MEMORANDUM. David L. Thomas, Chief Executive Officer, American Dairy Products Institute
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1 KELLER AND HECKMAN LLP Serving Business through Law and Science MEMORANDUM TO: FROM: David L. Thomas, Chief Executive Officer, American Dairy Products Institute Richard F. Mann Evangelia C. Pelonis DATE: RE: Regulation of "Natural" Claims in the U.S. and Factors to Consider for Dairy Ingredients The purpose of this memorandum is to summarize the regulatory status of natural claims in the U.S., as demonstrated through warning letters issued by the U.S. Food and Drug Administration (FDA) and federal court cases brought by consumers regarding such claims. We have also addressed factors that could be considered by dairy ingredient suppliers when determining how to answer questions from their customers as to the natural status of the dairy ingredients. I. Legal/Regulatory Background on Natural Claims for Foods A. FDA s Position on Natural Claims As a preliminary matter, FDA has not established a formal definition for natural claims. 1 Nevertheless, FDA has offered several informal interpretations of natural. Perhaps the clearest expression of FDA s view of the meaning of natural is found in the preamble to the 1993 rule establishing the nutrient content claim regulations, where FDA expressly declined 1 USDA has issued a policy memo on the subject of natural (Policy Memo 055), and discusses natural claims in its Food Standards and Labeling Policy Book (August 2005, pp ), but we will not delve into USDA s position since the Department s labeling jurisdiction is limited to meat, poultry and eggs products. We do note that USDA s guidance permits natural labeling on a case-by-case basis even in cases where a substance has undergone more than minimal processing where it can be demonstrated that the use of such an ingredient would not significantly change the character of the product to the point that it could no longer be considered a natural product.
2 Page 2 to promulgate a regulation defining natural, and, instead, provided informal guidance that interpreted natural to mean 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 the food. (Emphasis added.) 2 FDA has not provided a general definition of artificial or synthetic. With regard to colors, FDA regards any added color in a finished food as artificial, regardless of the derivation of the color. FDA has also posted a Q&A that reiterates their policy on natural claims. What is the meaning of 'natural' on the label of food? From a food science perspective, it is difficult to define a food product that is 'natural' because the food has probably been processed and is no longer the product of the earth. That said, FDA has not developed a definition for use of the term natural or its derivatives. However, the agency has not objected to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances. See (emphasis added). In the absence of a formal definition of natural claims, the overriding legal issue is whether labeling describing a food ingredient as natural is false or misleading within the meaning of Section 403(a) of the Food Drug and Cosmetic Act (FD&C Act), 21 U.S.C. 343(a). If so, the product is misbranded, and its shipment in interstate commerce would be in violation of the FD&C Act. There is some additional guidance as to FDA s position on natural versus artificial in the food additive regulations. FDA s flavor labeling regulation distinguishes between natural flavors and artificial flavors based primarily upon the source of the flavor and to a lesser extent based upon the processing that the flavor undergoes. Specifically, 21 C.F.R (a)(1) ( Foods; labeling of spices, flavorings, colorings and chemical preservatives ) states that an artificial flavor is one not derived from a plant, 3 meat, fish, poultry, eggs, dairy products, or fermentation products thereof. A natural flavor is defined as a flavoring substance derived from one of the above plant, meat, fish, poultry, egg or dairy sources, or fermentation products thereof, via extraction, protein hydrolysis, distillation, roasting, heating or enzymolysis. 4 Since roasting and presumably several other of the above treatments will result in changes in the chemical composition of the original plant or animal material, the flavor regulation clearly contemplates that a flavor can be considered and labeled as natural even though processing that it undergoes results in a different chemical structure than that of the plant 2 58 Fed. Reg. 2302, at 2407 (Jan. 6, 1993). 3 The regulation more specifically describes plant material as a spice, fruit or fruit juice, vegetable or vegetable juice, edible yeast, bark, herb, bud, root, or similar plant material C.F.R (a)(3).
3 Page 3 or animal material from which it is derived, such as fermentation of a plant material followed by enzymolysis. FDA s interpretation of natural focuses primarily on what the food consists of or is derived from, and to a lesser extent, on how it is processed. It is noteworthy that the Agency s interpretation of natural from its 1993 nutrient content claims preamble (cited above) does not exclude any particular processing or purification techniques. Thus, it may reasonably be argued that FDA s position on natural claims does not preclude any processing or purification technique, unless the processing has the effect of incorporating something into the finished food ingredient that is artificial or synthetic or would not normally be expected to be in the food. B. FDA Warning Letters that Address Natural Claims FDA has sent a number of warning letters to companies making natural claims that, at least to some extent, clarify FDA s informal policy. For example, on November 16, 2011, FDA sent Alexia Foods a warning letter regarding its Roasted Red Potatoes & Baby Portabella Mushrooms product. FDA stated that the product may not bear the All Natural claim on the label because the product contains a synthetic chemical preservative, disodium dihydrogen pyrophosphate. 5 In the warning letter, FDA cited to the nutrient content claim preamble from 1993, referenced above. Because the Alexia product contains a synthetic chemical preservative, preventing the product from bearing a natural claim, FDA informed Alexia Foods that the product is misbranded under the Federal Food, Drug, and Cosmetic Act under Section 403(a)(1), which states that a food shall be deemed to be misbranded if its labeling is false or misleading in any particular. Most of FDA s warning letters take issue with the use of natural claims to describe foods that contain preservatives, artificial colors or other artificial or synthetic food ingredients. C. Federal Court Cases that Involve Natural Claims Over the past several years there have been hundreds of consumer class action lawsuits filed against products making natural claims. The complaints often assert that the natural, all natural or 100% natural claims are false or misleading because the food products otherwise contain artificial or synthetic ingredients or are produced from genetically modified crops. Plaintiffs base their theories of relief often times on California s unfair and deceptive trade practices laws, false advertising, fraud, breach of express or implied warranty, and/or unjust enrichment. Many times the plaintiffs will assert that the consumers would not reasonably expect a food product containing synthetically produced ingredients or derived from a genetically modified food source to qualify as natural. Ingredients that have been targeted include synthetic ingredients (e.g., citric acid, inulin) or synthetically derived ingredients (e.g., alkalized cocoa) or ingredients that were sourced from genetically modified plants. 5 See FDA, Warning letter to Alex Dzieduszycki, Alexia Foods (Nov. 16, 2011), available at,
4 Page 4 One reason the litigation continues to mount is likely because the courts have previously rejected defendant s preemption arguments regarding natural claims. 6 The problem has been that, as discussed in greater detail above, FDA has not formally defined the term natural but relies on the informal guidance cited above and the courts are unwilling to rely on this informal guidance to support the preemption argument. II. Natural Claims for Dairy Ingredients We understand that some of your dairy ingredient supplier members are receiving questions from their customers as to whether the ingredients they are supplying are natural. As explained above, the determination as to whether a food is natural is a tricky analysis particularly so because FDA s definition of the term is so vague. Furthermore, the analysis is extremely fact dependant. We recommend that your ingredient supplier members consider the following factors when determining whether natural claims are appropriate to describe their products: Does the ingredient contain any artificial or synthetic substances? If an artificial/synthetic processing aid is used does it come into contact with the ingredient or is it removed whether by washing or other means prior to direct food contact. o Yes: The analysis of artificial/synthetic processing aids used to make natural ingredients is a difficult analysis because arguably if the processing aid is present at insignificant levels and has not technical or functional effect in the ingredient arguably there is a basis to continue to describe the ingredient as natural. Does the ingredient contain any added color, either naturally or synthetically derived. Does the processing of the ingredient result in chemical modification. 6 See Holk v. Snapple Beverage Corp., 575 F.3d 329 (3d Cir. 2009).
5 Page 5 Are any of the ingredients or sub-ingredients or processing aids derived from GM sources. o Yes: natural claim could be supported but would likely be subject to legal challenge under state consumer protection laws. Finally, we note that the finished food manufacturer bears the ultimate responsibility for making truthful and nonmisleading natural claims on products that it sells to its consumers. * * * We trust that this memorandum provides you with an overview of how natural claims are currently regulated and monitored in the U.S. Please let us know if you have any questions or if you would like any additional information , v. 2
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