As 2016 came to a close, food, nutritional supplement, and cosmetic companies that sell “natural” products remained targets of and vulnerable to regulatory enforcement actions and consumer class actions.  While 2016 saw some regulatory activity surrounding the terms “natural,” “all natural,” and “100% natural,” the year ended without the issuance of regulations or guidance on how these terms should be defined.  As a new administration assumes office, bringing with it an uncertain regulatory environment, it remains to be seen what action, if any, the Food and Drug Administration (“FDA”) will take in this area, among others.[1]  This uncertainty demands that companies be ever more vigilant in monitoring, not only regulatory activity, but the scores of pending lawsuits and judicial decisions they will spawn, which, in the absence of regulatory action, will inform the debate over the “reasonable consumer’s” expectations when purchasing a “natural” or “all natural” product.  To assist in understanding the regulatory landscape, this post recaps the actions taken in 2016 by the FDA and Federal Trade Commission (“FTC”) in this “natural” area.

FDA – To Define or Not Define?

To date, the FDA has only considered use of the term “natural” in the food context.  Although the Agency has yet to define the term, it has adopted the following longstanding policy concerning use of the term in human food labeling:  “natural” means that “nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in that food.”  As the number of “natural” food offerings has grown, and in direct response to requests from consumers and courts, in 2016, the FDA asked for information and public comment on the following questions:

  • Whether it is appropriate to define the term ‘natural’;
  • If so, how the Agency should define ‘natural’; and
  • How should the Agency determine appropriate uses of the term on food labels?

At the close of the public comment period, the FDA had received a total of 7,690 responses.  There is no indication how long it will take the Agency to consider these comments or when we can expect the Agency to announce whether it has decided to define the term “natural” and, if so, how.  Even if a definition is forthcoming, it will likely be limited to the labeling of food, thereby leaving nutritional supplement and cosmetic companies to extrapolate how the definition might apply to their products.

FTC:  “All Natural” means no synthetic ingredients – but “Natural” is not the same as “All Natural”

While the FDA has taken baby steps to address the debate over “natural,” the FTC has taken more significant strides by pursuing actions against companies that market “all natural” and “100% natural” products.

Last summer, the FTC announced it had approved settlements with four companies that market products as “all natural” or “100% natural” when they contain artificial ingredients.  Upon announcing the settlements, the FTC Bureau of Consumer Protection Director, Jessica Rich, stated that “’[a]ll natural’ or ‘100 percent natural’ means just that—no artificial ingredients or chemical.”  Subsequently, in response to a public comment, the FTC rejected the notion that the term “natural” means the same thing as “all natural,” stating it did not have evidence that consumers necessarily interpret “natural” to mean “all natural” or having no synthetic ingredients.

As 2016 came to an end, the FTC issued an order against California Naturel, Inc., finding the company’s marketing of its Sunscreen SPF 30 product as “all natural” was false and misleading since it contained Dimethicone, a synthetic ingredient.  In reaching its findings, the FTC relied on claims made by on the company’s website, including that the sunscreen is a “soft, luxurious and non-oily all natural sunscreen” which “uses only the purest, most luxurious and effective ingredients found in nature.”  According to the FTC, these claims, together with the product packaging, plainly conveyed to reasonable consumers that every ingredient in the product is natural.  The FTC rejected the claim that its decision to add a disclaimer to the bottom of its webpage, which was not visible without scrolling down, could act to change the net impression conveyed to consumers.

The settlements and the Commission’s order in California Naturel prohibits the companies from misrepresenting: the ingredients or composition of their products; stating a product is “all natural” or “100% natural” when it contains any natural or synthetic ingredient or component; or the environmental or health benefits of a product.  The companies must also have competent and reliable evidence to support any of the claims they make about their products.  Companies marketing products as “all natural” or “100% natural” are well advised to review their product claims and make sure product dossiers contain similar evidence to substantiate their claims.

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As we welcome 2017, the prospects of a regulatory resolution to the “natural” problem seems distant.  The time may have come for us to work together and with third-parties to try and stymie the onslaught of legal action that our “natural” industries face.  Here’s to a “naturally” prosperous and safe 2017.

[1]  On December 14. 2016, the House Freedom Caucus issued a Special Report entitled “First 100 Days:  Rules, Regulations, and Executive Orders to Examine, Revoke, and Issue,” recommending that the Trump Administration issue an “Agency-wide blanket freeze on all pending administrative rules and regulations until approved by Trump-appointed agency or department heads.”  In addition to recommending that Agency department heads not send proposed regulations to the Federal Register without approval by a Trump-appointed Agency head, the recommendation is to withdraw any regulations already submitted to the Federal Register, but not yet published, until approved by a Trump appointee, and that for final rules already published, but not yet taken effect, postpone the effective date for 60 days.  The proposal allows for exceptions for emergency or urgent situations relating to “critical health and safety functions,” and excludes regulations promulgated pursuant to statutory or judicial deadlines.

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