Soda Showdown: Restaurants Battle Bloomberg

Restaurants Battle Bloomberg over SodaWatch out America. As you watch Spiderman fight the evil Lizard on screen, another villain is lurking in the depths of the dark theatre. Unlike any other, America’s newest villain is bubbly, cold, and sweet. Soda has become the nation’s latest enemy, and if New York City Mayor Michael Bloomberg has his way, the sugary stuff could soon be history, at least in his city. Bloomberg has launched a war against soda, proposing a ban on large sugary soft drinks. The ban would outlaw sodas in excess of 16 ounces at restaurants and events in New York City. Foodservice professionals across the nation are outraged at the ban, targeted at one of the restaurant industry’s highest margin items.

Bloomberg’s proposal comes in response to America’s ever-growing obesity epidemic. The Centers for Disease Control and Prevention reports that obesity rates have increased steadily in the U.S. throughout the past few decades, rising to 35.7% of adults and 17% of children between the ages of 2 and 17.  In New York City alone, obesity leads to 5,800 deaths per year, costing taxpayers $4 billion. But is soda to blame? Possibly. A 2006 study published in the American Journal of Public Heath uncovered a significant correlation between sugar consumption and weight gain. Each 20 ounce bottle of soda contains 65 grams of sugar, the equivalent of 22 packets of the sweetener. The average American consumes 140 extra calories each day from sugar sweetened beverages. Not surprisingly, the statistic is even higher among teenagers, who drink an average of 327 calories worth of sugary drinks every day.

The proposed ban would prevent restaurants and event facilities from serving beverages that are “sweetened with sugar or another caloric sweetener that contain more than 25 calories per 8 fluid ounces and contain less than 51 percent milk or milk substitute by volume as an ingredient” in containers larger than 16 ounces. Other leaders across the country have announced similar initiatives, including the mayor of Cambridge, MA, who proposed limiting the size of sugar sweetened beverages sold at restaurants, and a council member in Richmond, CA, who suggested charging a license fee for business selling sugary drinks.

With food costs on the rise, many restaurants count on income from higher margin items like sodas to help sustain their businesses. Several restaurant chains have launched soft drink campaigns to speak out against the soda ban, promoting the sugary drinks as a morning menu item. Steak ‘n Shake is currently running a Facebook soda promotion, offering fans a coupon for a free breakfast taco when they purchase a 28 ounce Coca-Cola from 6 a.m. until 11 a.m. through July 11.  Sonic is testing a Morning Drink Stop promotion, offering 99 cent fountain drinks during the a.m. hours in some markets. In a much bolder move, Taco Bell locations in Southern California and Fresno have added MTN Dew A.M. to their menus. The beverage, a mix of sugary orange juice and Mountain Dew, is served through 11 a.m. each day.

Will the ban pass and how much of an impact will it have on the foodservice industry? It’s hard to say. New Yorkers will have a chance to attend a public hearing on July 24 before the final vote on September 13. If the ban passes, restaurants would have to comply with its restrictions in March 2013.