With No Definition of “Natural”, Food Labels and Promotions

Making Natural Claims Face Increasing Numbers of False and

Deceptive Advertising Lawsuits

Andrew MillerDecember 9, 2016

COMM 428B, Section 1

According to FoodNavigator.com (PULSE Innovation Forum), the organic food market will

increase 14% between 2013 and 2018. As consumer demand for natural foods increase, it is

interesting to note that the FDC does not have a definition of “natural” or its derivatives. The

FDA states that “From a food science perspective, it is difficult to define a food product that is

'natural' because the food has probably been processed and is no longer the product of the earth.”

(U.S. Food & Drug Administration - What is the meaning of 'natural' on the label of food?,

2016).  

The FDA appears to be content with manufacturers’ use of the term if the product doesn’t

contain artificial flavors, added colors or synthetic substances. However the use of this term -

and lack of helpful industry definitions - seems to create subjective expectations from consumers

and industry stakeholders.

Differing expectations have led to consumer and industry confusion, and the lack of

standardization between the FDA the USDA and the FTC – fueled by deceptive advertising by

food marketers (Parasidis, Hooker, & Simons, 2015) – have resulted in lawsuits against

manufacturers and their “natural” products.

Food marketers and manufacturers beware: the lack of definition for the term “natural” in

product labels, promotions and advertising campaigns can confuse industry stakeholders and

consumers, resulting in an increase in lawsuits for false and deceptive advertising.

CONSUMER CONFUSION

With no standard industry definition of the term “natural”, consumer expectations – and

complaints - should be of no surprise to food marketers and manufacturers. According to a law

review in the American Journal of Law & Medicine, “The legal and regulatory framework is

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confusing for lawyers, academics, and courts, and nearly incomprehensible for the

average consumer.” (Parasidis, Hooker, & Simons, 2015).

The review goes on to state the a majority of Americans not only buy foods with “natural”

claims but they also believe that “natural” foods do not contain genetically modified ingredients

or pesticides that are used to grow food products (Parasidis, Hooker, & Simons, 2015).

Without proper industry definitions and regulations, “Natural” and “100% Natural” products

may contain a variety of inconsistent ingredients that seem to not only surprise consumers but

increasingly make them angry enough to pursue litigation. And when that consumer is willing to

pay more for “natural” products and those expectations are not met, litigation aimed at hitting

food manufacturers in their pocketbooks seems like fair play.

According Nielsen’s 2015 Global Health & Wellness Survey, “natural” product sales

rocketed to over $22 billion dollars is annual sales, with 88 percent of over 30,000 surveyed

online consumers [across all demographics] indicating that they are willing to pay more for

healthier foods (Gagliardi, 2015).

“Natural” product consumers are paying more for items they believe to be healthy, and when

they feel they’ve been deceived by false labels and claims, deceptive advertising lawsuits are

their response. Food marketers and manufacturers are feeling the heat for “natural” claims

advertising, and the list keeps growing.

THE ANGER IS IN THE MISSING INGREDIENTS

PepsiCo’s Quaker Oats is one of the most recent cases where angry consumers have fought

back. In May of 2016, consumers from California, Illinois and New York sued the food

manufacturer for false advertising over ingredients in its products (Progressive Media Company,

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2016). Plaintiffs from California and New York are seeking class-action status, refunds and

monetary damages (Ontario Farmer, 2016).

The plaintiffs claim that an undeclared ingredient in the product – glyphosate – is an herbicide

that was declared a carcinogen by the World Health Organization. The claim alleges that the

herbicide is used as a weed-killer and drying agent by oat farmers, and because of this use, the

manufacturer’s product claim of “100 Percent Natural” is misleading (Progressive Media

Company, 2016). Though the lawsuit doesn’t attack the methods used to farm the oats, it asserts

that Quaker Oats products are not “ ‘Natural,’ ‘100% Natural,’ or ‘100% Natural Whole Grain’

as labeled and marketed.” (Kell, 2016).

Lawyers for the New York plaintiffs wrote, “By deceiving consumers about the nature,

quality, and/or ingredients of its Quaker Oats, Quaker is able to sell a greater volume of Quaker

Oats, to charge higher prices for Quaker Oats, and to take away market share from competing

products.” (Ontario Farmer, 2016). The complaint filed in Brooklyn states, “Quaker knows that

consumers seek out and wish to purchase whole, natural foods that do not contain chemicals, and

that consumers will pay more for foods that they believe to be natural." (Progressive Media

Company, 2016).

In reply, PepsiCo stated, "Quaker does not add glyphosate during any part of the milling

process. Glyphosate is commonly used by farmers across the industry who apply it pre-harvest,"

and added that Quaker Oats are cleaned after they’ve been collected from the farms and that any

traces of glyphosate are well under “the maximum permissible limits set by the Environmental

Protection Agency.” (Progressive Media Company, 2016)

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“NATURAL” – SHOULD IT STAY OR SHOULD IT GO – OR SHOULD IT MOVE?

As lawsuits are settled, not only are manufacturers compensating plaintiffs, they’re changing

“natural” claims – and labels - giving a heads up to “natural” marketers that may be next in line

for litigation.

Kashi

It may come as a surprise to many to discover that Kashi – a brand noted for being “All

Natural” – has recently settled a false advertising class action lawsuit. Kashi was in a three-year

litigation battle fighting the class-action lawsuit which stated that Kashi’s claim of”100%

natural”, or “nothing artificial” was false advertising as their products contained genetically

modified organisms (GMOs) (LaFreniere, 2015).

The recent settlement resolved claims that the manufacturer mislabeled their products to

“persuade customers into buying their products.” (LaFreniere, 2015).

Though Kashi maintains that they didn’t do anything wrong and stands by its marketing, they

agreed to a cash settlement and agreed to remove all labels from Kashi products that contained

the GMO as identified by the lawsuit (LaFreniere, 2015).

General Mills

General Mills seems to be learning its “natural” lesson the hard way and appears to have had

its hands caught in the “granola bar” jar.

As recently as 2014, General Mills – the manufacturer of Nature Valley Granola Bars –

settled a class action lawsuit by agreeing to not include “100% natural” on their products if they

contained high-fructose corn syrup or any other highly processed ingredient (Shanker, 2016).

On August 24, 2016, new lawsuits [representing plaintiffs from California, New York,

Minnesota and Washington, D.C. ] against the food manufacturer were filed claiming their

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Nature Valley products – including their The Sweet & Salty Nut granola bar – made with “100%

natural whole grain oats” were deceptive as they were found to contain small amounts of a

popular pesticide, glyphosate (Shanker, 2016).

Similar to the lawsuit against Quaker Oats, the litigation isn’t focused on the use of

glyphosate in the processing of the product. According to lead attorney Kim Richman, “it is

much simpler – that oats can’t be ‘100% natural’ if they’re grown with a synthetic pesticide, and

that calling them as much misleads consumers.” (Shanker, 2016).

Though the General Mills lawsuits seek to have the label removed and reimburse consumers,

Richman states his goal: “I’m not interested in just seeing the word ‘natural’ removed. Ideally

the goal is to clean up the food system.” (Shanker, 2016).

As lawsuits increase with plaintiffs requesting the removal of labels using the word “natural”,

smart food manufacturers could avoid lawsuits by simply removing any product reference to the

term. According to public health attorney Michele Simon, “Every lawyer on the defense side

I’ve been in touch with is clearly advising their clients to avoid using this word.” (Shanker,

2016).

FDA SEEKS PUBLIC INPUT ON THE TERM, “NATURAL”

In 1993, the FDA allowed a comment period to collect responses to better grasp a common

meaning of the word “natural.” Though it commented that the term “natural” "is of

“considerable interest to consumers and industry" and that “the agency continues to believe that

if the term ‘natural’ is adequately defined, the ambiguity surrounding use of this term that results

in misleading claims could be abated," the FDA decided not to act (Parasidis, Hooker, & Simons,

2015). "Because of resource limitations and other agency priorities, [the] FDA is not

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undertaking rulemaking to establish a definition for ‘natural’ at this time." (Parasidis, Hooker, &

Simons, 2015)

Twenty three years later, because of increasing litigation, and “Because of the changing

landscape of food ingredients and production, and in direct response to consumers who have

requested that the FDA explore the use of the term ‘natural,’ the agency asked the public to

provide information and comments on the use of the term in the labeling of human food

products.” (Food & Drug Administration, 2016).

The time frame for public comment ran from November 2015 through May 10, 2016. The

FDA asked for public comment on these three questions:

“Whether it is appropriate to define the term “natural?”

“If so, how the agency should define “natural?” and

“How should the agency determine appropriate use of the term on food labels?”

(The FDA Requests Comments on Use of the Term “Natural” on Food Labeling)

Consumer Comments:

FoodNavigator- USA.com (Watson, 2015) provides a sampling of consumer feedback over

the term “natural” from the over 7,000 comments provided to the FDA during the public

comment period:

“Not sure why this is an issue, ‘natural’ is exactly that. No GMO’s, no radiation, no

chemicals of any kind.” Billie Johnson

“If the human food product comes in a box or packet and any of the ingredients have been

processed, the term ‘natural’ should never be allowed.” Michael Levine

“Food made by God is natural. Food made by a chemical company in the lab is not

natural.” Tracy Molyneaux

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“The term ‘natural’ is meaningless for the purpose of food labeling. It gives the impression

that this food is somehow healthy or good without providing any actual information about the

ingredients or methods of production. It is so open to misinterpretations that it could mean

anything at all. It provides a halo for food produces without providing any actual protections or

valuable information to consumers. To this extent, it is often downright misleading. It should

not be used on any food labels whatsoever.” Angela Bowman

Stakeholder Comments from Industry Associations:

Public comment came not only from concerned consumers but also from national industry

trade associations that have a vested interest in the use of the term “natural”:

“The data demonstrate that many to most consumers incorrectly believe that ‘organic’ and

‘natural’ have similar meaning…

“The most workable approach for the FDA to take is to clarify through guidance its

preference that, except where already provided for in FDA regulations (e.g. natural flavors), the

term ‘natural’ should not be used on food labels. Instead we urge FDA to focus its efforts on

identifying and defining the ‘single attribute’ claims that may be used on food labels (no

artificial colors of flavors). Should FDA define ‘natural’ it should proceed through program

establishment and rulemaking and ensure that processes are set up that include verification and

enforcement mechanisms, including third-party certification…” – The Organic Trade

Association (Ward, 2016)

“To foster transparency and flexibility, a definition of ‘natural’ should include a tiered

systems for labeling different categories of claims in four defined categories: 100% Organic;

Organic; Made With Organic; or identification of organic ingredients in the ingredient list…A

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similar scheme should be established for natural food products.” - The Council for

Responsible Nutrition (MacKay, 2016)

“The definition should be consistent with agency precedent, such as FDA’s definition of

‘natural flavors’. The definition should be clear and objective and readily capable of

verification. FDA should educate consumers about the definition, so that consumers will have a

more uniform and appropriate expectation about products bearing ‘natural’ claims. To help

avoid confusion, FDA should not exclude processing aids not required to be declared in the

ingredient declaration from an evaluation of ‘natural’ status.” - The American Bakers

Association (Sanders, 2016)

LET THE FOOD MARKETER BEWARE: ADVERTISING INDUSTRY CONCERNS

With the increase in lawsuits citing false and deceptive advertising, food marketers and

manufacturers continuing to claim “natural” on their labels and in their promotions, may well be

painting huge targets on their backs. Though the FDA has not announced when it may make a

decision, if at all, regarding a definition of “natural”, food marketers should be concerned that

the FTC may be stepping into this grey area and siding with consumers and industry

stakeholders.

A concerned marketer has no farther to look than at FTC’s three-step approach to analyze

deceptive advertising, where the key lies in whether a reasonable consumer could be misled.

According to Lesson 3 in our course (Allen, 2016), the three steps include:

1. “Is there a representation or an omission that is likely to mislead the consumer?”

2. “Could a reasonable consumer be misled?”

3. “Is the advertisement’s representation or omission material to the consumer’s decision?”

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In simply reviewing the facts of the Quaker Oat’s product and lawsuit, it would be safe to

conclude – regarding the three steps above:

Steps 1 and 2 : The omission that the herbicide was used in the processing of the farmed

oats and can be found [in trace amounts] in the final product could mislead the reasonable

consumer that the “100% Natural” product did not contain anything other than the natural

ingredients.

Step 3 : A reasonable consumer looking to purchase “100% Natural” products for health

and lifestyle purposes may be highly likely not to buy Quaker Oats if they knew that it

contained trace amounts of an herbicide.

In their American Journal of Law & Medicine law review, Parasidis, Hooker and Simons

noted the relationship between the FTC and food marketers making “natural” claims and why

they should be concerned. Interestingly enough, their review pointed out that the FTC was the

first federal agency that tried to define the term “natural” but eventually gave up during the de-

regulation atmosphere during the Reagan administration (Parasidis, Hooker, & Simons, 2015).

Most importantly, they make sure to note that, though the FTC ultimately passed on defining

the term, “a number of provisions of the FTC Act apply to food advertising. For example,

Section 5 prohibits ‘unfair or deceptive acts or practices’, Section 12  prohibits ‘false

advertising,’ and Section 15 prohibits food advertising that is ‘misleading in a material respect.’”

(Parasidis, Hooker, & Simons, 2015).

In “anticipating and addressing First Amendment challenges to regulation of natural claims”,

Parasidis, Hooker and Simons conclude, “When regulations are aimed at addressing misleading

or deceptive commercial speech, the regulations are constitutional if they are ‘reasonably related

to the State's interest in preventing deception of consumers.’ Not only can the government

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restrict misleading or deceptive commercial speech, it can force companies to include on labels

information that is "purely factual and uncontroversial information." (Parasidis, Hooker, &

Simons, 2015).

And it is not just consumers who have something at stake, “Not only does such misbranded

food impact consumers… (it) is problematic…for companies that invest significant resources to

comply with USDA and FDA guidelines regarding Natural claims.” (Parasidis, Hooker, &

Simons, 2015).

Perhaps it is because the FTC was the first federal agency to step into the “natural” definition

conversation coupled with the FDA’s recent announcement that it was seeking public comments

on the same issue that the agency recently made a surprise move that should send a warning to

food marketers: false use of “natural” could have agency-backed consequences.

On April 12, 2016, the FTC announced that four companies agreed to settle agency charges of

false and misleading advertising because they used the claims of “all natural” or “100% natural”

when, in fact, their skin and beauty products contained synthetic ingredients (Vetesi, 2016).

Under the consent orders, “the companies may not make such representation unless they have

evidence to support the claim.  They must have competent and reliable evidence to substantiate

any ingredient-related, environmental, or health claims they make.” (van Laack, 2016).

These recent FTC actions should act as yet another reminder to food marketers and

manufacturers to carefully consider the use of claims for their products that are “natural”, all

natural” or “100% natural.”

CONCLUSION

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With the increased demand for natural products by health-conscious consumers who are

willing to pay more for such products, the stakes are higher than ever for food marketers and

manufacturers who claim their products are “natural”, all natural” or “100% natural.”

Unhelpful and loose definitions of the term “natural” leave the door wide open for litigation

and class-action lawsuits against food manufacturers by confused consumers and industry

stakeholders whose subjective expectations are not met.

As the FTC steps into the “natural” fray and the FDA reviews public comment on the term,

food advertisers should scrutinize their tactics and “natural” claims to avoid costly and lengthy

litigation against false and deceptive advertising. Pressure from the courts and industry

stakeholder may cause the agencies to move swiftly on defining the term “natural.”

Legal experts are providing some insight into what may happen as a result of closer scrutiny

on the “natural” claim.

“While it may cause a hiccup in existing all-natural label lawsuits, it’s unlikely to stem the

tide of new suits altogether,” says Attorney Kristen Polovy (Polovoy, Food Navigator-USA,

2016), “However, since FDA action…is likely years away, it’s unlikely that plaintiffs’ lawyers

will see this FDA comment period as an all-out stop-sign. If anything, defendants’ self-initiated

removal of ‘natural’ from labels in recent months is likely to have more of an effect on the

volume of new cases than the FDA comment process itself.”

Char Pagar, marketing and advertising attorney with the VLP Law Group, suggests that as

industry stakeholders await a response from the FDA, food product companies would be wise to

avoid using the term “natural” and all similar claims (Ciccatelli, 2016).

Harking back to 1993 when the FDA failed to make any decision on the definition of

“natural”, Attorney Ivan Wasserman, a partner at Manatt, Phelps & Phillips, warns that the

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recent request and probe by the FDA by no means indicates that there will be a new definition of

“natural” and “that the whole ‘what is natural’ question could ultimately end up in the ‘too

difficult’ box (Watson, What is natural? Over to you, FDA..., 2016).

In the meantime, it will be interesting to see how many more lawsuits are initiated against

those who make “natural” claims in their product labels and advertising. No doubt, consumers,

industry stakeholders and the advertising industry will be watching and waiting – and thinking

twice before using “natural” in their labels and advertising claims.

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Watson, E. (2015, December 1). What is natural? First wave of comments are in (and hint at the challenge facing the FDA). Retrieved December 2, 2016, from FoodNavigator - Breaking News on Food & Beverage Development North America: http://www.foodnavigator-usa.com/Regulation/What-is-natural-First-wave-of-comments-to-FDA-are-in?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright

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