Consumer Labeling

In the United States, consumers' food preferences and nutritional needs are diverse, creating a demand for variety in foods. Food suppliers offer numerous choices. This raises a policy question: How can we ensure that consumers have enough information to choose foods that satisfy their idiosyncratic needs, thereby solving the complex coordination problem of matching diverse food demands with food supplies?

The Federal Government provides consumers access to nutrition information and education through initiatives, such as the Dietary Guidelines for Americans and the MyPlate plan. Even so, Americans' diet quality has often been judged as poor. Food manufacturers are adding information about food product attributes to food labels, and the Federal government is regulating some of these labels. Labels can provide valuable information to consumers, increase demand for producers' products, and permit new attributes within products to be marketed. However, labels sometimes mislead consumers, consumers may not fully understand label claims, and instead of improving societal outcomes they may increase inefficiency in the marketplace. In sum, there are remaining questions about what information should be provided and who should provide it (public or private sector) so that information fulfill its role in solving the coordination problem.

Case studies of five food labels for which the Federal Government has played different roles are examined to show the economic effects and tradeoffs in setting product standards, verifying claims, and enforcing truthfulness. See:

Beyond Nutrition and Organic Labels—30 Years of Experience With Intervening in Food Labels

ERS studies whether consumers have enough information to make informed food choices, what the private sector can do to provide informative food labels, what role the public sector can play in providing information, and the costs and benefits of mandatory labeling. ERS research analyses how information can create new markets for food attributes, especially those related for farm production methods. In terms of consumers' food choices, ERS conducts economic analyses of:

  • The effects of nutrition information provision and education programs on food choices and dietary outcomes,
  • Consumers' use of food labels and impacts on food choices and dietary outcomes, and
  • The effects of new label information—impacts on the supply of labeled foods, retail prices, and manufacturing and farm production practices.