Over the past decade, food and beverage manufacturers have experienced a surge of litigation that has significantly disrupted their normal operations and introduced a high degree of uncertainty into their labeling and marketing practices. One notable example was the 2018 lawsuit filed against Ben & Jerry's, the popular ice cream manufacturer, which alleged that the company's packaging and advertising mislead consumers about its environmental practices. According to the Organic Consumers Association, the nonprofit that levied the accusation, Ben & Jerry's ice cream products use milk that is sourced from "cows raised in regular factory-style, mass-production dairy operations," CBS News reported. This runs counter to the company's claim that it is committed to "a clean environment and high animal welfare standards."
The uptick in lawsuits has led many government officials to introduce new food labeling legislation that seeks to clarify or expand existing guidelines and protect consumers from inaccurate or misleading statements. While a majority of these cases have centered on "all natural" claims, genetically modified products and meat and dairy substitutes, a new wave of lawsuits targeting geographic food and beverage statements has started to make headlines. To understand how these legal actions may impact manufacturers moving forwards, let's take a closer look at the details.
Craft Brew Alliance Sued for Misleading Consumers About the Origin of Kona Beer
As part of a recent settlement agreement, Craft Brew Alliance has agreed to partially reimburse customers who incorrectly believed its Kona beer products were brewed in Hawaii, Reuters reported. The lawsuit alleged that the company had knowingly misled consumers about the origin of its craft brew through deceptive marketing techniques, leading many shoppers to overpay on 4-packs, 6-packs, 12-packs, and 24-packs of Kona beers. More specifically, the company's use of hula dancers, the Kilauea volcano and other Hawaiian imagery was called into question, along with the invitation to "visit our brewery and pubs whenever you are in Hawaii" that was included on its product labels.
What makes this case so troubling is that the full line of Kona beers include disclaimers that are meant to inform consumers that the beverages were brewed in New Hampshire, Oregon, Tennessee and Washington. Despite these explicit statements, many consumers reported being confused by the branding and suggestive flavors, which included beer names like:
- Wailua Wheat
- Hanalei IPA
- Lemongrass Luau
- Kua Bay IPA
The lawsuit was originally filed back in April 2017 and was granted class action status in September of the following year. Among the specific charges, the plaintiffs alleged that the company had committed common law fraud, intentional misrepresentation, negligent misrepresentation, and unjust enrichment, in addition to violating California's Consumer Legal Remedies Act, Unfair Competition Law and False Advertising Law. This incident illustrates the wide range of liability issues food and beverage manufacturers are contending with and demonstrates the difficulties of adhering to both federal and state laws.
General Mills Faces Lawsuit Over Origin of Cascadian Farms' Frozen Fruit and Vegetables
In early January, several plaintiffs filed a formal complaint against General Mills Inc. and Small Planet Foods Inc. over the origins of their "Cascadian Farms" frozen fruit and vegetable products, claiming that the company misled consumers to believe they were grown at a small Washington farm, Top Class Actions reported. The class action lawsuit alleges that the company's produce is largely sourced from large-scale commercial farms located in different regions around the world, and that its use of the Skagit Valley embel on product packaging constituted an intentional misrepresentation.
Court officials recently denied General Mill's motion to dismiss, finding that the company's labeling practices could plausibly convince consumers that all or most of their ingredients came from the Skagit Valley area. Much like the Kona beer lawsuit, plaintiffs pointed to an invitation on the packaging ("Visit our Home Farm, Skagit Valley, WA Since 1972) as proof of the company's deceptive marketing tactics. While there has not yet been a formal ruling on this case, it's likely that General Mills will be asked to update its Cascadian Farms product labels to prevent future confusion.
These cases represent only a small portion of ongoing litigation aimed at holding food and beverage manufacturers accountable for the geographic claims made on their labels and packaging, yet they illustrate the high cost of unethical marketing practices. Moving forward, companies will need to pay closer attention to the explicit statements included on their product labels and determine whether their branding, images or advertising could potentially mislead consumers about their geographic origins.