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Judge: No reasonable consumer would be misled by PepsiCo’s 'all-natural' claims

By Elaine Watson , 01-Jun-2012
Last updated the 01-Jun-2012 at 14:55 GMT

Judge Walker: 'To the extent there is any ambiguity, it is clarified by the detailed information contained in the ingredient list, which explains the exact contents of Lifewater...'
Judge Walker: 'To the extent there is any ambiguity, it is clarified by the detailed information contained in the ingredient list, which explains the exact contents of Lifewater...'

PepsiCo has scored a victory in the ‘all-natural’ civil litigation stakes after persuading a judge in California to dismiss a class action lawsuit alleging it misled consumers of its SoBe beverages.

The lawsuit was filed in February on behalf of plaintiff Charles Hairston by Finkelstein Thompson LLP, the same law firm behind a high-profile class action v. Jamba Juice alleging that steviol glycosides are not natural, owing to the "chemical processing" used to extract them from the stevia leaf.

‘Chemical manufacturing process’

According to Hairston’s amended complaint of April 12, 2012, PepsiCo subsidiary South Beach Beverage Company’s SoBe Lifewater beverages are not ‘all natural’ because they contain “unnaturally processed, synthetic and/or non-natural ingredients”.

Specifically, Hairston objected to the phrase ‘all-natural’ to describe beverages containing vitamin C, B12, B6, B3 and B5, which he says have been produced using a “chemical manufacturing process” even though some of them are chemically identical to their natural-occurring counterparts.

For example, the vitamin B5 used in the beverages is calcium pantothenate, which is “produced synthetically for commercial use from isobutyraldehyde and formaldehyde via 1,1-dimethyl-2-hydroxy-pripionaldehyde and pantolactone”, he said.

Fruit names - but where’s the fruit?

Moreover, by using fruit names (Black Cherry Dragonfruit, Strawberry Kiwi Lemonade) on labels along with the term ‘all-natural’, SoBe “creates a reasonable consumer expectation that the products are manufactured with all natural ingredients”, added Hairston.

It also gave the impression that the products actually contained the above-mentioned fruits, he said.

“Defendants… know that their labeling claims are false, deceptive and likely to mislead reasonable consumers.”

If there is any ambiguity, it’s cleared up by the ingredients list…

However, US district judge John F Walter was not convinced by his argument, and granted South Beach Beverage Co’s motion to dismiss the complaint.

In a ruling dated May 18, Walter said: “No reasonable consumer would read the ‘all natural’ language as modifying the ‘with vitamins’ language and believe that the added vitamins are supposed to be ‘all natural vitamins’.”

Similarly, SoBe’s decision to label ascorbic acid as vitamin C is compliant with federal regulations, which recognize that vitamin C and ascorbic acid are synonyms, he said.

Moreover, to the extent there is any ambiguity, it is clarified by the detailed information contained in the ingredient list, which explains the exact contents of Lifewater.”

As for the fruit names, federal labeling regulations allowed firms “to use the name and images of a fruit on a product’s packaging to describe the characterizing flavor of the product even where the product does not contain any of that fruit, or contains no fruit at all”, noted Walker, citing a recent case involving General Mills' strawberry kiwi yogurts (McKinnis v. General Mills).

When is it OK to use fruit names and pictures?

However, in another recent ruling - which found partly against General Mills (Annie Lam v General Mills) and its Fruit Roll-ups - U.S. District Judge Samuel Conti made it clear that if claims made on the front of pack are misleading, labeling ingredients accurately on the back of the pack did not necessarily mean that firms were off the hook.

He added: "The court cannot conclude that a reasonable consumer should be expected to look beyond 'made with real fruit' in order to discover the truth in the small print [ie. on the ingredients list].”

He also quoted from a recent ninth circuit opinion (Williams v Gerber Products) stating that: “We do not think that the FDA requires an ingredients list so that manufacturers can mislead consumers and then rely on the ingredients list to correct those misinterpretations and provide a shield for liability for the deception.”

He specifically took issue with the phrase ‘made with real fruit’ next to a picture of strawberries on the Strawberry Fruit Rollups packs given that they did not contain strawberries and that their fruit component was primarily pears from concentrate.

“Taken together, these statements might lead a reasonable consumer to believe that the product is made with real strawberries, not pears from concentrate.”

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