October 29, 2015
The food industry’s leading litigation experts met in Chicago at the end of September for a Food Advertising and Litigation Conference hosted by the Food and Drug Law Institute (FDLI). The panel, which was comprised of some of the industry’s top lawyers and leaders, discussed the litigation trends they see today in food mislabeling.
With increased consumer and media attention on the food industry lately regarding transparency in labeling, it seems that more and more companies are finding themselves on the hot seat. “The politics of food is strong and growing,” explained Beth Johnson, Principal and Founder of Food Directions, LLC, “and transparency is more of an interest.”
As this interest in transparency grows, it has become even more urgent that food companies proceed with a bit of caution when making marketing claims of healthiness, such as “all natural,” citing quantity of ingredients, such as “Rich in Antioxidants,” or providing incomplete competitive claims, such as “X fewer calories” and “X less grams of fat.”
What used to be a simpler process for resolving consumer complaints has become much more complex. Bruce Silverglade, Partner at Olsson Frank Weeda Terman Matz PC, explains that in the past, a company would get a warning letter from the FDA which used to be fairly simple to resolve, but now, as consumers have a much higher level of awareness about food labeling and many more avenues to pursue advocacy and activism, warning letters can now lead to State Attorney Generals taking action or a class action suit. Mr. Silverglade warns, “Food companies must ask themselves, is it worth the risk?”
To better understand how to avoid common labeling issues, let’s first start with what the top trends are for labeling litigation this year. Several of the most discussed mislabeling pitfalls discussed amongst the panelists at the FDLI conference included:
- Natural Claims: Even though it seems that natural claims are being scaled back or removed entirely from many food labels ever since the Naked Juice $9 million settlement in 2013, natural claims are still alive and well in lawsuits today. Kashi, Bear Naked, and Trader Joe’s have all removed natural claims from their packaging after lawsuits, as well. With the natural term becoming passé, there seems to be many synonyms for natural that are gaining in popularity, like “wholesome,” “real,” “whole,” and “nutritious.” Could these be the new ‘natural?’ Will these new natural names be next on the target list for lawsuits?
- Super Foods: Nutritionally dense super foods such as pomegranate, quinoa or kale can sometimes be promoted as the single or main ingredient of a food item. But often times many products don’t contain enough of the super food to qualify as the main ingredient. This potential discrepancy can be easily checked when looking at the ingredient statement. Per FDA regulations, ingredients are listed in descending order of predominance; meaning, the primary main ingredient is listed first followed by the second largest ingredient component and so on. If you see pomegranate or kale as the 6th or 7th ingredient, then chances are there is a small percentage of this food in the recipe. Last year, a class action suit was filed against Chia Crisps for listing chia seeds as the main ingredient, when in fact black beans was the first ingredient listed.
- “Made” Claims: Claims such as “Handmade,” “Craftmade,” “Made from Scratch,” or “Made in the USA,” have come under fire the past few years, especially in the alcohol industry. Maker’s Mark won a lawsuit this year where the plaintiffs stated that they over paid for their bourbon because of the “handmade” claim. Although “Made in USA” has gained in usage, companies need to be aware of implications for the Federal Trade Commission (FTC). The FTC states that all, or virtually all, must be made in the U.S. in order to claim “Made in USA.” Some states, like California, also have laws that state a specific percentage of the materials used must be from the U.S.
The speakers at the FDLI conference also offered a number of useful tips for avoiding these common pitfalls. Some included:
- Improve company-wide communication between key departments. Stephen Baker, Director, FTC Midwest Region, explains that one of the biggest reasons a company falls into trouble is the disconnect between departments, “technical people and marketing people are not on the same page.” Food companies should try to better discuss key marketing initiatives to ensure that what is being said is actually true.
- Be careful about claims on both your food label and your website. With the accessibility of the Internet, food manufacturers have many more eyes on what is listed on their label or claims being marketed. Mr. Silverglade explains that the FDA now uses company websites for reviewing information listed on labels – especially if the website address is listed on the food label’s Information Panel.
- Implement systematic risk assessment. Companies can set up an algorithm to determine risk, and make it a routine part of taking food products to market. Food companies must ask themselves, Is it worth the risk to stretch the truth? Is this a topic that resonates in the mainstream media? What type of product is it? What is the size of the company? Considering questions like these can help determine whether you might be a likely target.
We’ve seen a flurry of significant cases and regulatory actions in food advertising and litigation in recent years, many of which have had far-reaching implications for all food product manufacturers. It’s important to stay on top of what’s happening in federal agencies and the court of public opinion to best position your food business in the market to stay out of the litigation circuit.
Beth Vessels is director of sales and marketing at RL Food Testing Laboratory, and the company’s in-house regulatory expert. She has worked previously for several Fortune 500 companies where she successfully sold and marketed new products and line extensions to major retailers, including Home Depot, Walmart, Lowe’s and Target. Beth lives in Dearborn, MI. email@example.com. @RLFoodTesting.