Why ‘Healthy’, ‘Natural’ Labels May Hurt Your Food Company’s Bottom Line

As consumer desire for clean, healthy, and natural foods continues to grow, food companies are increasingly interested in including these types of claims on product labels. The theory is that the more “natural” or “healthy” a food product appears, the more likely consumers are to purchase it. The use of any word or term on a food product label, however, could create significant regulatory or class action risk for food companies.

For this reason, food companies should carefully consider any marketing term that is included on a product label or in product advertising. Although FDA has direct regulatory authority over food labels per se, the agency has interpreted this authority to include food advertising (i.e., ancillary statements made in flyers, in commercial advertisements, or on the internet). In turn, the Federal Trade Commission (FTC) also has direct regulatory authority over food advertising claims and can take its own regulatory enforcement actions against food companies that make claims found to be deceptive or misleading. FTC will find an advertisement deceptive and unlawful if it contains a material representation or omission of fact that is likely to mislead consumers acting reasonably under the circumstances.

The risks associated with using such claims can be significant. This is especially true when both regulators and class action lawyers are constantly scanning store shelves for products using these terms. In this article, we will look closely at the definitions of both “healthy” and “natural” and provide an update on the overall regulatory enforcement approach being adopted, as well as some recent examples of class action lawsuits.

“Healthy” Labels

When using the term “healthy” on a product label or in advertising, food companies should conduct a careful review of FDA’s definition and previous treatment of the term to avoid regulatory action and potential lawsuits. FDA has previously taken formal regulatory action, including issuing formal (and public) warning letters, for the improper use of the term “healthy” on product labels and in advertising. Even without regulatory action, companies may face lawsuits when “healthy” is improperly used on foods, potentially leading to huge defense expenses and possibly a costly settlement.

As defined by FDA, the term “healthy” requires that the food meet certain nutritional requirements; however, after issuing a Warning Letter to KIND for the use of “healthy” on products that the agency argued did not meet these requirements, and later reversing its decision, FDA has started to refine its policy and approach to enforcing the labeling requirements.

Generally, all agree that a product using the term “healthy” must be low fat, low in saturated fat, and low cholesterol. Additionally, for certain product categories, the product must also be a good source of one or more vitamins or minerals. Additional requirements can be found in the regulations. All companies should thus carefully review the requirements of 21 C.F.R. 101.65(d)(2) before making a “healthy” claim on a product.

In addition to the requirements provided in 21 C.F.R. 101.65(d)(2), FDA has issued guidance stating that products that are not low in total fat but have a fat profile of predominately mono- and polyunsaturated fats or are a good source of potassium or vitamin D can use the term “healthy” in labeling and advertising. Although guidance documents are not law, FDA has stated that the agency will use enforcement discretion to avoid taking regulatory action against products labeled “healthy” in accordance with the September 2016 guidance document. The agency also indicated that updates to the Dietary Guidelines supported the additional products that can be labeled “healthy,” and that the latest nutrition science would be considered when finalizing an updated definition for the term.

FDA published an update on its research activities on March 28, 2022, indicating that the agency is continuing to review the definition of “healthy” and is currently investigating the use of an approved icon for “healthy” products. The agency has determined that a standardized symbol for “healthy” foods may help improve dietary patterns within the U.S., and the agency is currently conducting research to develop the image and standards for a voluntary “healthy” icon.

With that said, the use of the term could still be dangerous if all regulatory requirements are strictly followed. Notably, many recent class actions litigating foods claiming to be healthy focus on products with high levels of added sugars and include products that only make an implied claim of healthfulness. In a case litigated in 2020, a consumer sued Welch’s for making claims such as “helps support a healthy heart” on various 100% juice products. In Hanson v. Welch Foods Inc., 470 F. Supp. 3d 1066 (N.D. Cal. 2020), the consumer sought to represent a California-wide class, alleging that the products actually increased the risk of heart disease due to their high sugar content. Welch’s ultimately settled with the consumer, on behalf of a class of consumers, for both monetary relief totaling $1,500,000 and an agreement to remove all claims that suggest the product is healthy.

Similarly, Clif Bar was recently sued for making various claims that suggested certain products were healthy. Among the claims made were “nourishing kids in motion” and “nutritious on-the-go snacks for our kids.” These claims, according to the plaintiff in Milan v. Clif Bar & Co., 489 F. Supp. 3d 1004 (N.D. Cal. 2020), were misleading because of the high levels of added sugar in the Clif Bar products. The consumer sought to represent all New York and California consumers who purchased the various products, and these classes were approved by the court. The case has not yet been litigated nor have the parties settled.

What is clear from the litigation, however, is that these types of claims and lawsuits can be extremely expensive. The costs of attorneys can easily exceed hundreds of thousands, if not millions, of dollars, and the settlements can be equally costly.

“Natural” Labels

Unfortunately, FDA has not yet defined the term “natural.” Although the agency previously requested comments in 2016 from the public on the meaning of the term “natural,” it has not yet issued guidance or a final rule implementing a regulatory definition. FDA has, however, stated that the agency considers “natural” to mean that nothing artificial or synthetic, including all color additives, has been added to the food unless the additive is normally expected to be in that food. USDA similarly has not issued a regulatory definition but has stated that the agency considers “natural” meat and poultry products to be those products that contain no artificial ingredients or color and that are only minimally processed.

Until FDA finalizes a definition of “natural,” companies should use the term “natural” with caution and only when the product contains no artificial or synthetic ingredients. Additionally, products being marketed as “natural” should be minimally processed, meaning that any processing the food undergoes does not fundamentally change the product.

In light of this confusion, over the past several years many lawsuits have sought to challenge “natural” claims, targeting everything from yogurt made with milk from cows fed genetically modified feed to granola bars that had trace amounts of herbicides. Other products routinely targeted included those using the term “natural,” notwithstanding the presence of various ingredients such as citric acid, xanthan gum, and soy lecithin.

More recent class actions continue to focus on the presence of additives or residues that consumers may perceive to be unnatural. McCormick & Co. recently settled a class action lawsuit for use of the claim “all natural” on various seasonings that contained corn starch, white corn flour, and citric acid. The plaintiff alleged that these ingredients were “highly processed, synthetic, and/or genetically modified,” and were, therefore, not natural. In Holve v. McCormick & Co., 334 F. Supp. 3d 535 (W.D.N.Y. 2018), the consumer sought to represent a national class of affected consumers, and the agreement settled the claims on behalf of a national class. The settlement totaled $3,000,000 in monetary penalties and included an agreement by McCormick to modify the labeling of various products.

Similarly, Tropicana continues to litigate a class action lawsuit, Willard v. Tropicana Mfg. Co., No. 20-cv-01501 (N.D. Ill. Dec. 30, 2021), in which the consumers claim that the presence of DL-malic acid in juices labeled as “100% natural” causes the claim to be deceptive and misleading. The plaintiffs, who have targeted numerous Tropicana products in the action, seek to represent a national class of consumers.

With these risks in mind, be sure to scrutinize your labels, claims, and ingredients to avoid becoming a target. Also, remember that, regardless of what FDA’s guidance provides, both of these terms (“natural” and “healthy”) have evolving meaning to consumers. So, even if the terms are being used appropriately in the technical sense, class action lawyers could still attempt to argue that, based upon current consumer perceptions or understanding, consumers are being misled.

What is clear is that a regulator or plaintiff lawyer may begin to salivate when they see these terms. Review your labels now to make sure that they are salivating over the quality of your product, and not the quantity in your pocketbook.

Stevens is a food industry attorney and founder of Food Industry Counsel, LLC and a member of the Food Quality & Safety Editorial Advisory Panel. Reach him at [email protected]. Presnell is the newest member of Food Industry Counsel and has worked in the food industry for nearly a decade. Reach her at [email protected].

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