Food Investor Alert: Fat & Calorie Displays At Food Chains (MCD, YUM, BWLD, CAKE, PFCB, RRGB, EAT, BKC, WEN, TXRH, SONC, CPKI)

If you like to invest in food chain restaurants, Thursday was a bad day as a group of bipartisan senators are trying to require chains to list calories on their menus.  This is aimed at the big restaurant chains with 20 locations of the same name rather than mom and pop stores.  If you can believe it, fast food and casual dining restaurant owners McDonald’s Corp. (NYSE: MCD) and Yum! Brands Inc. (NYSE: YUM) already have this available online.  Some of the big chains out there make this available and some do not.

Imagine if (or when) you are forced to see the calorie, salt, and fat counts for many of your favorite foods such as Buffalo Wings at Buffalo Wild Wings Inc. (NASDAQ: BWLD). Or what about some of those oversized plates big enough for two or three meals at The Cheesecake Factory (NASDAQ: CAKE)?  And what if you tally up the full calories and sodium in Chinese food at PF Chang’s China Bistro Inc. (NASDAQ: PFCB)?  Or a Monster Burger at Red Robin Gourmet Burgers Inc. (NASDAQ: RRGB).  Or what about Brinker International Inc. (NYSE: EAT) chains like Chili’s for the Texas Cheese Fries?

We do not mean to pick on any single chain by naming menu items or chains, because this  could affect all big chain owners to the likes of Burger King Holdings Inc. (NYSE: BKC), Wendy’s/Arby’s Group, Inc. (NYSE:WEN), Texas Roadhouse Inc. (NASDAQ: TXRH), Sonic Corp. (NASDAQ: SONC), California Pizza Kitchen Inc., (NASDAQ: CPKI), and many more.  The news of this had a significant negative impact on most of these stocks today when you consider we had an up market.

The restaurants would also be required to immediately furnish upon request additional nutritional data such as total calories, calories from fat, amounts of fat, saturated fat, cholesterol, sodium, total carbohydrates, complex carbohydrates, sugars, dietary fiber and protein.   A trick will be in making sure that the “serving size” matches up with the plate size actually served to you.

The “compromise” is said by the senators to combine key elements of the Menu Education and Labeling (MEAL) Act, sponsored by Senator Tom Harkin (D-IA) and the Labeling Education and Nutrition (LEAN) Act, sponsored by Senators Tom Carper (D-DE) and Lisa Murkowski (R-AK).  The agreement also requires the disclosure of calories per food items on vending machines owned by individuals operating 20 or more vending machines.

Frankly, all of this information should be more available in restaurants if patrons request it.  Many chains disclose this along with food allergen alerts, but the obligation is on the patron.  Putting this directly on a menu or on a menu board may either encourage restaurants to work around the rules or may create other angles.  For restaurants to get around this, they can merely say “per serving” and just say how many servings are there.

Many of the fast food chains already make this data available on their websites and some have these pamphlets available upon request in their stores:

• McDonald’s gives its full nutritional list.
• Yum! Brands for Pizza Hut shows calories and other nutritional data even for pizza.
• P.F. Chang’s shows its nutritional data online for its entire menu.  Hint: not all plates are just one full serving; some orders are four servings or more.
• Red Robin Gourmet Burgers allows you to customize your order to calculate nutritional values.
• Brinker’s chain Chili’s shows its nutritional information as well on its Menu site if you download the PDF.  Hint: The Texas Cheese Fries are 1,920 calories with 3,570 mg of sodium.
• Sonic also lists its nutritional count for its full menu.

Again, our intent here is to just show how some restaurant chains already make this available.  It is out there.  Some restaurants are easy to find the data and others are not.   The long and short of the matter of this is that it could help out some in the war on obesity and other preventative health measures.  Whether it helps out entirely, let’s just say old habits are hard to break.  And if iceberg salad with lemon juice was appealing to the masses, then they wouldn’t need to make pants above a 34-inch waist.

Here was how bad this was on some chain stock tickers: CPKI -6.88%, PFCB -6.3%, EAT -6.1%, BWLD -5.9%, CAKE -4.6%, SONC -4.3%, TXRH -4.2%, RRGB -3.9%, YUM -1.6%, and MCD -1.2%.

Jon C. Ogg