The food industry has been upended by the recent COVID-19 pandemic – restaurants and bars are scrambling to adjust to a new way of life after governors across America issued statewide “stay at home” orders in response to the coronavirus pandemic. Restaurants are now only permitted to serve take-out or drive-thru orders, and some restaurants have transformed themselves into neighborhood markets, or bodegas, selling food items not labeled for retail. The Food and Drug Administration (FDA) has recently issued two orders to assist struggling restaurants and bars during this time.
Good News for Restaurants Seeking to Temporarily Transform Into Bodegas
Under normal circumstances, the FDA heavily regulates nutritional label requirements for food products sold at retail. Products sold at wholesale to restaurants, however, do not have the same stringent requirements, as consumers typically never see the items used to create their favorite dishes. As restaurants transformed themselves into bodegas, selling unused ingredients that would typically never hit a retail shelf, a tension between FDA compliance and the restaurants’ survival developed. To ease this tension and assist restaurants during the current pandemic, on March 26, the FDA issued the “Temporary policy regarding nutrition labeling of certain packaged food during the COVID-19 public health emergency.” The March 26 order temporarily suspends labeling requirements for food products sold at retail. Specifically, the FDA stated that it will not object if food items now sold at retail lack a Nutrition Facts label, provided that the food does not have any nutrition claims and contains other required information on the label, including:
- a statement of identity;
- an ingredient statement;
- the name and place of the business of the food manufacturer, packer, or distributor;
- net quantity of contents; and,
- allergen information required by the Food Allergen Labeling and Consumer Protection Act.
The March 26 Order provides opportunities to restaurants, as their cash flows thin and produce and food products spoil in their kitchens. Restaurants can now sell what would have otherwise been ingredients in dishes made at the restaurants, directly to consumers without fear of backlash from the FDA.
FDA Relaxes Requirements for Restaurants Offering Takeout
Regardless of whether a restaurant is offering takeout for the first time in its history or it has been in the delivery service for years, the recent (mandatory) shift in restaurant culture has forced these establishments to redefine their menus, be creative with their options, and, in some cases, explore unchartered territory.
The FDA issued an April 3 Order, “Temporary policy regarding nutrition labeling of standard menu items in chain restaurants and similar retail food establishments during the COVID-19 public health emergency,” to assist. The Order temporarily relaxes menu labeling rules for food establishments that are part of a chain with 20 or more locations. Specifically, the FDA has suspended the requirement to include nutrition information on standard menu items. “Because calorie information is required to be declared for standard menu items when a consumer makes a selection, establishments may have difficulty providing this information during a rapid transition to a takeout business practice,” the FDA said. “Additionally, some of these establishments may be experiencing temporary disruptions in the food supply chain, which may lead to different menus or substitutions that could affect the accuracy of the nutrition information.” Therefore, to provide flexibility to these chains, the FDA will not object if establishments do not meet menu labeling requirements during this public health emergency. Restaurants that would otherwise be limited in their ability to transform themselves now have greater flexibility to weather the COVID-19 storm.
What It Means for Food Businesses
The FDA has relaxed labeling standards during this emergency period, providing restaurants the opportunity to develop new cash flows while also providing the public what it needs – food. The relaxed menu labeling rules allow many foodservice outlets to transition from in-store dining to takeout and retail. Of course, with new ventures, come new risks. And while the FDA has relaxed restrictions, the devil is in the details. We anticipate that the next wave of lawsuits will likely involve claims of false advertising based on restaurants’ product labels (or lack thereof).
Therefore, it is important to consult with an attorney if your business is considering adapting its menus and/or offerings.