Good Companies Must Make Nutritious Products—Right?

Knowing a company's charitable initiatives can obscure important nutritional information.

Dave Thompson/Reuters

When the call of a Snickers bar in the late afternoon is undeniable, I'm betting that the nutritional label on the wrapper is thrown into the trash without a careful read. That's not a cognitive bias, but rather just willful ignorance in the pursuit of delicious chocolate. Similarly, though caloric information is required on menus in New York, the effectiveness of such measures on curbing unhealthy food choices remains unclear. Experts still debate whether informing the public with numbers and facts will help them eat better.

A new study looks at how people's favorable perceptions of companies could lead them to eat less-than-nutritious foods. To start, it turns out that consumers are not so good at processing nutrition information.

John Peloza, an associate marketing professor at University of Kentucky, authored the study with Christine Ye and William Montford. "First, one study from 2006 shows that people struggle with the data presented in numerical form as a daily percent of some vitamin or mineral, for example. So on the one hand, it’s a simple math issue," explains Peloza in an email. "On the other hand there are significant biases that can influence consumers. A famous study from 2007 showed that when people see a 'low fat' label they also infer that it is low calorie."

The researchers did four experiments to look at how a firm's corporate social responsibility (CSR) activities such as donating to charity and being a good employer—which are not actually related to the nutrition of a food product—influences the way consumers perceive and consume these products. It seems pretty intuitive from the consumer side of things: A company that does good deeds must have the consumer's health in mind too.

But this inference is exactly where the trouble lies. "We argue that the inference happens because people see the company as being a “steward” of stakeholders. So, for example, when a company donates to charity or otherwise takes part in community support programs, they show that they care. Consumers then take that halo with them when assessing products marketed by the company," said Peloza.

Not only did good CSR translate to the perception of a healthier product, they found that the "health halo" of good CSR information leads to an underestimation of calorie content. In one study, the researchers told one group of M.B.A. students that a company making cheese crackers had won awards for their CSR activities, and a control group was told nothing of this company's CSR activities. Both groups were provided with the nutritional information of the crackers. The group in the good CSR condition actually ate more crackers.

Is this just the food industry's version of greenwashing—leanwashing, perhaps?

"It’s tough to say if it’s greenwashing or not," says Peloza. "I don’t know if these companies make the association between their charity and perceived healthfulness of products... Essentially any company that has some kind of charity and community engagement or other form of social responsibility (which is virtually every food marketer) could potentially create this kind of halo." Furthermore, if consumers aren't aware of a company's CSR initiatives, this misperception due to the health halo wouldn't happen.

Luckily, even with these halos all around clouding our judgement, it seems that people might only be self-reporting that they support socially beneficial products. Often times, they don't act on those preferences.