The Claim Game: Getting the Most Out of Your
Label and Playing by the Rules

By Ivan J. Wasserman and Svetlana N. Walker


A strong claim can be the selling point that makes a consumer pick one product over the other, but playing the claim game can get quite tricky. This makes many processors shy away from making any claim at all. Or others might make a bold claim not realizing that the claim they are making could cause them serious problems if they don’t play by the rules. While there are many complex regulations, being able to highlight the benefits of your product is most certainly worth the effort of learning how to play the game right. Here are some of the claims out there and the regulations that govern the game.

The Rulemakers and Referees: the FDA, the FTC and the NAD
While the USDA is the most obvious federal agency in charge of regulating organic food claims, claims appearing on the labeling and advertising of organic foods are also regulated by the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC). The FDA has primary jurisdiction over food labeling, while the FTC has primary jurisdiction over claims made in advertising. Both the FDA and FTC look to each other for guidance on labeling and advertising issues in an effort to be consistent in their efforts to protect consumers from false or misleading information. Both agencies prohibit false or misleading claims. In addition, the FTC requires that advertisers have adequate substantiation for all claims being disseminated in an ad.

Yet another source of guidance for labeling and advertising claims comes from the National Advertising Division (NAD), a self-regulatory body administered by the Better Business Bureau. While the NAD doesn’t deal directly with technical FDA health claims, the NAD provides a venue for competitors to bring challenges to national advertising and labeling claims that they believe are false, misleading or unsubstantiated. In these self-regulatory proceedings, the challengers identify the allegedly false claims and the burden is on the advertiser to submit information to substantiate the claims.

In addition, the NAD can challenge advertising claims on its own. The NAD evaluates the evidence submitted by both sides prior to issuing nonbinding recommendations that either find the challenged claims to be substantiated, or recommend that the advertising claims be modified or removed altogether. While there is not a legal requirement for companies to follow the NAD recommendations, it is usually in the best interest of a company to comply. If not, the NAD can forward the recommendation to the FTC or FDA, who may take legal action.

Health Claims: The Categories
With all the coverage of health issues in the media on how to live longer, today’s consumer is more educated than ever and opting for healthier choices. While many processors are formulating foods to meet this demand, it is important to know how to communicate these health benefits to the consumer. The nature and format of this information depend on the claim category in which the information is classified. Some of these fall into FDA regulated claims and can be quite complex, while others are simpler and can be stated without FDA pre-approval.

Authorized Health Claims
These claims characterize a relationship between a food, a food component, dietary ingredient or dietary supplement and risk of a disease. The FDA authorizes these health claims based on an extensive review of numerous scientific studies, which are often submitted with a health claim petition to determine that the nutrient/disease relationship is well established. Some of the currently approved health claims state a relationship between:
• Calcium and osteoporosis
• Sodium and hypertension
• Dietary fat and cancer
• Fiber-containing grain products, fruits and vegetables and cancer
• Dietary saturated fat and cholesterol and risk of coronary heart disease
• Fruits, vegetables and grain products that contain fiber, particularly soluble fiber and the risk of coronary heart disease
• Fruits and vegetables and cancer
• Folate and neural tube defects
• Dietary sugar alcohol and dental caries
• Soy protein and risk of coronary heart disease
• Plant sterol/stanol esters and risk of coronary heart disease
• Whole grain foods and risk of heart disease and certain cancers
• Potassium and the risk of high blood pressure and stroke

All of these health claims have undergone FDA review and have been approved by the agency, meaning that they can appear on food product labels if they satisfy all of the specified criteria. For instance, in order to make the authorized calcium and osteoporosis health claim, the food has to be high in calcium as well as assimilable (bioavailable) and the phosphorus content cannot exceed calcium content.

Moreover, this claim must also note the risk factors of osteoporosis, the primary target population, additional factors necessary to reduce risk and how calcium is related to reduced risk of oseteoporisis. In addition, foods or supplements containing more than 400 mg of calcium must state that total intakes of greater than 2,000 mg of calcium provide no added benefit to bone health.

Regulations for approved health claims also feature model claim statements, which are a good resource for modeling individual claims and understanding how the FDA incorporates all of the claim requirements into a marketable statement. With regard to calcium and osteoporosis, for example, the model claim language is: “Regular exercise and a healthy diet with enough calcium helps teen and young adult white and Asian women maintain good bone health and may reduce their high risk of osteoporosis later in life.”

Qualified Health Claims
When there is strong emerging evidence linking a food to reduced risk of disease, yet the evidence is not established enough to issue an approved health claim, the FDA may permit a qualified health claim. Anyone can petition the FDA to permit a qualified health claim by submitting a petition and complying with the procedural requirements set out in FDA regulations.
Currently permitted qualified health claims include:
• Tomatoes and prostate, ovarian, gastric and pancreatic cancers
• Calcium and colon/rectal cancer and calcium and recurrent colon/rectal polyps
• Green tea and cancer
• Antioxidant vitamins and cancer
• Nuts and heart disease
• Walnuts and heart disease
• Omega-3 fatty acids and coronary heart disease
• Corn oil and heart disease

To indicate that the evidence supporting the claim is limited, qualifying language is included as part of the claim. For example, in order to make the qualified health claim about omega-3 fatty acids and coronary heart disease, marketers must first make sure that their food does not contain more than 2 grams of EPA or DHA per daily serving and that it meets the threshold criteria for total fat, saturated fat, cholesterol and sodium content. In addition, all foods making an omega-3 fatty acids qualified health claim must meet the 10 percent minimum nutrient requirement (vitamin A 500 IU, vitamin C 6 mg, iron 1.8 mg, calcium 100 mg, protein 5 g, fiber 2.5 g per reference amount consumed) prior to any nutrient addition.

Only after meeting all of those factors can a marketer make the following qualified health claim: “Supportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease. One serving of [name food] provides __ gram(s) of EPA and DHA omega-3 fatty acids. [See nutrition information for total fat, saturated fat, and cholesterol content].”

Because there are many detail-oriented requirements that apply to each approved and qualified health claim, making wise marketing and labeling decisions can be especially complicated. For instance, the FDA may pursue an enforcement action against a marketer of a fiber-containing fruit, vegetable, or grain product that makes a soluble fiber and cancer claim if the product is not low in fat, or if it is not a good source of dietary fiber without fortification.

With regard to a similar product claim involving coronary heart disease, the product would be deemed noncompliant if it made the approved health claim but did not list the soluble fiber content on its label, or was not low in cholesterol. Therefore, it is especially important to ensure that a food complies with all of the individual requirements established by the FDA prior to making an authorized or qualified health claim.

Nutrient Content Claims
Nutrient content claims tout the level of a nutrient in a food and are one of the less complex claims and thus most widely used options. Most nutrient content claim regulations apply only to those nutrients or dietary substances that have an established daily value and only those nutrient content claims that have been specifically authorized by the FDA can appear on food labels.

Authorized nutrient content claims include claims such as “good source” (a good source of calcium), “more” (more fiber, more protein), “light” and “healthy” claims, as well as a number of claims related to sugar, calorie, sodium, salt and fat content such as “low,” “free” and “reduced”. Healthy, for instance, has been defined as an implied nutrient content claim that characterizes a food that has less than specified levels of total fat, saturated fat, cholesterol and sodium. To claim that something is “high” in a nutrient it must contain at least 20 percent of the daily value, or to say a “good source,” there has to be at least 10 to 19 percent of the daily value. These regulations can be found in 21CFR 101, subpart D, in the Code of Federal Regulations. FDA has issued warning letters to those companies that do not meet nutrient content food standards, either by failing to comply with the established nutrient level requirements or by making nutrient content claims that are not authorized by the agency.

Structure/Function Claims
As mentioned above, a health claim describes the effect a substance has on reducing the risk of or preventing a disease. A structure/function claim, on the other hand, describes the role of a substance intended to affect the structure or function of the body. These claims are more generalized and, unlike the others mentioned prior, they do not require pre-approval.

Structure/function claims may not make any claims implying that the food can diagnose, treat, cure, mitigate or prevent any disease. Claims that purport to do any of those functions are considered to be impermissible “disease claims” by the FDA. Disease claims can transform a product into an unapproved new drug and may result in agency enforcement action depending on enforcement priority and context of the specific claims being made. As a general matter, if the statement identifies a specific disease and directly references the product or its ingredients, it would imply that the product itself has an effect on that disease, which would transform the intended structure/function claim into a disease claim.

Another potential regulatory trap lies in the use of pictures, vignettes or symbols on product packaging or labeling. For example, pictures of healthy organs could constitute an appropriate structure/function claim while a picture of an abnormal or diseased organ, such as a picture of clogged arteries, could constitute an implied disease claim. Marketers must be especially careful in using graphics or pictorial aids in describing the benefits of a food or the effect certain nutrients have on body structure or function.

Environmental Claims
The increasing awareness of the negative impact that industrialization has had on our planet and people has led to growth in environmental and social claims. While many of these claims have certifications that govern them, there is not a governmental regulatory body for these claims as of yet. However in response to the growing number of these claims, in 1992 the FTC created the “Guides for the Use of Environmental Marketing Claims,” or the “Green Guides.” The Green Guides are not enforceable regulations, and therefore do not have the force and effect of law, but they provide a general overview of the FTC’s perspective on the use of environmental claims in conjunction with product marketing claims and address terms such as “recyclable,” “biodegradable,” “compostable” and many others.

The Green Guides are a good reference for anyone looking to make such claims. Within the guides companies can find everything from what is needed to substantiate claims to what qualifies a product to use descriptive terms and how to avoid deceptive claims. An example of a deceptive claim is an otherwise recyclable product that contains a minor component that renders the entire product unrecyclable due to impossibility in separating the parts.

The term “recyclable” is also subject to two additional qualifications: (1) claims of recyclability should be qualified to the extent necessary to avoid consumer deception about any limited availability of recycling programs and collection sites; and (2) a product or package that is made from recyclable material, but, because of its shape, size or some other attribute, is not accepted in the recycling programs, should not be marketed as recyclable.

Enforcement
Both FDA and FTC can exercise enforcement jurisdiction in monitoring, evaluating and recommending changes to labeling and advertising claims. These enforcement actions can be in the form of warning letters or dialogue with the agencies, inspections, and investigations. More commonly, however, marketers that advertise nationally may be faced with scrutiny from the NAD, which devotes the majority of its resources to policing advertising claims, either through competitive challenges, or through self-initiated inquiries. In a recent case dealing with “fair trade” coffee, the NAD considered whether fair trade coffee advertising claims had misled consumers. In particular, the NAD focused on two advertising claims including that the advertiser was the largest purchaser of fair trade certified coffee in North America and that the company-operated stores featured fair trade certified coffee as the “coffee of the week” on a quarterly or more frequent basis. In its response, the advertiser explained that its communications to consumers regarding its fair trade coffee were limited, and that they did not state or imply that the coffee was available any more frequently, or on any more widespread basis, than any other type of coffee available to consumers in the store.

In addition, the advertiser submitted data from an independent certifying organization showing that 21 percent of the fair trade certified coffee imported into the United States was purchased by the advertiser, making it the largest purchaser in America. The advertiser also submitted store guides and planning schedules demonstrating that its fair trade coffee was featured on at least a quarterly basis in its store locations. In reviewing the evidence submitted, the NAD held that the advertiser had provided adequate substantiation for its fair trade advertising claims.

Similarly, the NAD has also examined a variety of other eco-terms that appeal to consumers, including “recyclable,” “biodegradable” and “environmentally friendly,” and has emphasized the importance of proper claim qualification to avoid overstating the benefits of the product or product packaging, such as the biodegradable content of product packaging.

Thus, while processors may consult with independent certifying entities to participate in various eco-programs, they must still fulfill the criteria established by federal agencies with regard to claim substantiation and qualification. The rising prominence of eco-farming and global trade concerns will likely be a source of future regulation as to the types of claims that can be made about product source origin, harvesting, processing and final product manufacture.

Conclusion
Given the intricacies of the current organic foods regulatory and enforcement regimes, processors are faced with a number of challenges in attempting to navigate the marketing and labeling terrain. Aside from meeting the basic requirements for organic foods established by the NOP, organic food processors must also consider the FDA’s jurisdiction over labeling claims, including the communication of health and disease risk mitigation information, and the FTC’s jurisdiction over all advertising claims.

In addition, as organic foods grow to dominate the market share, organic processors may be faced with competitive challenges from the industry. These intersecting priorities require organic processors to engage in a complicated exercise of risk prevention and mitigation to ensure that their products, and the success of their business, is secure in this marketing field.

Ivan Wasserman is a partner at Manatt Phelps & Phillips, and a member of the firm’s Advertising, Marketing, and Media Group. His practice is focused on assisting clients with matters involving the marketing of organic and conventional foods, dietary supplements and cosmetics. With extensive experience advising clients on the advertising and labeling of products that are subject to overlapping FDA and FTC jurisdiction, he works with clients to develop creative approaches to meeting marketing objectives while staying within the constraints of the applicable regulatory framework.

Svetlana Walker is an associate at Manatt Phelps & Phillips. Her practice involves advising clients as to the formulation, marketing strategy and regulatory compliance of foods, drugs, dietary supplements, cosmetics and medical devices. In addition to counseling clients with regard to regulatory FDA matters, Walker also assists clients with advertising of FDA-regulated products.