From food to real estate — how ratings impact consumer behavior

Nutri-Scores were first introduced in supermarkets in 2017 and are applied on a voluntary basis. But having been in a handful of French grocery stores over the last week, I can tell you that it is widely used. So much so that I was more surprised when it wasn't there. What might they be trying to hide?

The Nutri-Score is also widely supported by the general public and, according to some surveys, nearly 90% of the French population believe that it should be mandatory on all food packaging.

So how does it work? The system is based on an algorithm that looks out for good stuff like fruits and vegetables, fiber, protein, and healthy oils, while penalizing bad stuff like sugar, saturated fat, and sodium, among other things.

It's an algorithm that is likely to be in constant flux. My understanding is that they have special rules for things like cheese. But regardless, I find that this simple rating system has a significant impact on my buying and eating decisions. Take the above chorizo. It has a score of "E." Do I really want that or should I go for the jambon next door that has a rating of "B?"

This also made me think of France's mandatory Energy Performance Certificate (or Diagnostic de Performance Énergétique). This is a diagnostic that is required of all properties being sold or rented in the country.

It ranks both energy consumption and CO2 emissions from A (most efficient) to G (least efficient). It also provides recommended renovations. And if you lie — and actual performance deviates too far from the stated rating — you could be in trouble.

But just like the Nutri-Score, I am sure that these energy efficiency scores similarly affect buying and renting decisions, especially if there's a capital expenditure recommendation tied to a low score.

This is how commercial real estate is bought and sold. A building condition assessment is done, somebody comes up with a cost for all the work that will need to be done, and then it gets factored into the price: "Yeah, so, I was going to pay you $50 million, but now I have to spend $2 million on CapEx."

But on the residential side, I don't think this is often the case. Not unless someone is measuring performance and telling you what improvements should be made and, in some cases, need to be made for the property to be legally rentable. Out of sight is out of mind.

No businessperson, landlord, or entrepreneur wants to deal with more bureaucracy and red tape. But I'm of the strong opinion that too much of the food we eat is over-processed shit. I also believe in continually striving to be better — especially when it comes to our built environment. And that starts with measurement and benchmarking.

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