As the natural and organic market continues to gain
strength, with sales topping $81 billion in 2012, businesses are striving to
meet consumer demand. However, for
businesses that are entering this sector in hopes of capturing some of the market
share, understanding the difference between labeling your product as
"organic" and "natural" is essential to ensure you don't
run afoul of federal regulators.
All agriculture products sold, labeled or represented as
organic need to be in compliance with the Organic Foods Production Act of 1990
(the "Act"). Pursuant to the
regulations promulgated by the Act, organic growers and handlers (including
food processors and distributors) must be certified by state or private
agencies/organizations under the uniform standards developed by the USDA;
however, farmers and handlers who sell less than $5,000 of organic products per
year, and retail food establishments that sell organic products but do not
process them, are exempt from certification.
In order to label your product as "organic" at least 95% of
the contents need to be certified organic.
Products labeled as "made with organic" ingredients must
contain at least 70% organically produced ingredients. Obviously, if you label your product
"100% organic" it must be true.
The USDA organic seal may be used only on products that are "100%
organic" or "organic".
Fines of up to $11,000 per violation can be levied against any person
who knowingly sells or labels a product as organic that is not produced in
accordance with the regulations.
Now labeling your product as"natural" is a whole
different story. Up to this point the
FDA has refused to define the term "natural", but has noted on an
informal statement support for the policy that "nothing artificial or synthetic
is included in, or has been added to, the product that would not be expected to
be there." 58 Fed. Reg. 2302, 2407
(Jan. 6, 1993). The USDA, however, has
defined "natural" (when applied to meat, poultry or eggs) as a
product containing no artificial ingredient or added color and is only
minimally processed. "Minimally
processed" means that the product was processed in a manner that does not
fundamentally alter the product.
Although there has been much litigation concerning natural labeling,
there is no clear standard under the FDA regulations.
If you need assistance navigating or complying with the laws
affecting your food or beverage businesses, please feel free to contact our
attorneys at Morsel Law.
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