Competitive Effects of Front-of-Package Nutrition Labeling Adoption on Nutritional Quality: Evidence from Facts Up Front–Style Labels. (November 2020)

• Record Type: Journal Article
• Authors: Lim, Joon Ho; Rishika, Rishika; Janakiraman, Ramkumar; Kannan, P.K.
• Is Part Of: Journal of marketing. Volume 84:Number 6(2020)
• Page Start: 3
• Page End: 21
• Publication Date: 2020-11
• Subjects: competition -- difference-in-differences -- Facts Up Front -- front-of-package nutrition labeling -- nutritional quality -- public policy and marketing; Marketing -- Periodicals; Marketing -- Management -- Periodicals; 658.8005
• DOI: 10.1177/0022242920942563
• Languages: English
• ISSNs: 0022-2429

Abstract

"Facts Up Front" nutrition labels are a front-of-package (FOP) nutrition labeling system that presents key nutrient information on the front of packaged food and beverage products in an easy-to-read format. The authors conduct a large-scale empirical study to examine the effect of adoption of FOP labeling on products' nutritional quality. The authors assemble a unique data set on packaged food products in the United States across 44 categories over 16 years. By using a difference-in-differences estimator, the authors find that FOP adoption in a product category leads to an improvement in the nutritional quality of other products in that category. This competitive response is stronger for premium brands and brands with narrower product line breadth as well as for categories involving unhealthy products and those that are more competitive in nature. The authors offer evidence regarding the role of nutrition information salience as the underlying mechanism; they also perform supplementary analyses to rule out potential self-selection issues and conduct a battery of robustness checks and falsification tests. The authors discuss the implications of the findings for public policy makers, consumers, manufacturers, and food retailers.