FTC Green Guides, Sustainability & Third Party Certification
Our previous blog entry discusses last week's release of the Federal Trade Commission's ("FTC") revised, proposed "Green Guides" generally, discussing how the FTC is focused on "deception" and is not taking a radical departure from the 1998 version (the last version) of the Green Guides. But under the new Guides what are the consequences of the FTC's position on sustainability and third-party certification, especially as it relates to food products? The bottom line is that marketers of sustainable food products should re-evaluate (1) what sustainability claims are made and (2) the benefits of proper third-party certification.
The FTC, in its commentary to the revised, proposed Green Guides, reports that it "is unable to provide specific advice on sustainable as an environmental marketing claim. Unlike other claims we tested, the term contains no cue alerting consumers that it refers to the environment."
Yet the FTC acknowledges that sellers of food (and non-food) products are using the term “sustainable,” and consumer awareness of sustainability issues is growing rapidly. The FTC seems to be leaving itself room for action against marketers of "sustainable" products if it’s clear that consumers are meant to believe that “sustainable” is an environmental marketing claim. And, as discussed in our previous entry, marketers need to be wary of compliance with not only the FTC but also state consumer protection laws, which often reach further than federal law on the marketing of food products.
FTC has also chosen for the first time to address in the Green Guides what it calls "Certifications and Seals of Approval." FTC makes clear that "It is deceptive to misrepresent, directly or by implication, that a product, package, or service has been endorsed or certified by an independent third-party." And, even
"third-party certification does not eliminate a marketer’s obligation to ensure that it has
substantiation for all claims reasonably communicated by the certification."
Food manufacturers and retailers who use a seal or logo to designate sustainability should evaluate whether the seal or logo could be read by the FTC, a consumer or a plaintiff’s lawyer to imply third-party certification or endorsement. In other words, if independent third-party certification isn't used, you should ask yourself the following questions:
- Is it clear to anybody reading your label (FTC, consumers, plaintiffs, bar, etc.) that the claim is only your claim and not a third-party claim?
- Do you have substantiation (i.e., science) to back up any claims of environmental sustainability (whether yours or a third party’s)?
If you as a food manufacturer or seller can't answer both questions affirmatively, your marketing may be a liability. The SC Johnson Company, for example, is the subject of a consumer class action alleging that the company's own "greenlist" certification program was deceptive. Often, the realistic choice may be a) not to market the product as environmentally sustainable or b) to switch to a substantiated third-party certification.
For food, your best choice may be Food Alliance certification, which is now the most comprehensive certification for sustainable food and the gold standard.*
*In the interests of full disclosure, I serve on the non-profit Board of Directors for Food Alliance and am a staunch advocate of the organization.
Take-Aways from November 3 Webinar: Making Good Marketing Claims: Product Labeling Pitfalls, Third-Party Certification and "Green Washing"
Tuesday, November 3, we held our second webinar in a three-part series on bringing sustainable food products to market. Thanks again to our presenters and attendees. The recorded webcast was archived and is accessible at this link. Click here to access a PDF copy of the presentation slides.
Take-aways from the second webinar include:
• With the exception of the FDA’s policy on “natural” claims, it has been silent on “green claims.”
• “Natural” could be hottest claim on the market but is becoming controversial. Food companies should continually monitor the marketplace to see which claims are drawing challenges.
• Food companies should pay attention to consumers union findings regarding eco-label credibility.
• While third-party certification may not help every food business, certification is a tool that supports your brand and your marketing/sales strategy.
• Retail leaders in sustainability, such as Burgerville, aspire for continuity of sustainability in each link in its supply chain.
• To understand the FTC green guidelines companies need to appreciate three key points: substantiation, specificity and qualification.
• To avoid “green washing” issues, food companies need to understand the complex matrix of federal, state, local and foreign statutes, regulations and guidelines governing “green” advertising.
I hope you can join me, Steve Marinkovich from Propel Insurance, my colleague at Stoel Rives, Anne Glazer, and Peter Truitt from Truitt Bros., Inc. on November 17, at 9 am PST, noon EST, (live Twitter feed at #sustainlaw) for the last webinar in the series as we discuss the following:
• Preventing and Dealing with Consumer Fraud, Unfair Trade and False Advertising Claims from Consumers and Competitors
• Real-Life Businesses Approaches to Sustainability, Product Labeling and Marketing
• Coping with Increased Risks of Food-Borne Illness from Local or Small Farm Products
• Insurance Coverage You Need, Think You May Have but Don’t Have or Think You May Want but Shouldn’t Get
Learn About Who Is Setting Sustainability Standards and How to Make Good Sustainability Claims: Register for the 11/3 Sustainable Foods Webinar
If you haven’t already, register here for the second in a three-part webinar series on environmentally friendly sustainable food products, to be held at 9 am PT, Tuesday, November 3. This installment of the series will focus on sustainability standards, third-party certification and avoidance of “green-washing.”
The webinar will feature:
- FDA regulatory lawyer Ricardo Carvajal from Hyman, Phelps & McNamara;
- Roberta Anderson from Food Alliance, the nation’s leader in setting third-party sustainability standards for food production;
- Alison Dennis from Burgerville, a traditional quick-service restaurant on the cutting edge of sustainability; and
- Advertising lawyer Jere Webb from Stoel Rives.
The webinar is interactive, and those listening live will be able to submit questions. We will strive to answer all questions either during the broadcast or off-line directly with listeners.
If you missed the first installment, you can read about the take-aways and replay the webinar on demand here. The slide deck can be downloaded here.
Environmentally Sustainable Foods: Dispelling Fear and Understanding That Sustainability Must Be Good for Business
Stoel Rives is proud to sponsor an upcoming webinar series on legal and business aspects of bringing sustainable food products to market. Industry representatives will talk among other things about what sustainable food products are, help dispel the fears of traditional food companies, discuss strategies for minimizing business and litigation risks, and underscore the importance of sustainable foods as a profit-making enterprise.
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The first session, October 20, will discuss what an environmentally sustainable food product is, how a company may need to rethink research and development and supply chain issues, and financing. Participants include Steve Rowe, Sr. V.P. and General Counsel from Darigold, Inc. and its parent Northwest Dairy Association, food supply chain consultant Monica Gelinas from Karp Resources, and business lawyers Joel Dahlgren and Duff Bryant from Stoel Rives.
The second session, November 3, will look at what the FDA and USDA may do to define sustainability, third-party certification issues and green washing. Participants include Alison Dennis, Director of Supply Chain from Burgerville, Roberta Anderson from third party certifier Food Alliance, FDA lawyer Ricardo Carvajal from Hyman Phelps and trademark lawyer Jere Webb from Stoel Rives.
The third session, November 17, will look at increased risks presented by sustainable food products and strategies to mitigate those risks. This panel will include Peter Truitt, CEO of Truitt Brothers; Steve Marinovich, insurance broker at Propel Insurance; advertising lawyer Anne Glazer from Stoel Rives and me.
Each session will be 60 minutes and feature an interactive, "rapid fire" roundtable format. The panels will also respond in real time to questions submitted by listeners. Registration is free. Contact me if you would like further information.
Sustainability and Consumer Confidence in Food Safety
For food sellers interested in promoting a “sustainable” brand and inspiring food safety confidence in their consumers, meet Food Alliance. Food Alliance “is a nonprofit organization that certifies farms, ranches and food handlers for sustainable agricultural and facility management practices.” It bills itself as “the most comprehensive certification program for sustainably produced food in North America.”
I’ve recently joined the Food Alliance Board of Directors (in fact, I’m headed to Portland today for a board meeting). My hope is to assist Food Alliance in becoming more widely accepted and mainstream. Credible third-party certification, such as Food Alliance provides, offers a transparent pathway to sustainability of our food supply and consumer confidence in food safety.
Food Alliance takes a holistic approach that is broader and more dynamic than organic certification, which does nothing to address food contamination from pathogens such as Salmonella, E. coli, and Listeria (in fact, many experts believe that organically grown food may be more likely to be contaminated by these pathogens). By way of example, Food Alliance certification standards, among other things, address “soil and water quality,” “ensure the health and humane treatment of animals,” “conserve energy and water,” and “ensure quality control and food handling safety.”
For more on why a holistic, independent third-party certification correlates with food safety (and accompanying consumer confidence), I’d suggest reading this op-ed piece co-authored by Food Alliance Executive Director Scott Exo, which was written earlier this year in the wake of the PCA peanut recall.
Are Organic Foods Safer? Will Consumers Continue to Favor Organics?
Nobody disputes that consumers have a favorable view of organic certification in foods. Consumers generally believe that organic foods are healthier, and many believe they taste better. Yet, among food scientists, uncertainty prevails as to whether organics are safer, especially raw fruits and vegetables.
Absence of synthetic fertilizers is a primary distinction between organic and non-organic foods. And, from a safety standpoint, the absence of pesticides is the only provable claim that organic foods are healthier. But does the absence of one hazard imply the existence of another?
The prevailing pesticide substitute for organic foods is manure or composted manure. Dangerous pathogens such as E. coli O157 reside in manure. Some guidelines exist for composting manure. Unfortunately, as I learned recently in a presentation by Dr. Francisco Diez-Gonzalez at the University of Minnesota Food Science Department, these guidelines were written a decade ago, before science began to understand the prevalence of E. coli in the environment.
Science now understands that E. coli O157, for example, can persist for years in soil, let alone a more rich environment like manure. In some cases, it may be virtually impossible to rid of an environment of E. coli O157, short of treatment with non-organic substances such as tear gas or asphalt.
Outside of the 2006 spinach outbreak, there have been few food-borne illness outbreaks associated with organic fruits or vegetables. As organic farming continues to grow and detection of food-borne illness increases, the only question is how long it will be until another well-publicized outbreak. When it happens, will consumers continue to believe organic foods are safer? Will the industry be ready with evidence that proves the benefits of organic farming outweigh its risks?
