Clearly, the government further opened the door to market confusion when it required labels indicating GMOs, although USDA still has a couple of years to come up with details about how that is to be done. In the meantime, USDA is allowing labels that proclaim negatives -- that is, the absence of GMOs. The agency is knee-deep in rules about just how that is to be done since USDA will not inspect the products.
In addition, confusion continues to grow around use of the term "natural," which is used in a wide range of personal care products and other consumer goods even though, as Bloomberg recently noted, neither consumers nor regulators can define the term. The U.S. Food and Drug Administration recently spent more than a year trying to define "natural" for food and now has thousands of comments to sift through. It's unlikely we'll hear a report before next year.
The term "natural" has a built-in problem, Bloomberg said. Many consumers choose "natural" food rather than "USDA certified organics," which are seen as more expensive. The phrases consumers associate with natural labels on meat and packaged or processed food include no antibiotics, no artificial ingredients, and no GMOs, among other attributes. The problem is, "that's not necessarily the case," Bloomberg said.
"Those who don't want to do as much to get organic certification can kind of take a cheat and make claims on their products that don't really match up to what organic is," Urvashi Rangan, who leads Consumer Reports' analysis and advocacy on safety and sustainability issues, told Bloomberg. "That doesn't mean everybody who's using natural is distorting the truth, but it does mean that they can."
As a result, Consumer Reports' nonprofit policy arm has called for natural food labels to either be fixed or banned altogether, Bloomberg said.
Part of the problem is risk for manufacturers, according to Levi Stewart, a consumption sector analyst for the Sustainability Accounting Standards Board. "Companies realize that there's a lot of growth in demand for natural products," but that trend that is bringing increased scrutiny that can result in costly lawsuits and tarnished brand reputations."
The food industry faced more than 150 class action lawsuits in 2015, according to a tally from law firm Perkins Coie, which has defended General Mills, Costco and other companies. Most of the cases were over natural claims or false statements of fact, such as misstating calorie or fat content.
"It's like a securities case where somebody says this is a great investment ... but they also say you should read the prospectus," Thomas Doyle, a partner at Baker & McKenzie LLP, said.
In a new trend, manufacturers and retailers that want to differentiate their products are adopting the Environmental Protection Agency's recently revamped label for chemicals that are deemed safer for human health and the environment, Bloomberg said. For example, Seventh Generation, which makes natural laundry detergent, dish soap and other products told Bloomberg that for industries where there is no common definition of natural, "We've tried to be as clear as we can in our use of the term."
To Seventh Generation, "natural" means mostly plant-based, a claim backed up by the USDA's bio-preferred label. But some of its products also contain a small percentage of synthetic ingredients, which were the subject of a $4.5-million class action settlement proposed in July.
Some manufacturers are moving away from the use of natural labels. Roughly one-fifth of food products launched in 2013 to 2014 claimed to be natural, down from about 30% in 2009 and 2010, Bloomberg said.
"There aren't any easy answers except to not use these claims with wild abandon but to be more cautious and to use them sparingly when they're accurate," said Andrea C. Levine, who directs the advertising industry's self-regulatory body at the Council of Better Business Bureaus. Otherwise, words like natural and organic will "cease to mean anything at all if they're slapped on everything," she said.
It seems clear that the government is adding to the marketing confusion regarding the use of health-based claims. It is very hard to see how natural can be defined in terms of most food products, and it likely will be necessary to follow Consumer Report's suggestion and ban the term. Alternatively, as the Better Business Bureau fears, health-based claims will become weaker over time until they cease to mean anything at all, Washington Insider believes.