Food and Beverage News and Trends

This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.

• FDA is urged to require calorie disclosures by food delivery services. On April 1, the Center for Science in the Public Interest, the American Heart Association, the Consumer Federation of America and several other nonprofit groups called on the FDA to provide guidance that food delivery services like DoorDash, GrubHub and UberEats must provide calorie information to their customers for chains covered by the FDA menu labeling law. While chain restaurants subject to FDA menu labeling requirements must already provide this information to customers in online menus and in-store menu boards, many restaurant chains do not provide calorie information on third party delivery platforms. The groups argued that because of the dramatic increase in the use of delivery services in the COVID-19 era, the food delivery services should also be required to do so. “The nutrition labeling requirements are essential to allowing consumers to make informed choices about their diets and to providing incentives for industry to reformulate in a more healthy direction,” the groups wrote. According to the letter, since delivery services now play a significant role in the American food landscape, a calorie labeling requirement will provide important public health benefits.

• Bill aims to change regulatory and tax treatment of kombucha. On March 24, Senator Ron Wyden (D-OR) and Representative Earl Blumenauer (D-OR) reintroduced legislation in Congress that aims to update federal alcohol taxes and regulations on kombucha. Kombucha – one of the fastest growing beverage categories – is made from fermented tea, water, and a symbiotic culture of bacteria and yeast; it contains trace amounts of alcohol which can trigger federal excise taxes and regulations covering alcoholic beverages.  The Keeping our Manufacturers from Being Unfairly Taxed while Championing Health Act (KOMBUCHA) would eliminate those unintended burdens, increasing the applicable alcohol-by-volume limit from 0.5 percent to 1.25 percent. Kombucha would still have to meet certain alcohol labeling requirements as well as health and safety requirements applicable to nonalcoholic beverages.

• Case against Sanderson Farms is rejected on standing grounds. On March 31, the US Court of Appeals for the Ninth Circuit dismissed a case brought by two public interest groups against Sanderson Farms, finding that the groups lacked standing to sue. The groups had sought a court ruling against Sanderson’s claims that its chicken is “100% Natural” when it allegedly confines its birds in overcrowded conditions and uses antibiotics and other drugs to stave off illness among the chickens. A district court had ruled in 2019 that the groups lacked standing to bring the case. The groups had attempted to show that they had standing because they had to spend extra time and energy combating the allegedly misleading ads in 2016 and 2017. A three-court appeals panel, however, did not find those showings to be credible, and the appeals court agreed, dismissing the case for lack of standing to sue.

• Appeals court affirms denial of injunction against law on plant-based meat. On March 29, Turtle Island Foods SPC , the company that makes Tofurky meat-substitute products, lost a federal appeal in which it had sought to block the enforcement of a Missouri law making it a crime to misrepresent a plant-based product as a meat product. The US Court of Appeals for the Eighth Circuit ruled that the company had failed to show that the state law applied to its products or that it was at any risk if the law were to be enforced. The appeals court thus affirmed a lower court’s ruling denying a preliminary injunction against the law. While upholding the denial of an injunction, the appeals court did allow the case to proceed later to trial. The company, joined by the Good Food Institute in the lawsuit, had contended that fear of criminal prosecution under the law caused it to self-censor its product labels and marketing materials and thus ran afoul of the First Amendment.

• Court rejects challenge to an aspect of the USDA’s organic certification program. A federal district court on March 26 rejected a lawsuit that had been brought by the Center for Food Safety against the decision of the USDA to allow soil-less hydroponic farming operations to be certified as organic. The USDA had ruled that hydroponic operations qualified for exemption from the general requirement that certified organic crop producers must build soil fertility, which is not an attribute of hydroponic farms. The United States District Court for the Northern District of California rejected the challenge and ruled in the government's favor, stating that the USDA had “reasonably concluded the applicable statutory scheme does not exclude hydroponics from the organic program.” The judge noted that nothing in the Organic Foods Production Act specifically prohibits hydroponic operations from being certified.

• What are “processed” foods, really? In a March 30 article for the nonprofit American Council on Science and Health, Chuck Dinerstein, MD, notes that a new public-health study, summarizing hundreds of articles, concludes there is no clear definition of what a “processed food” actually is. He writes that processed foods have acquired a bad reputation, but there is no clear correlation between different types of processing and the resulting healthfulness of a food. “This categorization reflects an unsettled scientific debate,” Dinerstein wrote. “Should we consider food and diet in a reductionist way – as nutrients, or more holistically, as a synergism between all the bioactive compounds found in a “whole” food?” He added, “The difficulty is that these classifications do not reflect, in a systematic way, changes in a food’s inherent properties.”