What a Food Label Should Look Like

These are the most amazing food labels:

Shown by my arrows for those of us that are minimally multi-lingual, the three labels warn us about saturated fat, calories, and sugar.

Chile’s Labels

In 2012, Chile decided it was time to place big black signs on the front of its food packages. As the world’s largest consumer of sugary drinks (at 188 calories a day), Chile was concerned with obesity. They hoped that better food labels would diminish people’s “lost health years.” Through octagonal black signs that said “alto en” (high in), they grabbed consumers’ attention. More precisely, if, per 100 grams, the product had more than 275 calories, 400 milligrams of sodium, 10 grams of sugar, or 4 grams of saturated fats, then it got the danger sign.

This box displays a double danger:

It worked.

A 2024 WSJ article tells us that calories consumed of food in labeled packages plunged by 24% while sugar and sodium consumption also dipped. And then, creating a “win/win,” the food companies reduced sugar and sodium content.

U.S. Food Labels

Meanwhile, do look at the message we get from the front of a cereal box in the U.S.:

As a result, eight years ago, the US FDA mandated “improved” food labels. With due dates based on the manufacturer’s size, all had to be using them by 2021. Below, you can see the difference between the original labels and the new ones:

Displaying some reality recognition, the labels revised serving sizes. For ice cream, the calorie count assumed we would scoop 2/3 of a cup rather than 1/2:

UK Labels

Introduced during 2014, traffic light labels became an option in the UK. As we might expect, red says stop, yellow, caution, and green, go:

Our Bottom Line: Externalities

Considering food labels, we should default to the ripple of incentives they create. As economists, they take us to externalities. Defined as the impact of a policy or contract or decision on an uninvolved third party, an externality takes us far from the original event. With food labels, we move from the grocery store to a household. On the demand side, we have the consumer and with supply, the response of the producer. The beginning and end though is the country. We start with its regulations and end with healthcare expenses.

My sources and more: The confusion over food labels, first took me to the U.S. and then Chile, here and here and finally to the UK.