Manufacturers walk tightrope between demand for natural products and greenwashing allegations

“We are seeing a state of confusion” with regards to what types of claims manufacturers are allowed to make and how consumers are interpreting those claims, according to Angela Diesch, a partner with Gilbert, Kelly, Crowley & Jennett’s Sacramento, Calif., office who represents industry. “Manufacturers have certain messages they want to convey … in terms of natural. They want to convey that their product is maybe natural to a certain extent. [But] how do you convey that without being misleading?” she asked at Natural Products Expo West in California earlier this month. Answering her own question, Diesch said many companies want to do the right thing and try to be truthful in their claims and product representations, but “the problem is, even honesty can be misleading and right now, I think, that is what we are seeing a lot of.” For example, she said most firms now understand that claiming packaged products are 100% natural is like painting a bullseye on their back for litigation. But what many don’t understand is that simply claiming a product is “natural” but dropping the qualifier still leaves them vulnerable, as do visual elements of marketing that suggest natural, even if it isn’t expressly claimed. “A number of companies have pulled back from the 100% natural [claim, but] they are still using the word natural and they are using advertising and marketing that really has that green feel. They have got pictures of trees and meadows and apples and berries. So the overall impression is still, ‘Well, it must be 100% natural.’ And so that, right now, is what we are seeing” in terms of shifting litigation, Diesch said. She also warned that she is seeing challenges in the cosmetic’s industry based on the use of natural as an adverb, such as saying something is “naturally effective.” And while she hasn’t seen this in the food space yet, “I wouldn’t be surprised if we eventually saw that in food as well,” she said. FTC and FDA take action On the regulatory front, Diesch said FTC continues to enforce its Green Guides , which most recently were updated in 2012 to help companies understand how to safely use product certifications and seals of approval, claims about materials and energy source claims. More broadly the guides outline the general principles that apply to all environmental marketing claims, how consumers understand these claims and how marketers can qualify their claims safely to avoid deception. “There is a continuation of enforcement actions by the FTC on greenwashing, but in those actions, at least in terms of the word ‘natural,’ they are really challenging that ‘all natural’ and ‘100% natural.’ They haven’t particularly gone after companies for … that feel of greenness,” yet, she said. “Now on FDA, on the other hand … FDA put out a public information request regarding the term natural and whether it should be regulated, first of all, and if it should be regulated, how should it be regulated,” Diesch said, adding that what the agency determines will influence how it enforces marketing. However, answers to these questions will not likely come any time soon, Diesch noted. “Last time I looked, [FDA received] 7,690 comments. Can you imagine being the staffer at FDA that is having to read every single one of those comments?” she asked, noting that FDA needs to organize and respond to those comments before it can create any regulation. The new administration also could delay a final decision by the agency, Diesch said, explaining that it is highly unlikely that a new regulation will be published in the next year. Back to basics In the absence of a clear definition of natural to help marketers craft claims, Diesch recommends manufacturers protect themselves by following the basic guidelines for advertising and ensuring they have reasonable basis for their claims. “Take off the rose colored goggles, and look at it clearly. Step back, show it to someone … outside and a legal person take a look at it. Have a regulatory consultant take a look at it,” she said. “You need some kind of auditing system in place. I always encourage companies to get legal involved pretty early on because the attorneys are really able to look at it and say, ‘Okay, it is not just what the FDA is saying and the FTC saying. It is what is the litigation environment and what am I seeing down the road.” She also recommends that marketers qualify their claims as much as possible. “Qualifying your claims will help prevent confusion and that helps prevent deception. That way, if you are using natural claims, don’t just use it willy-nilly. Use it and be specific about what you are saying is natural. Is it the flavors that are natural? But then is something synthetic? Be specific. You don’t want just that natural word to be hanging over there as if it encompasses everything,” she said. The future is nigh With that in mind, Diesch doesn’t see litigation around natural claims dying down any time soon. “In three to five years, I think we are going to see increased litigation, even more so. The word natural is still being used by manufacturers,” she said. She also suggested that this litigation increasingly will go after smaller players and new industry entrants. “Small companies need to realize, it is not just the big players that have been in business for years and years and have million, billion dollar industries. It is the smaller guys,” too, and they will suffer disproportionately from any costs incurred, she said. Ultimately, she said, the best defense against this type of litigation is transparency and education – both for marketers and consumers. “If people do that they will be in pretty good shape,” she said.

Manufacturers walk tightrope between demand for natural products and greenwashing allegations

Today’s consumers want products that are natural, sustainable and environmentally friendly, but manufacturers hoping to appeal to these values face significant threats from lawsuits alleging greenwashing and evolving regulations and enforcement efforts by FDA and FTC.

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