With the influence of organic claim lessening and the natural claim highly scrutinized, many food and beverage marketers have started playing the clean label and sustainable card. Such terms as “artisan,” “clean,” “earth friendly,” “local,” “pure” and “simple” are being used on product packages and web sites.
The terms promise to be talking points at the upcoming Institute of Food Technologists Annual Meeting and Food Expo taking place in Chicago July 11-14. Marketers planning to make any of the new-generation label claims should be aware of the legal issues surrounding them. Food Business News spoke with David L. TerMolen, partner and member of the food industry team at the Chicago law firm Freeborn & Peters L.L.P., to gain a better understanding of when such claims are acceptable and when they are cause for concern.
Food Business News: In your opinion, which are the safest of these types of claims to make and which ones are a class-action suit in the making and why?
David TerMolen: The clean label trend has definitely become more popular in the past few years. It is a nice way for food companies to avoid natural claims while conveying a similar message about a product being made with a limited number of recognizable ingredients. The trend is also tied to consumer demand for transparency and simplicity in food production. In this regard, claims emphasizing the lack of synthetic or highly processed components, such as no artificial flavors, no added sugar, no high-fructose corn syrup and no MSG — are the safest because they are definitive statements that lack ambiguity.
Natural claims came under such heavy fire because many food companies gave the term a broad meaning while class-action attorneys and activists had room to argue a much narrower meaning. In other words, problems may arise when broad statements are used in questionable contexts.
Accordingly, food companies must understand their product, its ingredients and its processing so labeling statements narrowly tailor claims to properly reflect the product. For example, calling a juice product “100% pure” or “simply” juice is risky if it has been reconstituted or moderately processed. Likewise, the statement “made with five simple ingredients” should be avoided if one of those ingredients might not be considered simple, such as high-fructose corn syrup. In contrast, labeling a granola with the statement as “simply almonds, whole grain oats, crisped rice and honey” is generally without risk if those are its only ingredients.
“Earth friendly” and “local” are interesting claims that are unlikely to result in class action lawsuits unless they are used in a blatantly misleading manner. But as with all claims, the risks can be significantly reduced by including additional text to explain why certain ingredients are local (e.g., “Sourced from Roger Avery’s Farm in Woodstock, Ill.”) or earth friendly.
The riskiest claims are those that imply a product is healthy or wholesome. Nutella was the target of a class-action lawsuit because the product was touted as being made with wholesome and simple ingredients “like hazelnut, skim milk and a hint of cocoa” and “an example of a tasty yet balanced breakfast.” These statements were found on the product label, television ads and Nutella’s web site. The lawsuit complained this was misleading because they implied that Nutella was healthy and wholesome even though the product Nutella contains 10.9 grams of added sugar and 2 grams of saturated fat per serving. This lawsuit underscores that even if certain statements are literally true, they are not necessarily risk-free if they create an overall impression about a product that is arguably misleading.
Do you think consumers even understand what some of these claims mean?
Mr. TerMolen: I am not a marketing expert and it is always difficult to determine what an average consumer believes as opposed to consumer activists or attorneys. Food companies should strive to use unambiguous claims and statements in connection with their products. When broader statements are used, care should be given to educate consumers about why a product is pure, earth friendly or local. Not only will this reduce risks, but it helps generate goodwill by educating consumers about how the company is working to produce a better product.
How is local playing out in the consumer packaged goods sector?
Mr. TerMolen: It is unusual to see local or locally sourced on a food label. Such terms are more commonly used by restaurants that have fixed locations such that the term becomes meaningful. For products found in grocery stores, it is far more common to see claims that refer to family farms or provide the specific name and location of a sourced ingredient.
There are many facets to sustainable agriculture and food manufacturing. Which ones are safe for marketers to discuss and which ones should they avoid?
Mr. TerMolen: The golden rule for marketers is to understand their product and avoid referring to a product as being the result of sustainable food practices if there are negative facts that could raise doubts about that claim. Consumer activists are quick to use social media to broadcast what they perceive as any hypocrisy or dishonesty by “big food.”
It is safe to discuss positive things that your company is doing with respect to sustainable agriculture and food manufacturing but one should avoid sweeping statements that a company is committed to such practices if it has well-known products or affiliated companies that do not follow those practices.
Dean Foods recently rolled out the DairyPure milk brand designed to ensure consumers that the milk starts pure and stays pure from farm to fridge. Let’s face it, most fluid milk processors follow these same principles and more but they have not taken the time to communicate this to consumers. What do you think of this marketing strategy — The transparency of something that’s always been done and is even done by the competition? If one company communicates its process, for example testing milk for antibiotics, which is actually a legal requirement in this country for all fluid milk, does this hurt other companies who are not communicating this process?
Mr. TerMolen: Large food companies, even those selling basic foods such as milk, are fighting the perception that they are not transparent and that organic or artisan products are healthier, more authentic, or produced more ethically. It is likely that Dean Foods is fighting this perception by communicating important facts about its product that are not generally known by consumers. Other milk producers may look at the Five-Point Purity Promise as being somewhat disingenuous, but I expect others to follow Dean Foods’ lead in working to combat misconceptions that exist about their products.
Since we last spoke about legal trends to consider in 2015 (see related story below), has anything changed much in the way of genetically modified organism labeling in the United States?
Mr. TerMolen: The biggest news is a ruling from the Vermont federal court in the lawsuit filed by the Grocery Manufacturers Association (G.M.A.) to prevent Vermont’s genetically engineered (G.E.) foods labeling law (Act 120) from going into effect on July 1, 2016. The act’s G.E. disclosure requirement provides that packaged, processed food must be labeled with the words: “partially produced with genetic engineering,” “may be produced with genetic engineering” or “produced with genetic engineering.” On April 27, 2015, the court refused to delay implementation of the G.E. disclosure requirements of Act 120. In this regard, the court held that this requirement simply pertains to the disclosure of a “fact” and that deference was owed to the Vermont General Assembly’s finding that G.E. foods “potentially pose risks to health, safety, agriculture and the environment.”
Critical to upholding Act 120’s G.E. disclosure requirement was the court’s rejection of the G.M.A.’s argument that the requirement creates the impression that G.E. foods are unsafe or materially different from non-G.E. foods. In the court’s words, Act 120 “makes no statement regarding food safety, and thus any ‘overall impression’ that G.E. ingredients are ‘unsafe’ owes nothing to the purely factual information provided by it.” In addition, the court noted that food producers may, if they believe the G.E. disclosure requirement creates “a negative connotation regarding the safety of G.E. foods,” disclose additional information to correct “this allegedly erroneous impression.”
For obvious reasons, this ruling has severe implications for all food companies involved with producing food with G.E. ingredients. Although there are weaknesses in the court’s ruling and the G.M.A. has already sought to appeal the ruling, the appeals process will likely last two years. By that time, food companies will already need to comply with the G.E. labeling requirement.
Significantly, the G.M.A. sent a letter to Vermont’s governor dated June 17, 2015, that asserted the cost of compliance for many of the organization’s members would exceed their sales in Vermont. In response, the governor said, “Here’s an idea for the industry: Just label your products. All of them, nationwide.”