Need Help Talking To Dad About Milk?

The UK’s Advertising Standards Authority (ASA) recently investigated advertising by Oatly for advertisements that allegedly overstated the environmental benefits of the popular oat-based beverage. Here’s an example:

The first TV ad, seen on January 16 2021, featured a man sneaking into his home and putting a bottle of milk in the fridge. He was interrupted by his son who said, “What have we here? Cow’s milk? Really?” Large, on-screen text stated “NEED HELP TALKING TO DAD ABOUT MILK?”. Smaller text at the bottom of the screen stated “Oatly generates 73% less CO2e vs. milk, calculated from grower to grocer. To verify see www.oatly.com/helpdad”.

The ASA found the “Need Help Talking to Dad About Milk” ad to be misleading not because the life cycle assessment conducted to support the claims was not sufficiently robust to support a benefit. Rather, the substantiation was limited to Oatly’s Barista Edition but the ad and the disclosure could reasonably be understood to apply to all Oatly products. Because of this gap, the ASA found the ads misleading.

What’s the takeaway? The ASA’s decision, which also covers four other ads, is worth a read by any food company considering how to substantiate environmental claims. There are valuable insights from a technical perspective, including detailed discussion of life cycle analyses for Oatly’s product as well as the dairy, meat, and transportation industries.

There is also a focus on less complex but equally important features for food marketers – such as the consumer understanding of what is included in references to the “meat industry” or the “dairy industry”. Because consumers could interpret “dairy and meat” more narrowly than how Oatly did, the ASA found the claim "Today, more than 25% of the world's greenhouse gases are generated by the food industry, and meat and dairy account for more than half of that" to be misleading.

Stepping back, the biggest issue with Oatly’s advertising wasn’t that the company didn’t have robust substantiation for some claims. It appears that they did. The claims reasonably conveyed didn’t match the limitations and definitions in their substantiation, though, and this wasn’t made clear to consumers.

On the latest episode of the Ad Law Access Podcast, Advertising and Marketing practice Christie Thompson discusses the key regulatory requirements (the FTC’s “Green Guides”) and practical tips for companies to consider when engaging in green marketing in the United States.

Listen on Apple, Spotify, Google Podcasts, SoundCloud or wherever you get your podcasts.

For more information on these and other topics, visit:

• Advertising and Privacy Law Resource Center
• Ad Law Access Blog
• Ad Law News and Views Newsletter
• Kelley Drye’s Advertising and Marketing Practice Page

The FTC Green Guides state that an environmental certification or seal of approval may imply a general environmental benefit claim when it does not specify the basis for the certification, either through the name or some other means. The Guides further advise marketers that they may prevent deception by accompanying the seal with “clear and prominent language that clearly conveys that the certification or seal refers only to specific and limited benefits.”

Although the Green Guides are primarily directed at marketers of environmental claims, the warning letters indicate that certifiers themselves may also be on the hook. In the warning letter directed to certifiers, FTC staff notes its concern that the seal at issue does not convey the basis for the certification and may be considered deceptive under Section 5 of the FTC Act. Moreover, although the certifiers’ websites provide information to marketers regarding their use of the logo, they do not instruct marketers to use qualifying language.

The warning letter directed to marketers further provides that the seal featured on the company’s website may deceptively convey that a product offers a general environmental benefit because it is not accompanied by clear and prominent qualifying language limiting the seal to a specific benefit or benefits. In some cases, even if consumers click on the seal for more information, the seal itself does not likely convey an effective hyperlink that leads to the necessary disclosures (FTC directly references its .Com Disclosures here).

Even though the FTC did not disclose which companies received the letters, the FTC’s action provides a few key insights for both certifiers and marketers of certifications and seals.

What certifiers can do:

• Create seals or logos that incorporate the basis for the certification directly into the seal or logo, so that consumers do not have to look further to understand the specific product attributes tested or certified
• Clearly convey to marketers that further qualifying language may be needed when it comes to their specific product.

• Make sure consumers will understand the basis for the certification when the seal is placed on the website, product, or packaging.
• If the basis for certification is not clear from the seal or logo itself, consider placing additional qualifying language in close proximity to better inform consumers of the specific and limited benefits for certification.
• Don’t assume consumers will simply click on a seal’s icon online for further explanation. Consumers may just view the icon as another graphic on the page.

The FTC’s complaint alleges that Engineered Plastics Systems, LLC (“EPS”) marketed its plastic lumber products – including picnic tables and benches – as made of “recycled plastic,” made “entirely of recycled plastic lumber,” or having an “all recycled plastic design.” The FTC alleges that while consumers would likely interpret the claims to mean that the products are made from all, or virtually all, recycled plastic, the products contained, on average, only about 72 percent recycled plastic. The products also contained some non-recycled plastic and a mineral component.

The proposed consent order with EPS prohibits the company from misrepresenting the recycled content or environmental benefit of any product or package. For any recycled-content claims, the company must substantiate the claims by demonstrating that the content of its product or package is composed of materials that have been recovered or otherwise diverted from the waste stream. The FTC’s consent order will remain effective for 20 years.

The FTC alleges that the claims were deceptive because Evolve contains (at most) 58% recycled plastic, while the recycled plastic in Trimax contains (on average) less than 12% post-consumer recycled content. FTC also alleges that the products are not “recyclable” because local recycling centers where the products are sold do not accept the products due to their non-plastic content and size and weight. Furthermore, the cost of shipping the products to the manufacturer under its take-back program generally exceeded the amount consumers were paid for returning the items.

The proposed consent order prohibits the company from misrepresenting the recycled content of its products, including the amount of post-consumer recycled content. The order also prohibits advertising the products as “recyclable” unless: (1) the entire item, excluding minor incidental components, can be collected through an established recycling program; and (2) recycling facilities are available to a substantial majority (i.e., more than 60%) of consumers or communities where the products are sold; otherwise, the advertising must clearly and prominently disclose the limited availability of recycling and the extent to which it is limited.

This is the first time the FTC has enforced its 60% substantial majority threshold for recycling claims. Marketers can be sure, however, that the FTC will continue to look closely at these kinds of claims.

The NAD’s decision involved many of the claims the FTC addressed in its Guides. For example, the NAD took issue with the advertiser’s “eco-friendly” claims. Quoting the FTC, the NAD noted that unqualified environmental claims are likely to convey far-reaching environmental benefits that an advertiser cannot support. Accordingly, the NAD recommended that the advertiser stop claiming that its products are “eco-friendly.”

The FTC has also warned advertisers not to overstate environmental or savings benefits. In the NAD case, the advertiser claimed that the use of its cookware could reduce energy costs. Although the advertiser presented evidence that its products could reduce energy use, the NAD found no evidence that the reductions would result in meaningful savings on energy bills. Therefore, the NAD recommended that the advertiser stop making its savings claims.

As companies become more familiar with the Green Guides and scrutinize their competitors’ claims, it’s likely that these types of challenges will increase. Accordingly, you should make sure you review the Green Guides and scrutinize your own claims first.

The Green Guides address the following types of claims: (a) general environmental benefit claims; (b) carbon offset claims; (c) certifications and seals of approval; (d) “compostable” claims; (e) “degradable” claims; (f) “free-of” claims; (g) “non-toxic” claims; (h) “ozone-safe” and “ozone-friendly” claims; (i) “recyclable” and “recyclable content” claims; (j) “refillable” claims; (k) “renewable energy” claims; (l) “renewable materials” claims; and (m) source reduction claims.

The Green Guides aren’t new regulations, but they describe the types of environmental claims the FTC may or may not find deceptive under Section 5 of the FTC Act. The FTC has brought several actions in recent years related to green claims, and indicated that they would continue to bring these types of actions. Accordingly, advertisers should carefully review the new Guides and ensure that their green claims comply with the FTC’s standards.

For a more detailed analysis of the Green Guides, please reference the Kelley Drye client advisory, and see the FTC video below.

Logitech incorporated into its products a widely-used silver-based additive manufactured by AgION Technologies Inc. that is registered with EPA as a product preservative. Products that incorporate such additives are allowed to claim protection against bacteria, mold and mildew that cause odors, staining, or deterioration of the product. Such products are not allowed to claim explicitly or to imply that the product offers protection to consumers against bacteria or other microbes.

In product labeling and marketing materials, Logitech had stated that the silver-based compound provided "protection to prevent the growth of a broad range of bacteria, mold and mildew" and "guards against growth of a broad range of bacteria." EPA policy contends that unqualified claims of antibacterial efficacy are potentially misleading to consumers if

they fail to make clear that the additive only serves to protect the product from bacterial deterioration and odors, and does not protect human health. An EPA official noted that “unverified public health claims can lead people to believe they are protected from disease-causing organisms when, in fact, they are not.” In settling the case, Logitech did not admit liability or that the claims violated FIFRA regulations. After being contacted by EPA in 2008, Logitech stopped making the antimicrobial claims for their products and revised their product packaging.

Products that kill or repel bacteria or germs or claim to do so are considered pesticides and must be registered with EPA before their sale or distribution. Products that incorporate additives, such as the silver-based compounds in the Logitech case, do not have to be registered with EPA so long as the additive is registered and claims are limited only to protection of the product itself. In registering such additives, EPA does not require submission of data demonstrating the antimicrobial efficacy of the compound. In contrast, products that make "public health" claims must submit extensive data demonstrating efficacy against specific bacteria, viruses, or other microbes. Products may only bear claims that are consistent with the EPA-approved label for the product or antimicrobial additive.

Given EPA's continued enforcement in this area, companies should consider carefully the types of antimicrobial marketing and labeling claims that are made for products that incorporate additives intended to minimize bacterial odors and deterioration rather than to protect users from disease-causing microorganisms.

To bear the USDA’s new label, products must:

• Be a commercial or industrial product that is composed wholly or significantly of biological ingredients (e.g., renewable plant, animal, marine or forestry materials); and
• Meet minimum biobased content standards.
  • The USDA has already determined the minimum biobased content for some categories of products that are eligible for the federal preferred procurement program. If an entity is seeking label approval for a product that falls within a category of products for which the USDA has created minimum content standards, the product must meet the minimum content requirements for the specific product category found in 7 C.F.R. Part 2902, Subpart B. Product categories for which the USDA has already created minimum content standards include bedding, linens, disposable cutlery and containers, fertilizer, hand cleaners and sanitizers, lip care products, cleaning products, and topical pain relief products.
  • If a product does not fall within a USDA BioPreferred Products’ category, the product must contain at least 25 percent biobased material.

The rule also sets forth application procedures, information regarding how the USDA’s label may be used and how it must be displayed (e.g., the label may be used to advertise certified products in catalogs, on websites, and other promotional material; general statements describing a biobased product may describe it as “USDA Certified Biobased Product/Package/Product & Package”; the label must stand alone and not be incorporated into any other certification label or logo design), and penalties for violations of the final rule.

An example of the USDA’s new label is available here on the USDA’s BioPreferred program website.

A consumer recently filed a class action lawsuit against Fiji Water Company, alleging that Fiji falsely claims its bottled water is “carbon negative.” In addition, Fiji advertised: “we will continue to offset 120% of our emissions. That means that we are not only mitigating our environmental impact but also making up for a little bit of someone else’s.” The plaintiff alleges that consumers understand Fiji’s claims to mean that Fiji’s current operations remove more carbon from the atmosphere than they release into it. According the complaint, though, this is not true. Instead, Fiji uses a “discredited” accounting method called “forward crediting.”

This week, FTC announced a settlement with Tested Green over the company’s environmental certification program. According to the FTC, Tested Green advertised and sold environmental certifications while claiming to be the “nation’s leading certification program with over 45,000 certifications in the United States.” The FTC alleged, however, that Tested Green never tested any of the companies it provided with environmental certifications, and would “certify” anyone willing pay a certification fee. The agency charged that the company violated the FTC Act by providing the means to deceive consumers.

There has been an increased focus on green claims in light of the FTC’s announcement last year. Companies should carefully examine their claims to ensure that they are aligned with the FTC’s guidance and that they do not overstate potential environmental benefits.

The proposed revisions update the existing Guides with respect to claims such as "degradable," "compostable," and "recyclable," and they propose new guidance for claims not currently addressed by the existing Guides. Popular recent environmental claims that receive specific guidance for the first time include "renewable" and "carbon offsets."

The Commission declined to propose definitions or specific guidance for other environmentally-friendly terms such as "sustainable," "natural," "organic," "life cycle assessment," and "biobased." The FTC's rationale for not giving these terms specific treatment was based in large part on lack of consumer perception data, along with deference to sister agencies' existing standards and definitions for these terms.

Click here for a summary of the FTC's changes to the existing Green Guides and its proposed revisions.

The article, “Using ‘Green’ Marketing Claims? Make Them Clear,” discusses the Green Guides and provides helpful guidance for marketers. When it comes to promoting green products and their environmental benefits, the key is to make claims that are crystal clear.

The FTC is expected to issue revisions to the Green Guides any day, so marketers should also be on the lookout for updates that could affect the use of "biodegradable," "carbon neutral," and "recyclable" claims, carbon offsets, and third-party certifications.

From Paris to Peoria, companies should carefully consider the messages they could be communicating when touting environmental attributes of their products. Yesterday the International Chamber of Commerce ("ICC") announced its Framework for Responsible Environmental Marketing Communications -- guidelines for international marketers when making green marketing claims. The framework includes a checklist that marketers can use when making green claims and a chart with cross references to the Consolidated ICC Code of Advertising and Marketing Communications, which sets forth general principles governing all marketing communications. The ICC is the international association that coordinates and promotes self-regulation of advertising. Countries particpate through local chapters like the U.S. Council for International Business ("USCIB").

In the United States, the Federal Trade Commission has published Guides for the Use of Environmental Marketing Claims ("Green Guides") and is currently reviewing the Green Guides for possible modification. For more information, check out our recent article, Going Green Without Giving Up Your Greenbacks.