Month: April 2015

Michigan Craft Brewers Beware: FDA Labeling Rule May Impact Your Business

Posted on by Patrick Morin

Over the past two years Michigan business owners spent considerable time implementing procedures to comply with the health care requirements under the Affordable Care Act (the Act). Just when business owners thought they could turn their attention back to doing what they do best (i.e., running their business), regulators issue new requirements, this time targeting the food and beverage industry.

The FDA’s final rule on food labeling (the Rule), as required under the Act, provides for nutrition labeling of “standard” menu items for chain restaurants with 20 or more locations and “similar retail food establishments.” Unlike earlier drafts, the final Rule requires chains to also issue caloric information for alcoholic beverages. While the Rule does not specifically apply to breweries, there may be unintended consequences that impact craft brewers, especially those brewers that sell to chain restaurants. Michigan craft breweries should take notice.

Michigan, ranked fifth in the nation, is home to more than 150 craft breweries. Consumer demand for craft brews continues to grow and many national chain restaurants operating in Michigan already carry local craft beers on their menus. Many restaurants rotate their offerings regularly and list the current beer selection on menu boards. While restaurants are ultimately responsible to collect nutritional information on the items they serve, it is unclear whether restaurants would instead place this burden on brewers.

The FDA has noted that restaurants can utilize nutritional databases in order to determine calorie content on the beers they offer, such as the USDA National Nutrient Database for Standard Reference.  According to the database, the calorie count for a “typical beer” is 153 calories per 12 oz. serving. But the problem is craft beers are not “typical”.  They are full-flavored concoctions which ingredients vary greatly from one brewery to another. Thus, labeling all craft beers 153-calories would clearly be inaccurate.

Under the Rule, businesses must provide an inspector with information substantiating nutrient values, including the method and data used to derive these nutrient levels. A “responsible individual” for the business must certify that the information contained in the nutrient analysis is complete and accurate.  So if a restaurant lists a 350 calorie beer as having that 153-calorie count, they run the risk of violating the Rule, especially if they cannot demonstrate they took reasonable steps to ensure the brewery adhered to the 153-calorie count. Failure to comply with the Rule, or if you don’t get it right, the menu item will be deemed “misbranded” which is a misdemeanor under the Food Drug and Cosmetic Act. The FDA retains the discretion to hold those “responsible individuals” who certify the menu labeling, criminally liable for a misbranding violation.

Knowing the risk of a potential misbranding violation could lead to restaurants not accepting the standard reference calorie count, forcing brewers to supply nutritional information. Thus, craft brewers may be faced with a choice: either supply calorie counts or take their products elsewhere. But with rumors circulating that the Alcohol Tax & Trade Bureau (the TTB) — which is responsible for approving alcohol labels — could look at its own labeling policies and enforce stricter regulations in the near future, even possibly requiring nutritional information on beer labels, craft brewers may need to consider analyzing their beers now. So in the event the TTB follows the FDA’s lead and implements new labeling requirements, brewers will be prepared and know the caloric content of their products.

Craft brewers have long stressed a “drink better, not more” philosophy, unlike the mass-produced beers who have offered low-calorie light brews for decades, so hopefully consumers won’t be deterred by the calorie counts. It may slow cross-over growth, but it won’t stop the momentum. My prediction: calories or not, craft beers are here to stay.

Label Reviews Are Critical For All Food Businesses

Posted on by Patrick Morin

Imagine you are sitting at your desk on a Tuesday morning.  You are going over your financials in preparation for tax season when your assistant knocks on your door.  She walks into the office and drops mail on the desk.  She mentions an envelope addressed to your attention with the FDA listed as the return address. Curious, you open it and to your surprise you find a letter stating that your company has violated the Federal Food, Drug, and Cosmetic Act (the Act). The letter states that you have 15 days to respond with corrective actions you plan to take in response to the violations.

This isn’t a hypothetical, this is similar to what happened to Kind LLC last month, the maker of Kind bars.  In the Warning Letter, the FDA noted multiple violations, including the improper use of the word “healthy” on the Kind bar labels.  Pursuant to federal regulations, a food can make a “healthy” claim only if it has 1 gram or less of saturated fat per serving and gets no more than 15 percent of its calories from saturated fat. The four Kind bars called out in the FDA’s letter—Fruit & Nut Almond & Apricot, Fruit & Nut Almond & Coconut, Kind Plus Peanut Butter Dark Chocolate + Protein, and Kind Plus Dark Chocolate Cherry Cashew + Antioxidants—have between 2.5 and 5 grams.

The letter also stated the use of the “+” symbol was in violation of the applicable regulations. The regulations state that “plus” can be used if a food has 10 percent more of a nutrient than another similar food, and the product lists that food. The Kind bars don’t.  Kind bars carry a “good source of fiber” claim, which claim is defined as 10 to 19 percent of the DRV for a nutrient. In this case, that’s 2.5 to 4.75 grams of fiber—and the Kind bars in question do meet the definition. However, if the product is not low-fat (containing 3 grams or less), then that fact must be disclosed on the label, near the fiber claim. Again Kind bars don’t.

While these are only some of the alleged violations in the Warning Letter, you can see the list is pretty extensive.  Not only must Kind respond to the FDA with corrective actions, but now they face the significant expense of revising their labels, adverting and website.  This is no small task for an international food producer. However, this risk could have been mitigated through an in-depth label review. The FDA’s regulations covering health and nutritional claims are complex and not always transparent.  As demonstrated in the letter to Kind, this is a reminder of how important it is for food businesses to have an in-depth review of their labels and marketing prior to production.  Most important to point out is that FDA regulations affect businesses of all sizes, so small and startup food businesses with limited experience navigating federal regulations should pay particular attention to their labels and marketing.

If your business is unsure whether a product label is in compliance with, or need assistance in adapting your label to meet, FDA regulations please contact our attorneys at Morsel Law.

How Beverage Companies Can Avoid Unnecessary Lawsuits

Posted on by Patrick Morin

In a recent suit filed in California, Millennium Products, Inc., the maker of GT’s Kombucha and Synergy drinks, was challenged on claims that its drinks contain “powerful antioxidants”, which plaintiffs claim is in violation of the Food, Drug and Cosmetics Act because the antioxidant statements it makes are misleading and unauthorized nutrient content claims as proscribed by the FDA.

Pursuant to federal regulations, a nutrient content claim is a claim on a food product that directly or by implication characterizes the level of a nutrient in the food (e.g., “low fat,” “high in oat bran,” or “contains 100 calories”). Only those claims that are specifically defined in the regulations may be used, all other claims are prohibited. Previously approved nutrient content claims characterize the level of a particular nutrient (e.g., ‘low sodium’), whereas a term such as ‘high in antioxidants’ ties a claim (i.e., ‘high’) to a class of nutrients that share a specific characteristic (i.e., they are antioxidants).

GT’s label use lists “EGCG 100mg” (a polyphenol found in tea with recognized antioxidant properties) in order to substantiate their antioxidant claim. However, for claims characterizing the level of antioxidant nutrients in a food, a reference daily intake (RDI) must be established for each of the nutrients that are the subject of the claim, but in this case there is no established RDI for EGCG. Moreover, since GT’s product is a type of tea, and the FDA considers tea a food with no nutritional significance, the plaintiffs claim the drinks do not contain “even a single antioxidant nutrient with an established RDI.”

It is important to note that Millennium Products, Inc. isn’t the only company to face legal action in recent years from consumers making false labeling claims. Recently, Twinings North America, Inc. was sued for allegedly deceiving consumers by mislabeling its teas as a “natural source of antioxidants”, however, in this case the judge dismissed the lawsuit stating that a “natural source of antioxidants” is not a nutrient content claim because it did not state or imply the level of antioxidants. However, in warning letter sent in 2012 the FDA noted that the statement “very powerful antioxidant” is an unauthorized nutrient content claim because “very powerful” characterize the level of antioxidants in the product. Other tea producers were also sent warning letters by the FDA over their green teas because they were improperly labeled with the term “antioxidant” (see Unilever, Inc. maker of Lipton Tea and Dr Pepper Snapple Group).

As lawsuits are increasingly targeting food and beverage makers challenging their labeling claims, it is more important than ever to make sure your labels are thoroughly reviewed prior to introducing the products into the marketplace. If your business is unsure whether a product label is in compliance with, or need assistance in adapting your label to meet, FDA regulations please contact our attorneys at Morsel Law.

FDA Releases Menu Labeling Guide for Small Businesses

Posted on by Patrick Morin

On December 1, 2014, the Food and Drug Administration (FDA) issued a final rule on food labeling, as required under the Affordable Care Act, which provides for nutrition labeling of “standard” menu items for chain restaurants with 20 or more locations and “similar retail food establishments.” If you are a restaurant owner the menu labeling rule will most certainly impact on your bottom line. The rule is expected to cost the food industry some $315 million to implement and about $44 million per year after that, according to the FDA’s original cost-benefit analysis. In addition to restaurants, the rule applies to food facilities in entertainment venues, such as movie theaters and amusement parks, take-out food establishments, bakeries, convenience stores, grocery stores and supermarkets.

Several months have now past since the rule was finalized and business owners continue to show frustration with the hundreds of pages of legalese they are forced to navigate in order to prepare their companies for its implementation. Thus, in response to this frustration, the FDA has released a Small Entity Compliance Guide, which is intended to restate the rule’s requirements in plain language.

The guide provides detailed guidance on many topics, including: types of establishments covered; how to label menus with nutritional information; how to determine calorie content of foods; and the consequences of misbranding. Most importantly, the guide provides visual examples on how to calculate calories when to toppings change on particular menu items, such as ice cream sundaes and pizza. The guide also discusses the food labeling requirements in great detail, including: labeling requirements for standard menu items; formatting requirements for declaring calories; nutritional information; and requirements for food that is self-service or on display.

The rule is scheduled to go into effect on December 1, 2015, therefore it’s important for businesses to start planning for the implementation. Although the guide was meant to make it easier for small businesses to comply, the rule’s requirements for determining caloric content and labeling menus are highly detailed and complicated. Therefore, if your small businesses needs assistance in complying with the rule, please contact us at Morsel Law.