 N.Y. 2017) at p. 46.
Consumer concerns over the impact of modern food production on health and the environment have helped drive the popularity of Process Labeling. The Council for Agricultural Science and Technology, a nonprofit scientific organization, recently assembled a cross-functional panel of experts to assess the phenomenon and make policy recommendations. The panel concluded:
Under appropriate government oversight, these ‘process labels’ can effectively bridge the information gap between producers and consumers, satisfy consumer demand for broader and more stringent quality assurance and ultimately create value for both producers and consumers.
The mounting popularity of Process Labeling is readily apparent. In the U.S., consumer purchases of organic products have reached record levels, amounting to over $43 billion last year, and up 11% over the previous year. The demand for environmental or “eco” labeling is robust, with more than 460 different labels relating to 25 industry sectors now in use in nearly 200 countries. Food companies are embracing Process Labeling in the name of “transparency,” with many committing to provide more information – via labeling – about how food is produced.
While Process Labeling has great appeal and potential utility, execution can be difficult for three reasons.
First, such labels require a “process” clearly defined by a standard fixed either by the government or a well-established, independent agency. The standards for organic farming set by the National Organic Program are the leading example of such a third-party standard. USDA’s systems of grading meat, poultry, butter and eggs, and requiring Country of Origin Labeling (“COOL”) are other examples of clearly defined process standards. Sellers, buyers, trade groups and industry associations have also established quality standards and guidelines against which Process Labeling claims can be assessed. However, it is hard, if not impossible, to find widely accepted, well-established definitions for some of the most popular process claims such as “cage-free,” “grass-fed,” “free range,” “naturally raised,” and many others.
Second, even with a defined standard, substantiating Process Labeling claims can be challenging, especially for large-scale operations with far-flung suppliers. Adequate substantiation requires supply chains operating under strict control, with rigorous oversight and continuous monitoring. The food producer must maintain strong and transparent supplier relationships and check in frequently to assure that the operation is running as agreed and without errors or gaps. Independent verification is helpful, and producers can obtain that kind of help from the USDA’s Agricultural Marketing Service, which provides a wide variety of independent verification services through its Process Verified Program (“PVP”), a voluntary, user-fee-funded program. The PVP uses highly trained auditors to conduct inspections, review processes and documentation and thereby assure that a producer is adhering to the standards supporting the process claim.
Third, Process Labeling can send inferential messages about health or well being that can be highly misleading without prominent disclaimers or other disclosures. The Federal Food, Drug, and Cosmetic Act (“FFDCA”) provides that a food is misbranded if its labeling is “false or misleading in any particular.” The FFDCA has long been interpreted as holding a producer strictly accountable for the claims made in labeling. This includes accountability for omissions, as the FFDCA empowers FDA to find a label misleading if it fails to reveal facts that are “material” in light of the representations that are made for the product.
GMOs are a case in point. A recent consumer survey concluded that an overwhelming majority of consumers worldwide think non-GMO foods are healthier than foods made with GMOs. However, FDA has found no scientific basis to require labeling because GMO foods are safe and not materially different from non-GMO foods. Now consider whether the following claims should appear right a