November 30, 2016

The language on the label

With a growing local food movement and changes in federal regulations for food production and labeling, processors are having to take a closer look at product labeling, all while creating wording and labeling that will still have meaning to consumers.

Julia Dayton Klein centers her practice for Minneapolis law firm Gray Plant Mooty around business litigation, intellectual property, and regulatory matters, helping businesses of all size resolve legal challenges in the manner that best serves their existing strategic objectives. She counsels clients on a wide range of matters including regulatory compliance, patent infringement, trademarks, advertising, public relations management, product launches, marketing strategies, and mergers and acquisitions. Photo: Gray Plant Mooty

More than half of consumers seek foods with “natural” labeling, according to a survey conducted by Consumer Reports. The public’s perception of what “natural” means, however, varies.

In the survey, consumers were asked what “natural” should mean. For processed foods, 85 percent of those surveyed said the term should mean no chemicals were used; 84 percent said no artificial ingredients and no toxic pesticides; and 82 percent said no GMOs.

In 2014, Consumer Reports petitioned FDA to ban the use of “natural” on food labels or to give it a meaningful definition.

FDA guidance

The use of “natural” on food labeling is largely unregulated, said Julia Dayton Klein of the law firm Gray Plant Mooty.

“We don’t have a lot of tight standards about what that means,” she said.

No formal definition has been established by FDA for the term “natural.” However, it does have a longstanding policy regarding use of the term in food labeling.

“You can use a ‘natural’ label unless there is added color, synthetic substances or added flavor,” Dayton Klein said. “They’ll (FDA) interpret ‘natural’ as meaning nothing artificial or synthetic has been included in or been added to the product that would not normally be expected to be in the food.”

FDA has stated the policy “was not intended to address food production methods, such as the use of pesticides, nor did it explicitly address food processing or manufacturing methods, such as thermal technologies, pasteurizatio, or irradiation.” The agency hasn’t determined whether the term can also describe nutritional or health benefits.

In response to requests from federal courts for administrative determinations and three citizen petitions — one of them being from Consumer Reports — FDA opened a comment period for the use of the term “natural” on food labeling.

The comment period, which opened Nov. 12, 2015, was extended to May 10, 2016. The docket folder, FDA-2014-N-1207, received 7,690 comments. Comments submitted touched on processing methods, including genetically modified organisms and organic production.

Although the term doesn’t have an established definition, consumers still seek products with “natural” on the label — and they’re willing to pay more for them. According to the Consumer Reports research conducted, 62 percent of respondents said they purchase foods with “natural” labeling. Of those shoppers, 87 percent said they would pay more if the label met all of their expectations.

What if a product doesn’t stand up to FDA’s current policy?

“The FDA can issue an action letter against you if you don’t comply with guidance,” Dayton Klein said. “A company could be penalized for not conforming to that guidance, but conforming to the guidance does not insulate a company from other potential liability.”

Cases against food manufacturers concerning mislabeling have centered around terms such as “all-natural,” “100 percent natural” and “organic,” according to information presented at an American Bar Association seminar. Both plaintiffs and defendants have been successful in class actions, and “there is no real trend in terms of whether these cases are more favorable for one side of the bar or the other.”

Alternatives to “natural”

The goal, then, for processors is to minimize any possible risks when it comes to labeling, Dayton Klein said.

“Because there have been so many lawsuits and so much uncertainty, maybe there’s another way to go,” she said. “Maybe there’s another way to tell your story.”

Rather than using the term “natural,” companies can talk about specific, independently verifiable things that are in the product, Dayton Klein said.

“In the remedial measures, that’s kind of where they’re tending to go. Some companies are working really closely with their marketing department. They ask ‘What specific, factual claim can we make that can also be really appealing to consumers?’”

Other buzzwords that have caught consumers’ attention are organic and local. Organic and natural labeling can overlap, but the terms don’t always mean the same thing, Dayton Klein said.

“There’s a lot there as far as organic,” she said about regulations in place for organic labeling. “This is a really great environment for you to be organic. Consumers are willing to pay a premium for that.”

Organic labeling, regulated by the National Organic Program (NOP) and overseen by USDA’s Agricultural Marketing Service, has a set definition. Regulations established by NOP also provide certification that agricultural ingredients have been produced under conditions that meet the definition.

If a processor applies coating to produce or places it through a wash — to extend its shelf life, for example — that product may no longer be considered natural.

“If the coating is derived from something natural, it could be you’re fine keeping it that way,” Dayton Klein said. “If the coating is considered a synthetic substance, then you might want to stay away from a ‘natural’ label.”

The use of genetically modified organisms at any point in production is prohibited in organic products. “Non-GMO” is another buzzword for consumers, and a statement that can be certified, Dayton Klein said.

“Natural has a lot of ambiguity tied to it,” she said. Companies should go with labeling that will allow a processor to “move away from a claim that is vague and into a space that has independently verifiable terms … and can still have power in the marketplace.”

Before choosing a “natural” label, processors must ask: “From seed to fruit to store  — what is that process?”

Specifying where ingredients are sourced from can appeal to customers and can help in sharing the history of that product.

“Just even mentioning what the farm is, gives a story behind that food,” she said. “It connotes to me a familiarity with the food that makes me a little more interested in buying it, than a food that doesn’t have that (information provided).”

Providing this information along with a “natural” label, however, won’t protect a company or processor from a mislabeling lawsuit, Dayton Klein said. Processors must fully understand their supply chain before making a “natural” claim.

Using terms such as “locally sourced” when listing ingredients can come with its own set of restrictions. Some states and localities regulate the circumstances under which food can be called “local.”

For example, the state of Vermont limits the use of “local,” “locally grown” and any substantially similar term to describe food produced within the state or within 30 miles of where it is sold. In Maryland, retailers who claim a product is “local” must disclose from what state it is produced.

“So you know what you can say about your product, go to the processing facility, go to the plant. Have ongoing conversations about how those products are picked, how they’re cleaned,” she said. “The more you know about how your suppliers are operating, the better off you’re going to be.”

Ana Olvera, digital content editor

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