$5 Million Later, Truvia® is Still “Natural”October 4, 2013
On September 19, 2013, Cargill entered into a $5 million settlement agreement to dispose of a class action lawsuit regarding its advertising for Truvia® products as “natural.” Plaintiffs charged that the products are not natural because they contain ingredients that are “‘highly processed,’ synthetic and/or derived from GMOs,” and that the descriptions of the products and their ingredients, namely stevia leaf extract and erythritol, are inaccurate or misleading. In the agreement, Cargill denies that its marketing, labeling, and advertising violate any legal requirement.
The agreement is intended to address all current and future claims concerning the marketing of the products as natural (for purposes of the settlement, Cargill recognized a nationwide class of consumers). The agreement consists of four components: 1) the $5 million settlement to cover attorney’s costs (1.59 million) and consumer refunds, 2) an administration fund of 300,000 dollars, 3) modifications to claims on packaging and labels, and 4) modifications to the website.
Interestingly, the parties agreed that Cargill can continue the use of the tagline “Nature’s Calorie-Free Sweetener” on labels, as long as the tagline is linked to a statement referring consumers to FAQs on the website where they can obtain more detailed information on the product’s manufacture (more about that in a moment). Cargill can also continue to describe erythritol as a “natural sweetener” on labels, but instead of stating that it is produced by a “natural process,” Cargill will state that it is produced by a “fermentation process.”
The FAQs on the website address the processing of stevia leaf in some detail. In essence, the leaves are harvested, dried, and steeped in hot water, and the extract is then filtered, purified, and dried. The FAQs also address the production of erythritol. Notwithstanding the label changes described above, the FAQ agreed to for erythritol states that it is “produced through a natural fermentation process” – a reaffirmation of sorts that fermentation is a natural process. The FAQs also include the following explanatory text on processing aids:
Like in other finished foods, including sugar, processing aids suitable for use in food are used in the production of both stevia leaf extract and erythritol. These aids help either extract, isolate or purify components of the ingredients. Under the U.S. Food and Drug Administration regulations, our processing aids are not subject to labeling requirements because they have no technical or functional effect in the finished food and because they are either not present or are present at only insignificant levels in the finished product.
The agreement disclaims any intent to address the merits of the claims, but could still have an impact. It would not be surprising to see a trend toward greater disclosure with respect to processing methods, especially given the continuing lack of clarity regarding the meaning and scope of “natural.”
The preliminary settlement hearing, in which the Court will consider whether it should approve the proposed settlement, is scheduled for October 23, 2013.