Lenny & Larry’s agrees to pay $5m to settle lawsuit over protein claims, but stands by its labeling
According to a proposed settlement, which has yet to be signed off by the court, Lenny & Larry’s has agreed to pay $1.85m in cash (to cover the plaintiff's attorneys' fees, an award to the named plaintiffs, admin costs, and up to $350k to pay valid claims made by class members), plus $3.15m in free products, to a maximum of $5m, to settle a lawsuit* alleging its Complete Cookie did not provide the advertised amount of protein.
According to the plaintiffs, Lenny & Larry’s “grossly inflated” the protein content of its Complete Cookies, which were advertised as containing 16g protein, but in fact contained just 4-9g protein - a claim Lenny & Larry's denies. The case is one of a flurry of recent protein-related lawsuits, with Mars Wrigley Confectionery US recently being accused** of misrepresenting the quantity, quality, and nature of the protein in Snickers Protein Bars.
Why couldn’t this case be resolved more rapidly?
On the face of it, the case might look like something that could have been rapidly resolved without protracted litigation, acknowledged CEO Apu Mody in a call with FoodNavigator-USA.
Asked why the brand was not able to quickly refute the allegations by explaining what proteins it used and how it measured them, he said: “I can see how from the outside it might seem that way [ie. clear cut], but the fact is, that it all costs you money and time, and we can’t have this keep going through the court system for the next five years.
“We accurately state the ingredients and the nutrition facts; we test and comply with all the accepted FDA protocols. We stand by the protein claims we make on pack, and have not admitted any wrongdoing as part of this settlement. We use the same testing labs that most of the food industry uses to verify all of the claims on our Nutrition Facts panels.”
But he added: “There’s a greater burden frankly on the defendants than there is on the plaintiffs, and the incentive for them to carry on is quite large, and the cost for them to do that is not as apparent as it is for us. Unfortunately we’ve got a legal system that likely needs some real change and reform.”
'I don’t think we were uniquely targeted'
Given that hundreds of companies add protein to their foods and beverages and calculate protein quantity and quality without attracting the scrutiny of the plaintiff’s bar, why was Lenny & Larry’s singled out?
Said Mody: “The volume of these class action lawsuits has just continued to increase and I don’t think we were uniquely targeted. Some of these plaintiff’s attorneys send out letters and notices to lots of companies and they often settle out of court before a case is even filed.”
‘Over the last couple of years, we’ve had a very high double digit CAGR’
Legal frustrations notwithstanding, the Lenny & Larry’s brand – which effectively created the protein cookie category in the 1990s - continues to go from strength to strength, said Mody, a former president of Mars Food North America, who became CEO at Lenny & Larry’s in October 2017.
He added: “We’re probably one of the fastest growing brands in the nutrition bar area, and we continue to innovate. Over the last couple of years we’ve had a very high double digit CAGR and we’re nationally distributed now. We have roughly 60% ACV in grocery, we’re in most of the mass retailers now, and we have strong distribution in the convenience channel and the health and fitness channel.
“Our latest product – bite size complete crunchy cookies – has had an incredible reception from retailers and takes us into two parts of the store. So oftentimes retailers will put us next to nutrition bars and also the cookie section.”
The brand, which currently uses wheat gluten, pea protein and rice protein in its cookies, is also exploring new sources of plant-based protein, he said. "We need something scalable, but for some of our newer products we definitely see some promise and some applications with new proteins."
New products in the pipeline
The brand – which is currently in cookies, muffins and brownies – could definitely extend to other parts of the store, he added, signaling that new products would be launched in the next six months featuring high fiber and high protein.
“We had a unique and disruptive idea [with the cookies]. Consumers love the fact that they can eat a product they are extremely familiar with and frankly tastes like a cookie, not a protein bar… The core tenet of the brand was always baked nutrition made fun, easy, and healthy, and providing functionality with real food, so we could go into lots of parts of the store.”
He added: “Most of use aren’t eating food for function, we’re eating it for taste.”
*Lori Cowen, et al. v. Lenny & Larry’s, Inc., Case No. 1:17-cv-01530, filed in February 2017 in the Northern District of Illinois, Eastern Division.
**Alejandro et al v. Mars Wrigley Confectionery US LLC, Case No. 2018CH04439, Illinois Circuit Courts – Cook County)
