"Cereal Crimes" or Naturally Delicious?

Last Friday, General Mills Inc. joined the growing list of companies facing consumer class actions over “All-Natural” claims on food products.  The complaint alleges that General Mills’ Original Kix Crispy Corn Puffs and Honey Kix Crispy Corn Puffs are advertised as containing “all natural corn” or “all natural corn & honey” but actually contain corn “derived from unnatural genetically modified plants.”

In fact, this is not the first time General Mills has faced this type of claim.  It won dismissal of a suit not too long ago that attacked its use of the word “natural” to describe the fiber in its “Fiber One” bars.

Litigation concerning claims that a product is “all natural” has been kicking around in federal courts for a number of years.  Snapple and Arizona Beverages have faced consumer class actions alleging that “all natural’ claims are false and misleading when used on products that contain high fructose corn syrup.  And, in the past six months, similar suits have been filed against food giants like Kellogg Co., PepsiCo Inc., ConAgra, Kashi Company and Bear Naked, Inc.  

Litigation on this subject is proliferating for a variety of reasons.  Consumers are concerned now more than ever with healthy eating options, and perhaps as a result, plaintiffs’ attorneys appear to be focusing more and more on food-related marketing claims.  

There is also a certain level of ambiguity as to what “all natural” or “100% natural” actually means.  The Federal Trade Commission declined to define the term “natural” in its proposed Green Guide issued last year, and the Food and Drug Administration has declined to wade into the “all natural” waters at least twice – first,  during a 1993 rulemaking and more recently after the Arizona Tea court referred the issue of whether high fructose corn syrup qualifies as a “natural” food ingredient to FDA.   The FDA’s website explains that “the agency has not objected to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances,” and it is clearly not a priority to provide any additional clarification anytime soon.

Regardless, plaintiffs in these cases face a number of hurdles, including difficulty in establishing reliance, questions regarding whether the claims are obvious exaggerations or “puffery” and general issues related to how consumers perceive “all natural” claims in light of ingredient statements and common sense.  Certification was also denied in the Snapple case in the Southern District of New York on the grounds that the plaintiff did not demonstrate by reliable evidence that consumers paid a “price premium” for Snapple beverages as a result of the allegedly misleading “all natural” claim.   

In the Kix suit, the plaintiffs appear to be trying to address the reliance and damages questions head on.  The complaint cites a recently released 2011 Cornucopia Institute “Cereal Crimes” report that concludes that Kix cereal is 36% more expensive per ounce than Nature’s Path unsweetened organic corn puffs.  The complaint also cites a study conducted by the Rudd Center for Food Policy and Obesity at Yale University that found that nutrition-related health claims on cereal boxes result in parents believing that those products are healthier than other children’s cereals, leading to greater willingness of parents to buy those cereals for their children.   

In our experience, consumers buy food products for a number of reasons, and we expect General Mills will submit evidence that tends to diminish the impact of this particular advertising claim.  We also wonder whether a product such as Nature’s Path is really an apples-to-apples comparison.  Do many consumers really choose between Kix and an organic product?

Regardless, it will be interesting to watch as this and the related cases unfold.