforts. I'll never forget a day I spent at our Fishtown site when we were building the Applebee's there several years ago. One of the residents of the neighborhood walked up to me that day and said, Sir, I can't thank you enough for building 134 10/9/07 - PUBLIC HEALTH - BILL 070153 something as nice as this in our neighborhood, we've wanted something like this for many, many years, thank you so much for thinking of us. We are a small company. I'm not sure that we would have built that Fishtown restaurant if these onerous, extremely costly requirements were in place. We've recently acquired the rights to build an additional Corner 13 Bakery Cafes in Philadelphia over the 14 next several years. We had hoped that a 15 good number of those restaurants would be 16 in the City of Philadelphia. Please do 17 what you need to do to assure that takes 18 place. Please do what's right. 19 Thank you very much. 20
Thank you 21 very much for your testimony. I got a 22 spot for you in my district. 23
Good afternoon, 24 Council. My name is Teague Higgins. I'm 25 an Operations Manager for Dunkin Brands, 135 10/9/07 - PUBLIC HEALTH - BILL 070153 Incorporated. Dunkin Brands, Incorporated franchises to franchisees in the City 5 of Philadelphia. These 20 small business 6 owners operate a total of 101 locations 7 in the Philadelphia city limits. These 8 franchisees employ an estimated 1,500 9 employees, with a large majority of these 10 employees being residents of the City of 11 Philadelphia. It is estimated that sales 12 and transactions in these 101 stores will 13 exceed 91 million taxable dollars and 29 14 million transactions this year. It is 15 estimated that we serve two to four 16 million Philadelphia residents each year. 17 The Dunkin' Donuts system is 18 totally franchised. We have no 19 company-owned stores. Every Dunkin' 20 Donuts in the country is owned by a small businessman or woman. These folks are not only the life blood of our system, they're the core of this city and this country. This proposal threatens their livelihoods and those of their employees. 136 10/9/07 - PUBLIC HEALTH - BILL 070153 The costs and negative economic impacts of this proposal will be bore by the small business owner, our franchisees. Dunkin Brands is not opposed to disclosing the nutritional content of our products. Dunkin' Donuts has been doing this for many, many years. We have a corporately managed website that has all the information of all our products that are available. For the convenience of our customers, we include this website on all of our cups, bags and all of our packaging. At Dunkin' Donuts we also offer choices for those who are interested in balanced nutrition. Further, we suggest that in a balanced diet of every healthy active person, there is room for that occasional treat. This regulation is aimed at the quick-service restaurant industry whose business model is built on quality, convenience and speed. Our business model is predicated on our speed of service, and our franchisees have a 137 10/9/07 - PUBLIC HEALTH - BILL 070153 limited time to make their money. And we spend tens of millions of dollars to refine our concepts just to trim a few seconds off of our transactions. Crowding the menu board area and the point-of-sale area will create tremendous confusion and delay for our employees and our customers. Dunkin Brands takes issue with the focus on the menu board. This is sacred, limited real estate in our restaurants. Our consumers are repeat consumers, and very few of our products are purchased or consumed by children. Our adult consumers are in our stores again and again and rely on our speed of service to deliver their products and allow them to continue on with their busy day. There are other opportunities and methods to educate our consumers. The menu board is hardly the only opportunity to make this information available and useful. We want people to 138 10/9/07 - PUBLIC HEALTH - BILL 070153 study their choices before it is time to order, not when they are at the counter in front of the cash register. Attached I have here on the table here is a sample disclosure of our website. I have a sample disclosure of our single donut. It provides calorie, sodium, cholesterol, carbohydrates, every single thing you need to know about our glazed donut. Attached in there is also a list of our products offered at Dunkin' Donuts, our donuts, beverages, sandwiches, bagels and bakery. We have 59 varieties of donuts, fancies, Munchkins and sticks. We have 122 varieties or combinations of our coffee, Coolatta, flavored coffee, hot espresso, iced coffee, iced espresso, smoothie, tea and other beverages. We also have 18 varieties and combinations of our sandwiches. We have 11 varieties of bagels with eight varieties of cream cheese. We also have 19 varieties of 139 10/9/07 - PUBLIC HEALTH - BILL 070153 cookies, Danish, muffins and other products.
Try to envision this menu board labeling legislation as it applies to that amount of products. You would virtually have to wallpaper an entire store with this information, which would also create quite a bit of confusion. There is a difference between being a regulator and an enlightened regulator, one that cares about the businesses being regulated and tries to understand and balance their needs. Our industry and our brand is attuned to what customers want. Our customers vote each and every day with their dollars. We recently announced that all of our products in the Dunkin' Donuts chain would be trans fat-free. We didn't need regulation to do this. Consumers told us this. We started working on this solution over three years ago. We are introducing better-for-you products all the time. We are willing to work with the City, but as we venture into 140 10/9/07 - PUBLIC HEALTH - BILL 070153 unchartered waters, we ask that you consider the negative effects on our consumers and our small business owners before implementing this type of legislation. Thank you.
Thank you very much for your testimony. Would you proceed?
Good afternoon, Chairwoman Tasco, Vice-Chair Miller and Committee members of the Public Health and Human Service Committee. Thank you for the opportunity to appear before you today to present testimony. My name is Nick Fodera. I am speaking on behalf of my Auntie Anne's hand-rolled soft pretzel stores located on South Street and at The Gallery in Philadelphia. Auntie Anne's locations provide customers with a variety of soft pretzels, dips and drinks with a commitment to exceeding customers' expectations. I am also speaking on behalf of 141 10/9/07 - PUBLIC HEALTH - BILL 070153 five of my fellow franchisees who also own and operate Auntie Anne's stores at the 30th Street Station, Cheltenham Square, Franklin Mills, The Shoppes at Penn and the Philadelphia International Airport. With me today is Andrew Weikert, who is Director of Government Affairs at my franchisor's corporate office, based in Lancaster, Pennsylvania. From their headquarters in Lancaster, Auntie Anne's, Incorporated provides business support services to franchisees like myself and approximately 300 others who privately own over 925 stores in 45 states and 13 countries. For the support services provided, franchisees like me pay Auntie Anne's, Inc. seven percent of our gross sales and an additional one percent to the Auntie Anne's franchise system's Marketing Fund. I sit before you today respectfully opposing Bill No. 070153, which would require me to provide 142 10/9/07 - PUBLIC HEALTH - BILL 070153 nutrition information on my Auntie Anne's menu boards. Having said that, I want to commend the intent of this legislation. It is the same intent that prompted Auntie Anne's to provide an even more comprehensive range of nutrition information than is required by this bill, years ago. The Auntie Anne's franchise system, my store included, has long provided comprehensive nutritional information to its customers at the point of sale via tear sheets, just like the ones here. They're also included in your packet. By providing such complete nutrition information at the point of sale, my customers, as well as those customers visiting the stores of my fellow franchisees, have been able to make informed nutrition decisions before they purchase food and beverage items at our stores. 143 10/9/07 - PUBLIC HEALTH - BILL 070153 While myself and the wider Auntie Anne's franchise system continues to place high priority on providing comprehensive nutrition information to our customers right at the point of sale, I have to respectfully tell you that from a purely practical standpoint, providing calorie, carbohydrates, saturated fat, trans fat and sodium information on my menu board as this bill requires, while physically possible, would be extremely burdensome and costly, especially as it relates to my ability to reach new customers who have never tried an Auntie Anne's soft pretzel before. If I may elaborate on that point further, other restaurant chains, some of which are represented in this room, are very fortunate to have revenue streams that support multi-million-dollar marketing and advertising budgets that allow for mass TV, radio and print advertisement. Given the relatively small size of Auntie Anne's franchise 144 10/9/07 - PUBLIC HEALTH - BILL 070153 system in comparison to other chains and the limited marketing budget our franchise system is able to support as a result, Auntie Anne's simply cannot afford such advertising luxuries. As a result, we are forced to rely very heavily on our in-store marketing, the centerpiece of which is our menu board. On that point, may I draw your attention to the graphic of the Auntie Anne's standard menu board that I provided with my testimony. As you can see, roughly 65 percent of the Auntie Anne's menu board is dedicated to graphical representation of products designed to reach repeat but, more importantly, first-time customers. If you turn the page, you will see that the volume of nutrition content required by Bill No.
070153 would severely limit my ability to use the menu board as an effective marketing tool. I personally have very serious worries about this, as the success of my 145 10/9/07 - PUBLIC HEALTH - BILL 070153 investments on Philadelphia's South Street and at The Gallery continue to rely heavily on getting new customers and turning them into repeat visitors. , recently found it very difficult to preserve the marketing value of Auntie Anne's menu boards in New York City where an ordinance enacted by the City's Department of Health required the posting of just calorie information on menu boards, not even the five categories of information required by Philadelphia's bill. Although enforcement of the New York City provision has been postponed, Auntie Anne's, Inc. felt that it was in its franchisees' best interest to comply with the regulation's originally effective date July 1, 2007. Although it was successful in doing so, Auntie Anne's marketing department and graphic designers found it very difficult to present calorie information in a format 146 10/9/07 - PUBLIC HEALTH - BILL 070153 that preserved the marketing integrity of the menu board. Considering how difficult it was to fit calorie information on Auntie Anne's menu boards in New York City, from a purely practical standpoint, it is very difficult to imagine how we will be able to squeeze the four additional categories of nutrition information onto my menu boards that Philadelphia's menu labeling bill 12 requires. As an aside to this point, please keep in mind that the quick-service restaurant industry is an extremely diverse one. Auntie Anne's only has mostly standardized products. 18 When you look at the example that I 19 provided with my testimony of what our 20 menu board would likely look like under 21 Philadelphia's bill, it's almost 22 difficult to imagine how my competitors, 23 who would have a multitude of customized 24 products, will be able to comply with 25 this bill. 147 10/9/07 - PUBLIC HEALTH - BILL 070153 In addition, when merchandising products on a menu board, it is critically important to provide information to consumers that is clearly easy to read and understand. Providing nutrition information right on the menu board for five categories of nutrition information will be extremely difficult to do without creating confusion for our customers. Related to that, I am very concerned about being able to serve all our customers standing in line before they become impatient and move on. Speed of service is critically important in my business. For example, my location at The Gallery Mall is right near the SEPTA train station. When people are in a hurry, they want to grab that pretzel and move on and take some home, but if they have to look at that menu board and see all these different items, it's going to hold up the line, and there will be those guests that will not be able to wait 148 10/9/07 - PUBLIC HEALTH - BILL 070153 because they have to catch their train. One person at the front of my customer line trying to decipher fat, calorie and sodium contents for multiple items on the menu board, as well as distinguishing those numbers from price numbers, is bound to become confused and slow my customer line exponentially. Experience provides that customers will leave my store if they are not served in a timely fashion. In closing, let me say that I commend the intent of the legislation. It is the same intent that prompted Auntie Anne's to provide an even more comprehensive range of nutrition information than is required by this bill, years ago. Please understand we are not opposed to providing this information right at the point of sale to our customers. We already do this. This is something we are very happy to continue as we have for years.
However, in order to address 149 10/9/07 - PUBLIC HEALTH - BILL 070153 our very real practical concerns, I am respectfully asking you to oppose this legislation and instead adopt an approach that allows restaurants the flexibility to convey nutrition information to customers in a way that is sensitive to each restaurant concept's unique set of circumstances, such as Auntie Anne's very limited advertising budget, which as a result causes a heavy reliance on our menu board for marketing purposes. Finally, thank you for convening this hearing and allowing me to share my thoughts on this issue. I look forward to working with you on finding a solution that will satisfy the intent of this legislation, as well as the interests of food service chains and the wider public good. Please --
Good morning -- or I guess it's afternoon now. Thank you very much for allowing me to testify today. My name is Justin Wilson. I'm a Senior Research Analyst at the non-profit Center for Consumer Freedom. We're devoted to supporting personal responsibility and consumer choice. In that position I spent the last three years studying the costs, causes, potential solutions to the obesity epidemic. After examining literally thousands of studies and writing two books on the issue, I've become convinced that menu labeling will have little to no 17 impact on obesity. First, I recently finished a report called "Big Bodies - Small Choices" that details more than 16 factors that contribute to obesity. And while eating is certainly one factor, it is only one among many. Rather, recent research suggests that increased rates in obesity are the result of an 151 10/9/07 - PUBLIC HEALTH - BILL 070153 uncomfortable number of daily decisions, ranging from how much sleep we are getting at night, the changing nature of the workforce or increased use of prescription drugs. Second, as it's already been cited today, according to the USDA, restaurant food accounts for just one-third of calories consumed in America. And mandatory menu labeling will only impact nineteen percent of the restaurants. Thus, after accounting for other away-from-home food sources, mandatory menu labeling will likely effect less than five percent of an individual's total calories consumed. And those calories, as my book recently kind of -- it was actually being released today, and I'm sorry I don't have a copy. That's only one small proportion of the total obesity equation. Third, numerous clinical trials and observational studies have come to the same conclusion. Providing nutrition 152 10/9/07 - PUBLIC HEALTH - BILL 070153 information does not influence an individual's caloric intake. To that point, a former Food and Drug Administration Commissioner recently observed that labeling on packaged foods, he said, What we did in making nutrition labeling mandatory did not help obesity. In fact, some people would say it hurt. This is known as what's called the Health Halo. We've had some conversations about Subway, and a study recently that was released that showed that consumers who were eating at Subway have a perception that because they're there and because Subway has pursued a healthier message to their food, they have a tendency to actually consume more calories because they feel less guilt about getting some chips and getting a larger soda, so on and so forth. While some surveys indicate support for menu labeling, a study in the September 2007 edition of the American Journal of Preventative Medicine explains 153 10/9/07 - PUBLIC HEALTH - BILL 070153 that what consumers say in surveys is much different than what they ultimately order. That researcher wrote, Consumers claim they want healthier choices at restaurants, but purchase more indulgent fare when they eat out. In a 2006 study conducted by researchers at Purdue University, they asked respondents what they'd like to see added to restaurant menus, and only eight percent indicated they wanted calorie information. And, finally, a recent study published in the Journal of the American Dietetic Association determined that pilot data suggests that recent legislation advocating for greater labeling of restaurant food may not be particularly effective in combating the obesity epidemic if people are not looking at existing food labels and are not able to use that information for nutrition planning. Finally, researchers from the 154 10/9/07 - PUBLIC HEALTH - BILL 070153 University of Vermont write that despite the growing push for such legislation to be developed and, more importantly, the need for research in the area that has been identified, there has been no 7 research demonstrating the impact that food labeling will have on a consumer's behavior with respect to eating out.
Finally, fourth, mandating nutrition information without offering a fair and realistic safe harbor for recipe variance opens restaurants to illegitimate cash-grab lawsuits. Unlike packaged food companies, and as we've discussed today, restaurants don't rely on assembly lines to prepare their foods, and as this bill's percent swing is 19 unlikely to fairly account for the 20 variance in meal-to-meal preparation. In some cases, it's hard to add more than 20 percent of calories to a plate, but when it comes to saturated fat or sodium, it's one shake or two, one pat or two when it comes to butter. And as I'm sure you're 155 10/9/07 - PUBLIC HEALTH - BILL 070153 aware, there's a cadre of lawyers, including some from the Center for Science in the Public Interest who testified today, have demonstrated their eagerness to sue restaurants for a variety of dubious legal claims, including failure to post the advertised nutritional content and then meet it. Any responsible policy should require a willful negligence standard, as well as offer a fair and realistic safe harbor against litigation for variance in recipes. If the Council is serious about having an impact on obesity rates, politically expedient solutions that perpetuate an antagonistic relationship with food and at the same time ignore the numerous causes of obesity will surely fail. Instead, I believe that Council should adopt more "carrots," like increasing participation in physical education classes, and less sticks. And 156 10/9/07 - PUBLIC HEALTH - BILL 070153 challenging the energy expenditure culture among both youth and adults would be a great place to start. Thank you.
Good afternoon, Madam President and members of the City Council. Thank you for the opportunity for me to come and share my concerns with you about this proposal. My name is Rick Wagner and I have committed the past 37 years to the restaurant industry and our guest experience. I have brought with me two of my general managers to share their concerns about this ordinance. One is Don Carr. He is the General Manger for 15 years in the Roosevelt Boulevard location, and Marshall Lowe, General Manager for Center City, Chestnut Street, Olive Garden. He's been with the company over 15 years also. I have some menus for you. I know it's just a lot of fun looking over 157 10/9/07 - PUBLIC HEALTH - BILL 070153 menus through lunch and listening to testimony about food. Combined, these restaurants employ about 500 employees and serve about 9,000 meals. Our parent company, Darden Restaurant, also owns and operates Red Lobster and Capital Grille restaurants in the City. I am concerned that this proposal will not improve the obesity problem in the City and it will dilute the effectiveness of the information my restaurants already provide voluntarily to our health-conscious guests. Olive Garden has voluntarily provided nutritional information highlighting our most helpful menu since the 1980s. Our Garden Fare menus are available in all of our restaurants and on our website. These items are low in calories and fat and high in fiber content. We also highlight our menu items that are low in carbohydrates. We have even highlighted a no-sugar-added 158 10/9/07 - PUBLIC HEALTH - BILL 070153 dessert. We highlight all of our low-fat items on our menu with an Olive Branch symbol to help our guests who are looking for low-fat options so they can find them easily. We also provide tips to our guests on what side dishes to order for their specific dietary needs. Overall, this proposal unfairly targets multi-unit restaurant companies. Public health proposals should apply to all restaurants equally regardless of whether you have one restaurant or a hundred-unit chain. Currently, even though I passed out just one, we have six different menus in our restaurants that we change approximately every six to eight weeks. My guests often customize their orders by substituting ingredients, side dishes and by ordering wheat pasta instead of our standard pasta. Mandating a single set of nutritional disclosures would not provide the majority of our guests with usable information. We 159 10/9/07 - PUBLIC HEALTH - BILL 070153 choose to highlight our Garden Fare items in part because the dishes were seldom changed by our guests. Instead of mandating nutritional disclosures by chain restaurants, we would ask that the City Council work with the entire restaurant industry and develop a comprehensive approach to combatting obesity. I think this program should include some form of disclosure by restaurants. However, restaurants should be free to have the flexibility to provide information on their most helpful items in a way that caters to their guests. Allowing each restaurant to develop their own disclosure message would allow them to use their knowledge of what the guests want to come up with a more successful program than a bunch of numbers next to a menu listing. Madam President and members of City Council, again, I thank you for the opportunity to speak with you on this 160 10/9/07 - PUBLIC HEALTH - BILL 070153 very important issue.
Thank you so much for your testimony. Councilwoman Brown.
I'm sitting here reflecting. Auntie Anne's, what you've shared with us is exactly what is in use now?
Yes, ma'am. This is the menu board that we use right now. This is the menu board how it would look if the legislation was passed.
Is New York using the "after" menu board in New York? Is that what's being used in New York Auntie Anne's? UNIDENTIFIED SPEAKER: May I?
Sure. UNIDENTIFIED SPEAKER: Our New 161 10/9/07 - PUBLIC HEALTH - BILL 070153 York City menu boards still have the calorie information listed, as had been required by the City's regulation. In New York City we are still using this menu board. Due to the fact that the New York regulation only required calories, our graphic artists and designers were able to make all of that information fit. So, yes, in New York City, we are still -- we are using this menu board as it appears. However, what you see before you now does not have the calories listed, but the New York board would look very similar to this.
How long has the tear sheet been in effect, Auntie Anne's?
We've had tear sheets since probably -- the company is going to be 20 years old in February. So probably 19 years we've had tear sheets or brochures at the front of the counter.
So you achieve the goal of the legislation; you 162 10/9/07 - PUBLIC HEALTH - BILL 070153 just arrive at it in a very different way?
To the gentleman, the Center for Consumer Freedom, describe what you mean when you say, "Any responsible policy should require a willful negligence standard." Tell us what that means.
I think that in addition to a safe harbor, that is more realistic. The percent is what was 14 established by the FDA for packaged 15 goods, and there's still plenty of 16 packaged goods that are still swinging 17 within that 20 percent, but when you got 18 different -- we talked about twice as 19 much mayo. I've worked in a kitchen 20 before and I see how it happens, especially with salt and with fat contents, because those are in small portions already. But a willful negligence standard I think is important from a 163 10/9/07 - PUBLIC HEALTH - BILL 070153 legal perspective. Some of the other legislation that's been proposed has explicitly suggested that the bill can only be enforced by the City and that there's no ability for a private trial lawyer to sue the restaurant. And in addition to that, a willful negligence standard would require proof that the restaurant was knowingly putting lower amounts or higher amounts on its menu rather than just plain negligence, where a cook was being sloppy and was putting an extra dollop of butter in something. And obviously there's certain situations there. If he's being too sloppy, then it should meet that standard, but if it's within the normal operations of the restaurant, I don't think that private trial lawyers should be able to do this. There's a reason why it's supported by trial lawyers across the country and why the folks from the Center for Science in the Public Interest have already filed suits about nutrition content in food. 164 10/9/07 - PUBLIC HEALTH - BILL 070153 So I think if it's going to exist, it should be totally within the domain of the City and there's other --
In the domain of the City to enforce and not privately. I know the Washington, DC bill has an explicit line that suggests that the intent of this bill is not to encourage private lawsuits.
Do you believe that language that addresses this willful negligence standard goes to the issue raised by the National Restaurant Association, the issue of flexibility?
I don't believe so. As we've kind of heard, we've heard from every kind of restaurant -- not 165 10/9/07 - PUBLIC HEALTH - BILL 070153 every kind, because there's many, many more. But flexibility doesn't deal with willful negligence. Willful negligence is merely whether or not there is intent in posting calorie information that was perhaps wrong in comparison to an average sample of the food. I assume that's how it's typically done, is either you use standard nutrition information and can calculate it out, you say, Well, I've got a tablespoon of butter and that's this many calories. And if a restaurant that was willfully posting information that was lower than what they knew was in their food, that would then meet a willful negligence standard. In terms of flexibility, it's a different issue. It's an issue of if you're at Capital Grille where everything is changing and they really don't have the means of doing the necessary testing and so on and so forth and their menu items, frankly, are varying much, much more than, say, a restaurant that has 166 10/9/07 - PUBLIC HEALTH - BILL 070153 multiple thousands of things. I think the one important thing is, there's lots of restaurants that are in the range of and 30 outlets that 6 don't have the capabilities of some of 7 the larger ones. And that would be 8 important. They're the ones -- and, 9 frankly, all of them, though, do need 10 some level of flexibility to allow 11 themselves to give the information and at 12 the same time make it work within their 13 business model. 14
Gentleman 15 from Olive Garden, Rick Wagner, do you 16 have copies of written testimony for us? 17
All right. 20 Well, that concludes my questioning. I want to thank you all for me what was informative but, more importantly, instructive testimony on how we proceed down this road. I thank you all. 167 10/9/07 - PUBLIC HEALTH - BILL 070153
Thank you very much for coming. We appreciate your testimony. Quite informative. Next, Pat English from Smith and Wollensky and Thomas Plantulli, Plantulli Restaurants. Good afternoon.
Good afternoon. I'd like to thank the Council for allowing me a few minutes. I did not bring a prepared statement, but I do have some comments that I'd like to address. First off, my name is Tom Plantulli. I am a franchisee of Burger King. I have two restaurants in the City of Philadelphia. The one being closest to here as at Columbus Boulevard and Tasker. And I'm here just to tell you a little bit about my experience being in the Burger King system for 30-plus years. I have worked for Burger King Corporation for 20 years and then became a franchisee a little over 12 years ago, and I understand the corporate philosophy 168 10/9/07 - PUBLIC HEALTH - BILL 070153 and I now understand what it's like to be a businessperson, at least operating in the City of Philadelphia and understanding my customers. I bring to you my feeling on this is just my own opinion, and my opinion is this: Nutritional information is very important. I commend the Councilwoman with her endeavor on childhood obesity/obesity in our population today in the demographics, and I think that's something that we all should support. However, I do urge that when we look at a bill of this type, we have to look at the consequences that we are going to have if it is placed on the individual businessperson like myself. I have demographics of little kids up to senior citizens that come in my restaurants. Most of the time the children don't eat things that they should eat. I'm sure of that. However, I leave that up to the responsibility of the adult who is purchasing and I leave 169 10/9/07 - PUBLIC HEALTH - BILL 070153 it up to -- when you look at childhood obesity, it really starts at home. And from my own position, I have three children. They're not children, I shouldn't say. I have a 25-year-old, a 21-year-old, which are girls, and then I also have an 18-year-old. And two of my children -- my daughter goes to University of Pennsylvania right now as a junior. My son is at St. Joe's Prep. And my wife and I, specifically my wife more importantly, has done a great job of explaining that not only do you watch what you eat, but you exercise and you do not overload on too much food. And being a Burger King franchisee, as you can see, I am not overweight. I eat the food. However, I watch what I eat and I also try and exercise. And I think part of childhood obesity really starts with the adult who is watching the child at home and making sure that they understand and they educate them. As a businessperson, I don't 170 10/9/07 - PUBLIC HEALTH - BILL 070153 feel that our responsibility should be thrown away. I think our responsibility is there. We have nutritional information packets, of which I've brought some here today. We have -- I think our Chairwoman today mentioned it. We do have displays in our restaurants that advertise our nutritional information as you walk in, similar to Wendy's and similar to a lot of the large chains. However, putting something up on the menu board for every single item, at least in a Burger King restaurant where it's "have it your way," could be just open for game for a lot of consumers that aren't really coming in to eat but they're looking for other things; i.e., maybe it's a lawsuit. And that would be a concern of mine being only a small operator with two restaurants. However, as far as educating our customers and our children, I have to say that is really being a responsible citizen and we should do that. 171 10/9/07 - PUBLIC HEALTH - BILL 070153 That is all my comments that I have. If there's any questions, I'd be willing to address them.
Thank you. Thank you for taking time out to come to testify. We appreciate your comments.
You are right, it does begin at home, and enforcement should be at home, too. Is there anyone else here to testify on this bill? (No response.)
There being no other individuals who want to testify on this bill, we are going to recess this committee until tomorrow at 10:00 a.m., and at that time, we will consider some amendments to the bill. So there will be another hearing on trans fats, but we will take care of the business of this bill at the beginning of that hearing tomorrow at 10:00. 172 10/9/07 - PUBLIC HEALTH - BILL 070153 Thank you very much. This meeting is recessed until Wednesday, October the 10th at 10:00 a.m. (Committee on Public Health and Human Services adjourned at 1:00 p.m.) - - - 173 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on October 9, 2007, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)