Duke - The Fuqua School of Business

News Release

News Tip: To Reduce Obesity, Fast-Food Companies Should Offer Smaller Sizes Of Soft Drinks, Duke Professors Say

December 07, 2005

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DURHAM, N.C. –- This week’s Institute of Medicine recommendation that companies advertise only healthy food choices to children takes a heavy-handed approach to stemming the nation’s obesity crisis, said Richard Staelin, a professor in Duke University’s Fuqua School of Business. 

Recent research by Staelin, Duke marketing professor Joel Huber and Ph.D. student Kathryn Sharpe has demonstrated that fast-food companies could reduce their consumers’ caloric intake while maintaining profits by simply increasing the assortment of soft drink sizes they sell. 

Instead of legislating advertising of food to children, Staelin recommends that Congress institute a set of guidelines for the fast-food industry similar to the corporate average fuel economy (CAFE) standards established for the automobile industry. 

“If Congress gave fast-food companies the directive to reduce their customers’ overall caloric intake by 10 percent, our research indicates companies could do that without decreasing profits, simply by offering smaller sizes of soft drinks,” said Staelin, Edward and Rose Donnell Professor of Business Administration at Fuqua.  “Over time, this would amount to a significant calorie savings and would be a solid step in combating our obesity crisis.”

Staelin and his colleagues varied the sizes of drinks they offered to participants in an experiment and found they tended to order drinks based not on volume but on where each size fell within the range of offerings.

Participants in the experiment tended to avoid the smallest and largest sizes and instead selected the middle sizes. When 12-ounce soft drinks were available, many people ordered 16-ounce drinks; when 12-ounce drinks were removed from the menu and 16-ounce drinks were the smallest available, many participants who had previously ordered 16-ounce drinks increased to 21-ounce drinks. Likewise, those who initially bought the 21-ounce drink moved up to a 32-ounce drink when it was the middle choice (a 42-ounce drink was the largest option).

“Both of these behaviors are examples of what is called extremeness aversion,” Staelin said. “People don’t want to order either the smallest or the largest sizes offered, no matter what those sizes are. Fast-food restaurants could significantly reduce their customers’ calorie consumption by simply modifying the assortment of soft drink sizes they offer.”