July 2021
Natural Products Consulting
By Sydney N. English; Rosie Norwood-Kelly
Advertising is an effective tool to inform consumers of new product launches, educate consumers on product innovations, differentiate competing products, and create excitement or “buzz” around a brand. Therefore, it is no surprise that consumers turn to advertising to understand the attributes, properties, and in the case of food, ingredients of a product and rely on such advertisements in making their purchasing decisions.
Because of the importance of advertising to consumer purchasing decisions, authorities like the Federal Trade Commission (FTC) prohibit advertising practices that are deceptive or can mislead consumers. For the same reason, advertising claims which are more important to consumers are more heavily policed and challenged. “Natural” falls into this very category of claims in today’s climate, where there is a movement towards selfcare and health.
While making truthful “natural” claims can be tricky, marketers should not shy away from making them. This chapter outlines the pitfalls and best practices for making natural claims in advertising to help businesses develop impactful and yet truthful claims to promote their innovative and health-conscious food products and technologies.
A claim is any message conveyed through advertising. An express claim explicitly conveys a specific message (for example, “this product is natural”). An implied claim indirectly conveys or suggests a message. Evaluating the message conveyed through an implied claim considers the net impression of an advertisement including repeating themes and imagery (for example, “made by Mother Nature herself” or images of plants and fruit).
Advertising claims come in many forms. They are made in television commercials; in print advertising including magazines, circulars, and coupons; on the radio; on billboards; and in email blasts. In the digital era, claims are also made through social media, including Instagram, TikTok, Facebook, and YouTube; through influencers; and online banners. Additionally, claims made on packaging are another form of advertising. Regardless of the media used, advertising claims are all subject to the same legal and regulatory provisions. That said, deceptive advertising may impact a business differently depending on the forum.
The more consumers exposed to a deceptive claim, the higher the impact and financial risk to a business. Arguably, every consumer is exposed to/relies on packaging claims at the time of purchase (which, in the case of a class action will mean higher damages/settlement payments). For this reason, claims made on packaging come with higher risk. Moreover, such claims result in higher disruption to a business in that, if challenged, the resolution may require a business to relabel its products.
The FTC prohibits the practice of making deceptive claims in advertising. Any “representation, omission or practice that is likely to mislead the consumer acting reasonably in the circumstances” is considered deceptive.[1] That said, for actionable deception to occur, the claim must be “material” to consumers.[2] The FTC presumes that all express claims are material to purchasing decisions.[3] Implied claims are “material” if they are “important” to consumers and are likely to affect their purchasing decision.[4]
To determine whether a claim is deceptive, a marketer must consider all claims made in the advertising including express and implied claims. All reasonable interpretations of an advertising claim must be true and not misleading. Moreover, the FTC and the National Advertising Division of the BBB National Programs (“NAD”) require that each claim is supported by a reasonable basis before making the claim. This requires advertisers to have substantiation for not only every express claim, but also every reasonable interpretation of a claim through implication. Depending on the type of claim at issue, the requisite substantiation may need to be in the form of competent reliable scientific evidence.
Generally speaking, in evaluating whether a claim is truthful as used in connection with a food product or ingredient, a first step is to consider whether there are any laws or regulations that provide definitions for, or otherwise govern the use of the claim. At a federal level, the claim “natural” does not have a specific definition. That said, marketers may look to the Food and Drug Administration (“FDA”), the U.S. Department of Agriculture, and the NAD for guidance in making these claims.
Since 2016, the FDA has hinted that it may provide a definition or guidance on the use of the term “natural” as it has sought public commentary on the use of this term in the labeling of human food products.[5] However, to date, the FDA has simply provided its “longstanding policy” that the term “natural” is considered to mean that “nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in that food.”[6] Notably, this policy does not address food production methods[7] or food processing or manufacturing methods.[8]
The NAD has gone a step further in determining that any “ingredients which undergo significant chemical alteration should not be called ‘natural.’”[9]
The U.S. Department of Agriculture permits limited use of the term “natural”—applicable only to beef and chicken—when it contains no artificial ingredients or added colors, and if it wasn’t “fundamentally altered” during processing.[10] Any use of the term must be accompanied by a statement (also known as a qualifier, disclaimer, or disclosure) explaining the meaning of “natural,” i.e., “no artificial ingredients” or “minimally processed.”[11]
Left mostly to their own devices, courts and other dispute resolution bodies, such as the NAD, have relied on these policies to create their own definitions and standards for when a food product can be labeled “natural.” For its part, the NAD has advised advertisers that “ingredients which undergo significant chemical alteration should not be called ‘natural’” and to be very specific when using the term “natural” to describe ingredients that may be inconsistent with consumer expectations.[12]
With hopes that the FDA will reach a decision and provide guidance on making “natural” claims soon, some businesses, finding themselves defendants in class action lawsuits involving false advertising and unfair competition claims, have moved to stay their cases under the primary jurisdiction doctrine. In doing so, they argue that it is the role of the FDA to “commence regulatory proceedings to explore whether, and to what extent, it should regulate the term ‘natural’ on food labels.”[13] As a result, defendants argue the court should stay the case pending a decision by the FDA. These motions have been met with varying success.[14]
A broad claim in advertising such as “natural” is ripe for challenge.[15] Generally, an unqualified “natural” claim will convey to consumers that every ingredient in the product comes from a natural source and has not been materially altered after manufacturing and processing. Thus, a consumer may be deceived by advertising a sweet and fruity drink as “all-natural” when the drink actually contains high fructose corn syrup—an artificial sweetener.[16] As a general rule, when there are artificial or synthetic ingredients in a product, an unqualified “natural” claim will be inherently misleading.
While it may be obvious that an unqualified “natural” claimed used for a food product with synthetic ingredients would be misleading, it is not-so obvious that the same applies for a food product without any artificial or synthetic ingredients. How is this possible? The processing of a natural ingredient can in some cases render a “natural” claim deceptive. The NAD has considered this very issue.
In addressing a challenge by The Procter & Gamble Company (“P&G”) against GlaxoSmithKline Consumer Healthcare LLC (“GSK”), the NAD assessed whether GSK could support its claim that Benefiber, a fiber supplement, is “100% Natural.”[17] P&G argued that the sole ingredient of Benefiber, wheat dextrin, was processed in a manner that involved a significant chemical and structural transformation, resulting in a compound that is not found in nature. The NAD determined that the processing of the source ingredient, wheat starch, to yield the wheat dextrin found in Benefiber, represented a “significant alteration” that was inconsistent with what a reasonable consumer would understand a “100% Natural” product to be.[18] Considering that the “100% Natural” claim would likely convey to consumers that the product was entirely natural, the NAD recommended that the advertiser discontinue the claim.
To address this issue, some marketers have moved towards making “naturally derived” claims to promote their products made from natural ingredients that have been modified during manufacturing and processing. As with “natural” claims, there is not a clear definition for what constitutes “naturally derived.” Also as with “natural” claims, an unqualified “naturally derived” claim for a product made with synthetic ingredients will be unsupportable and considered likely to mislead consumers.[19] Thus, claims that a product is “naturally derived” or contains ingredients which are “naturally derived” present their own challenges.
In the food and beverage industry, challenges over “naturally derived” claims have frequently arisen in connection with supplements advertised as being derived from fruits and vegetables,[20] tea leaves,[21] or other natural food sources.[22] While there is no standard as to how much processing is too much processing to render a “naturally derived” claim misleading, substantiation for a “naturally derived” claim requires more than merely identifying the natural starting source for an ingredient.[23] Moreover, given that the processing of natural ingredients modifies them to varying degrees, the best practice is to include a disclaimer with the claim to define what the marketer means by “naturally derived”—that is, quantify how much of the ingredient/product has been modified and/or remains in its natural state. A further discussion on how to qualify claims can be found below.
“Naturally derived” and “natural origin” claims in other industries, including personal care or household products, may also lead purchasing consumers to believe that the product is eco-friendly, health-conscious, or safer than alternatives.[24] Federal courts have noted that a reasonable consumer could interpret claims such as “100% natural,” “all natural,” and “only naturally-derived” as conveying the message that “a product does not contain any non-natural ingredients.”[25] That said, courts have also recognized that qualified claims such as “active ingredients derived from natural sources”—in the absence of any broader claims—would not necessarily lead reasonable consumers to expect the products to be completely free from “unnatural and/or synthetic ingredients.”[26]
To avoid issues arising from overbroad “natural” claims, marketers sometimes qualify “natural” claims by making them ingredient-specific, such as naturally occurring vitamins,[27] natural flavors or sweeteners,[28] or natural oils.[29] Ingredient-specific claims, however, just like any other “natural” claim, require substantiation for every reasonable consumer interpretation before they can be placed on product packaging or in advertisements.
As with all advertising claims, a marketer should ensure that a “natural ingredient” claim is truthful and not misleading. A prominent deceptive message on the front of packaging will not be cured through the use of less prominent qualifiers or ingredients statements found elsewhere on the packaging. Indeed, courts have found it unreasonable to expect consumers “to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box.”[30] Even when ingredient lists have the potential to resolve ambiguity surrounding a natural claim by distinguishing which ingredients are natural from those that are not, some courts have made clear that marketers should not rely solely on the presence of ingredient lists to qualify their otherwise broad natural ingredient claims.[31]
Beyond ingredient lists, “made with” language is another tool marketers use to try to convey to consumers that only select ingredients of a product are natural. This approach, however, is not without risk and has been challenged by consumers. For example, a class action lawsuit was filed alleging that the claim “Made with ALL NATURAL Ingredients” for a bag of Lay’s Kettle Cooked Mesquite BBQ Potato Chips conveyed to reasonable consumers that the chips consisted exclusively of natural ingredients when they in fact did not.[32] Despite the marketer’s assertion that the context of the claim—including the “made with . . .” language and the nutrition box (stating that only the potatoes and natural oils were natural)—was not deceptive, the district court denied the marketer’s motion to dismiss the lawsuit concluding that the class had adequately pleaded that the claim would lead reasonable consumers to believe that the entire product was natural.[33]
Similarly, consumers have brought suits against brands for labeling products as made with “all natural ingredients,” when the leading ingredients were not natural.[34] For example, plaintiffs brought a class action against Gerber Products for its claims made in connection with its “Fruit Juice Snacks.” The class challenged a statement on the side panel of the snack’s packaging describing the product as made “with real fruit juice and other all natural ingredients,” even though the two most prominent ingredients were corn syrup and sugar. While the district court granted Gerber’s motion to dismiss, the Ninth Circuit reversed the decision finding “the statement that Fruit Juice Snacks was made with ‘fruit juice and other all natural ingredients’ could easily be interpreted by consumers as a claim that all the ingredients in the product were natural, which appears to be false.”[35]
Also, marketers should not rely on a truthful natural ingredient claim to qualify a separate overbroad natural claim. The NAD addressed this issue in a proceeding regarding the claims “all natural” and “natural sports drinks.”[36] The marketer argued that its broad natural claims were substantiated by the fact that the sports drinks contained natural flavors and sweeteners and were not artificially colored. However, because the marketer was touting that its product included only natural flavors and vitamins and at the same time referred to its products as a “natural sports drink,” the NAD required evidence demonstrating that all of the ingredients (not just the flavors and vitamins) were naturally derived to support the broader “natural product” claim. Because the marketer was unable to prove that all of its ingredients (including vitamins and citric acid) were natural, the NAD recommended that the unsupported claims be discontinued. That said, the NAD made clear that nothing in its decision prevented marketer from claiming that the drink was “naturally sweetened, naturally flavored, or that it [was] made with natural ingredients.”[37]
Further, a synthetic version of a natural ingredient, if used in a food product, should not be advertised as “natural.” For example, Gerber Products made claims in connection with its baby food products that “We take care to use high-quality, all-natural ingredients and nothing else.”[38] To substantiate this claim, Gerber Products argued the claim was truthful, as it only adds naturally occurring ingredients like Vitamin C which are lost in processing. However, the NAD determined it is literally false to claim that a product containing a synthetic additive contains 100% all-natural ingredients or is “all-natural.”
As a result of these challenges, the NAD has taken the position and advised that “advertisers of ‘natural’ products should be very specific when describing ingredients that may be inconsistent with their consumer’s expectation.”[39]
The best practice is to use a specific “natural” claim that does not require a disclaimer or qualifying language in advertising (i.e., “includes natural oranges”). That said, an acceptable alternative is to use a disclaimer that is “a qualifying statement of equal, if not more prominence than the potentially misleading statement itself [that] immediately follows the claim”[40] (i.e., “made with natural fruit juices”* … *This product is made from natural oranges. Other fruit flavors do not come from natural sources”). The placement and prominence of the qualifying language is crucial.[41] And as the NAD has stated, “a disclaimer on the back or side of the packaging is insufficient to qualify a triggering claim on the front of the product packaging because it is not in sufficiently close proximity to the triggering claim.”[42]
Similarly, the FTC provides that “[w]hen the disclosure of qualifying information is necessary to prevent an ad from being deceptive, the information should be presented clearly and conspicuously so that consumers can actually notice and understand it.”[43] This generally means that disclosures which are not positioned near the claim, appear in fine print, are otherwise buried in unrelated text, and/or only appear briefly on screen (for a television or digital commercial) will be ineffective in mitigating deception deriving from overbroad “natural” claims.[44]
In sum, marketers should take the following steps when making natural food claims:
[1] See https://www.ftc.gov/system/files/documents/public_statements/410531/831014deceptionstmt.pdf (last visited Mar. 30, 2021).
[2] Id.
[3] Id.
[4] Id. (“A ‘material’ misrepresentation or practice is one which is likely to affect a consumer's choice of or conduct regarding a product. In other words, it is information that is important to consumers.”) (citation omitted).
[5] See U.S. Food & Drug Administration, Use of the Term Natural on Food Labeling, https://www.fda.gov/food/food-labeling-nutrition/use-term-natural-food-labeling (last visited Mar. 24, 2021).
[6] Id.
[7] See id. (“such as the use of pesticides”).
[8] See id. (“such as thermal technologies, pasteurization, or irradiation”).
[9] Aspire Beverage Co. v. Stokely-Van Camp, Inc., ASPIRE Sports Drink, Case No. 5861 (July 8, 2015)
[10] U.S. Department of Agriculture – Food Safety and Inspection Service, Meat and Poultry Labeling Terms – Natural, https://www.fsis.usda.gov/food-safety/safe-food-handling-and-preparation/food-safety-basics/meat-and-poultry-labeling-terms (last visited Mar. 24, 2021); see also Leslie Nemo, How the FDA's New Definition for “Natural” Food Could Affect Your Pantry, Bon Appetit, https://www.bonappetit.com/story/natural-food-definition (April 30, 2018).
[11] Id.
[12] Beech-Nut Nutrition Corp. v. Gerber Prods. Co., Baby Food Products, Case No. 4744 (Oct. 24, 2007)
[13] Rosillo v. Annie’s Homegrown, Inc., 2017 U.S. Dist. LEXIS 190130, at *4 (N.D. Cal. Oct. 17, 2017)
[14] Compare id. (agreeing that a stay was appropriate because “the congressional interest reflected in this committee report makes it likely that the FDA will address, in a relatively short amount of time, the use of the term "natural" on food labels.”), with Silva v. Hornell Brewing Co., 2020 U.S. Dist. LEXIS 247538, at *6–7 (E.D.N.Y. Dec. 1, 2020) (denying the motion to stay finding the case involves the “type of legal question” that “is within the conventional experience of the court,” that there is no “danger that the agency may issue guidance that conflicts with the court's ruling,” and that “there is no reason to think the agency is going to be addressing this issue in the near future.”).
[15] See Gabriele v. ConAgra Foods, Inc., No. 5:14-CV-05183, 2015 U.S. Dist. LEXIS 82585 (W.D. Ark. June 25, 2015) (class action brought suit against ConAgra over the labelling of its Hunt tomato products as “natural” when it contained citric acid and calcium chloride on the ground that that the presence of these two ingredients meant that the products contained “artificial and synthetic ingredients which have undergone substantial processing and which include various artificial chemical preservatives and coloring agents.”).
[16] Von Koenig v. Snapple Beverage Corp., 713 F. Supp. 2d 1066 (E.D. Cal. 2010).
[17] See GlaxoSmithKline Consumer Healthcare LLC v. The Procter & Gamble Co., Benefiber Original and Benefiber Healthy Shape, Case No. 6366 (May 14, 2020).
[18] See id. (“Here, the processing of Benefiber – which transforms a digestible, non-fiber ingredient into a non-digestible, 85% fiber ingredient, yielding the very benefits Benefiber touts to consumers – is inconsistent with the reasonable consumer takeaway of a product claiming to be ‘100% Natural.’”).
[19] Zarbee’s, Inc. v. The Procter & Gamble Co., Zarbee’s Naturals Remedies and Supplements, Case No. 6927 (NAD Dec. 28, 2020).
[20] Kochlani v. Bluebonnet, No.: 14:cv-01539-PA-RZ (C.D. Cal. filed April 10, 2014).
[21] Taiyo Int’l, Inc. v. Phyto Tech Corp., 275 F.R.D. 497 (D. Minn. 2011).
[22] Kochlani, No.: 14:cv-01539-PA-RZ (C.D. Cal. filed April 10, 2014).
[23] Taiyo Int’l, Inc. v. Phyto Tech Corp., 275 F.R.D. 497, 501 (D. Minn. 2011) (“[t]he mere knowledge that green tea leaves are a starting material in the L-theanine production process is insufficient to show that the L-theanine is ‘naturally derived from green tea.’”).
[24] See Shank v. Presidio Brands, Inc., No. 17-cv-00232-DMR, 2018 U.S. Dist. LEXIS 10894, at *2 (N.D. Cal. Jan. 23, 2018).
[25] Id. at *27.
[26] Kutza v. Williams-Sonoma, Inc., 2018 U.S. Dist. LEXIS 192456, at *10 (N.D. Cal. November 9, 2018).
[27] See Beech-Nut Nutrition Corp., Case No. 4744.
[28] See Aspire Beverage Co., Case No. 5861.
[29] See Wilson v. Frito-Lay N. Am., Inc., No. 12-cv-1586 SC, 2013 U.S. Dist. LEXIS 47126 (N.D. Cal. Apr. 1, 2013).
[30] Id. at *33-34.
[31] See Terrazzino v. Wal-Mart Stores, Inc., 335 F. Supp. 3d 1074, 1084 (N.D. Ill. 2018) (declining to dismiss plaintiff's complaint simply because an ingredient list was included on the website selling the product); Rojas v. Gen. Mills, Inc., 2014 U.S. Dist. LEXIS 41315, at *22 (N.D. Cal. Mar. 26, 2014); Ackerman v. Coca-Cola Co., No. CV-09-0395 (JG) (RML), 2010 U.S. Dist. LEXIS 73156, at *61 (E.D.N.Y. July 21, 2010) (“The fact that the actual sugar content of vitaminwater was accurately stated in an FDA-mandated label on the product does not eliminate the possibility that reasonable consumers may be misled.”).
[32] See Wilson v. Frito-Lay N. Am., Inc., 2013 U.S. Dist. LEXIS 47126, at *35–36 (N.D. Cal. Apr. 1, 2013).
[33] Id. at *33.
[34] See Williams v. Gerber Prods. Co., 552 F.3d 934 (9th Cir. 2008)
[35] Id. at 939.
[36] Aspire Beverage Co., Case No. 5861
[37] Id.
[38] Beech-Nut Nutrition Corp., Case No. 4744.
[39] Aspire Beverage Company, Case No. 5861.
[40] Arnall Golden Gregory LLP, The NAD takes on “natural” claims, Lexology, Dec. 5, 2012, https://www.lexology.com/library/detail.aspx?g=8848eecf-ae9a-4f7e-b119-1dac49eaa498.
[41] See Campbell Soup Company v. General Mills, Inc., Campbell’s Select Harvest Soups, Case No. 4981 (Mar. 9, 2009).
[42] Id.
[43] https://www.ftc.gov/tips-advice/business-center/guidance/advertising-faqs-guide-small-business (last visited March 30, 2021).
[44] Id.
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