Nutella: Part of a Tasty Balanced Breakfast, Just Like Chocolate Syrup

In 2009, my wife and I were introduced to Nutella.  It was a wonderful, delicious time.  

That time ended when my wife glanced at the nutritional information on the back of the label.  She promptly declared that we needed to tone down our consumption.  My wife has a trained eye towards these sorts of labels.  I do not.  That is why I found this chart, provided by plaintiffs in a recent lawsuit brought against Ferrero, the maker of Nutella, to be an eye-opener:

Now, I’m not vouching for these numbers, but, according to the chart (which Ferrero did not contest), a similar amount of hot fudge has fewer calories, less fat and less sugar than Nutella.  A candy bar is depicted as comparable to Nutella as well.  No wonder children are smiling so much on the Nutella website. 

In February 2011, two lawsuits were filed, In re Nutella Marketing and Sales Practices Litigation, No. 11-1086(FLW)(DEA) (D.N.J.), and In re Ferrero Litigation, No. 3:11-CV-00205-H-CAB (S.D. Cal.), alleging Ferrero’s labeling, website and television advertisements violated the states’ various unfair competition and false advertising laws.  A few examples of specific advertising that the plaintiffs claimed was misleading included:

1. A statement on the back of the label stating:  “An example of a tasty yet balanced breakfast: a glass of skim milk, orange juice and Nutella on whole wheat bread”;
2. A Nutella webpage stating:  “Nutella spread on whole wheat bread, or any multigrain product, with orange juice or skim milk is a good combination for a balanced breakfast that the entire family will enjoy;”
3. A television commercial where an actress states:  “And Nutella is made with simple, quality ingredients, like hazelnuts, skim milk, and a hint of cocoa.”

In moving to dismiss the complaints, Ferrero did not contest plaintiffs’ basic nutritional arguments.  Ferrero even pointed out in its motion to dismiss that it emphasizes that Nutella should be eaten in “moderation.”  Ferrero also argued, among other things, that (1) nothing in the labeling or advertising specifically stated that Nutella itself constituted or was a key element of a healthy breakfast; (2) the FDA-compliant labeling on the package clearly indicated the amount of fat and sugar in Nutella, and this information was literally right next to some of the claims in question; (3) given the nutritional information provided, no reasonable consumer exercising ordinary care could think that Nutella was the key element of the pictured balanced breakfast; and (4) in any event, the claims were preempted by federal law.  Ferraro had some success in the California case – it was able to get plaintiffs’ claims based on Ferraro’s website advertising dismissed for lack of standing and an attack on the label dismissed on the ground that state law claims were preempted.  Nonetheless, several claims remained, and Ferrero now apparently has decided that settlement is the better part of valor, as the New Jersey plaintiffs have filed a motion for preliminary approval of settlement.  The settlement will resolve all claims for the New Jersey class, and Ferrero and the California lawyers have indicated that a similar settlement is in the offing in that state.  According to the terms of the proposed settlement, Ferrero admits no wrongdoing but will:

1. Pay $2,500,000 to the class;
2. Add “Nutrition Keys” to the front of the labeling for Nutella, which prominently display the amount of calories, saturated fat, and sugar content of the product;
3. Change the statement on the back of the label from “An example of a tasty yet balanced breakfast” to “Turn a balanced breakfast into a tasty one”;
4. Replace certain television advertisements it had been running, allowing class counsel to comment on the replacement commercials before they run;
5. Replace certain website content regarding Nutella.  

It would be easy for manufacturers to dismiss these lawsuits as simply a company allegedly going too far with claims about its product, but we see this as the latest in a growing trend of plaintiff scrutiny of advertising claims for foods and similar products.    Multi-million-dollar settlements, with correspondingly significant attorneys’ fee awards, provide ample incentive.