Brands that Behave Badly Could Bring More Regulations to Good Companies
It’s been almost 15 years since the National Organic Program (NOP) started restricting the use of the term ‘organic’ on packaging and labeling.
It’s been even longer since the term ‘healthy’ was defined and regulated by the Food and Drug Administration (FDA).
Now the FDA is looking at the term ‘natural’. Here’s why.
Requests for the FDA to Regulate Use of the Term ‘Natural’ on Food Packaging
In Consumers Reports “Peeling Back the ‘Natural’ Food Label” expose the public was asked, “Do you ever buy one brand of cereal, chips, or juice over another because you see ‘natural’ on the label and assume it’s better?” Most people answered yes.
In fact, in a recent Consumer Reports survey of 1,005 adults, more than half of consumers usually seek out products with a ‘natural’ food label, often in the false belief that they’re produced without genetically modified organisms, hormones, pesticides, or artificial ingredients. Nearly two-thirds of those people believe the natural food label means more than it does. Nearly half incorrectly believe that natural claims on labels have been independently verified. 62% of shoppers said they usually buy foods labeled ‘natural.’ And 87% of those surveyed would pay more for a ‘natural’ product if it met their expectations.
The numbers just don’t lie. People care about what they eat. Which is why companies looking to keep their market share during the natural food movement have been slapping the natural claim on any package they like. You will find a number of brands sporting the ‘natural’ label on products that contain everything from artificial preservatives, industrial chemicals such as sodium benzoate and ‘natural’ foods covered in cellulose powder (wood-pulp) to keep small pieces from sticking together. Up until recently, they were getting away with it.
So what exactly does ‘natural’ mean? The Merriam-Webster dictionary elegantly and simply defines natural as “existing in nature and not made or caused by people: coming from nature.”
As far as packaging goes. The word ‘natural’ is meaningless.
Consumer Reports petitioned the FDA in 2014 to define and regulate the term ‘natural’ so shoppers aren’t misled. Last month, prompted by a petition created by Consumer Reports, the FDA started the process to define the term ‘natural’.
The FDA asked for information and public comment on questions such as:
• Whether it is appropriate to define the term ‘natural’,
• If so, how the agency should define ‘natural’, and
• How the agency should determine appropriate use of the term on food labels.
Comments closed May 10th. They received a total of 7,690 comments. Here’s an example one:
What Will a FDA Regulation for the Term ‘Natural’ Mean for Natural Food Companies
Consumer Reports is petitioning that the term ‘natural’ be as regulated as the term ‘organic’. Especially since they virtually mean the same thing. In their Stop Confusing Consumers and Ban the Natural Label campaign they collected 33,036 signatures to have the term ‘natural’ banned from food labels that contain any GMO’s, pesticides, hormones or artificial ingredients.
What does this mean for legitimate companies selling ‘natural’ products? It means another layer of regulation in an already heavily regulated industry. According to Time, some corporate giants have already started to abandon the term ‘natural’ from its packaging, labeling, and marketing materials. Even without an official regulation in place. They state that insiders suspect it’s due to the legal actions or the fear of disputes about misleading labels.
If the FDA bans the term ‘natural’, and companies have to go through the ‘organic’ certification process, here’s what you can expect:
Organic Certification Process and Estimated Costs
The USDA organic products have strict production and labeling requirements. The process will take some time and cost money. But, it’s really not as bad as you may think. And, it’s well worth the efforts. Especially if you would like to use the term ‘organic’ on your principal display panel, or use the USDA organic seal anywhere on the package*.
The basics of what you will need for certification are:
1. Organic products must meet the following requirements: – Produced without excluded methods (e.g., genetic engineering), ionizing radiation, or sewage sludge.
2. Produced per the National List of Allowed and Prohibited Substances.
3. Overseen by a USDA National Organic Program authorized certifying agent, following all USDA organic regulations.
Labeling Organic Products
Here’s a short breakdown of the three different options for labeling organic products. Check out the USDA’s Labeling Organic Products fact sheet for a full list of requirements.
100% Organic
• ALL ingredients must be certified organic.
• Any processing aids must be organic.
• Product labels must state the name of the certifying agent on the information panel.
• May use the seal and/or 100% organic claim.
Organic
• All agricultural ingredients must be certified organic (except where specified on the National List).
• May contain up to a combined total of 5% of non-organic content (excluding salt and water).
• Product labels must state the name of the certifying agent on the information panel.
• May use the seal and/or organic claim.
“Made With” Organic
• At least 70% of the product must be certified organic ingredients (excluding salt and water).
• Any remaining agricultural ingredients must be produced without excluding methods (see basics #1).
• Non-agricultural products must be specifically allowed on the National List.
• Product labels must state the name of the certifying agent on the information panel.
• May state “made with organic (list specific ingredients)”. May not use the seal or represent finished product as “made with organic ingredients”.
If your product contains certified organic ingredients but the product itself isn’t certified, you are only able to identify certified organic ingredients in your ingredients panel.
Costs for Organic Certification
Organic certification costs can vary depending on the size of your production operation and on the accredited agency you choose to use. Sarah Costin, Co-owner of A Bee Organic, an accredited Organic Certification Agency was gracious enough to give us a rough idea of what you can expect if you choose to go through the process. Here’s what we learned:
In general, organic certification costs will include an application fee, site inspection fee, and an annual certification fee based on gross sales of the certified organic product.
• Initial Application Fee: Dependent on the certifier. Average cost can be $275. A Bee Organic charges $200.
• Site Inspection Fee: Depends on the size of the facility/handler, usually less than $500 for a small site.
• Annual Certification Fee: Certification fees are based on a percentage of gross income from the organic products. A Bee Organic charges approximately 0.001%, depending on sales and category. A single ingredient product with less than $10,000 in annual sales could cost approximately $550. Have $100,000 in sales? Then your cost is roughly $850.00. Fees do vary. When looking for a certified be sure to shop around and ask about hidden fees.
The USDA offers a “Cost Sharing Program” on a state by state basis that can save your business up to 75% of the costs associated with the organic certification process, not to exceed $750 per year. The requests for application for this fiscal year is now available. All applications must be received by 5:00 p.m. ET on July 5, 2016.
If you are not ready to obtain an organic certification, no need to worry just yet. While the process to ban the term ‘natural’ has started, it will take some time for it to come to fruition. To keep things in perspective, it took the FDA 6 years to define the terms for Gluten Free labeling.
However, when considering whether to certify or not, take into account the public’s perspective on organic foods. The organics industry reached its record high for sales in 2015 with a total of $43.3 billion, states the Organic Trade Association’s in their recent press release. They also state that the industry has had double-digit growth for the fourth year in a row, with a $3.9 billion increase over 2014.
Because of brands that choose to behave badly, people are starting to lose trust in food labels. Certifications will add a level of accountability to the brands touting ‘natural’ foods, making it easier for legitimate ‘natural’ food companies to promote their “better” products. It’s just a matter of those legitimate companies finding the time and cash to go through the process.
How do you feel about the FDA regulating the term ‘natural’? Let us know in the comments.
*Some operations are exempt from certification, including organic farmers who sell $5,000 or less.
