Is the Natural Products Industry Ready to be Naked? And Regulated?

I just returned from two days at one of the largest “green” product conventions in the United States – the Natural Products Expo East. 20,000 people attended the convention, where they showed, tested, tasted, and put in orders for the latest in “natural” foods, personal care products, household cleaners, pet food, and herbal supplements.

As I walked the football field long floor of the Boston convention center, the booths announced products that claimed to be:

  • All Natural
  • Organic
  • Green
  • Sustainable
  • Humane
  • Fair Trade
  • Gluten free

  • Kosher
  • Dairy free
  • Vegan
  • Certified Local
  • Bird-friendly
  • Non-GMO
  • Fragrance free
  • No hormones
  • No antibiotics
  • Pure
  • Probiotic
  • BPA-free
  • Phthalate-free
  • Chemical free
  • Bio-based
  • Plant-based
  • High in Antioxidants

And more…

Product packages proudly displayed a growing list of environmental and health certifications. Ecolabel Index reports that there are now over 350 such eco-labels on the market. And I must have seen half of them.

These kinds of environmental claims are not just coming from the small “green” firms that attended the Natural Products Expo. Datamonitor reported in September that 1,110 consumer packaged goods launched this year carried some kind of environmental claim. And TerraChoice reported that 9 percent of advertisements in mainstream magazines last year contained green messages.

These environmental claims, which until recently have been largely unregulated, came under new scrutiny just days before I arrived in Boston, as the Federal Trade Commission issued new draft guidelines for regulation of green marketing. The FTC rules, affectionately known as the “Green Guides,” have not been updated since 1998.

The new 200 page FTC report – now open for public comment states that companies should refrain from environmental claims that may confuse or deceive consumers, in particular claims that are overly general such as terms like “environmentally friendly” or “eco-friendly” which are “nearly impossible to substantiate.”

The FTC is asking that firms qualify, specify, and back-up their claims with “reliable scientific evidence.” They want companies to move away from using “unqualified certifications or seals of approval” in their marketing. In particular, the FTC is proposing clearer guidelines for the use of phrases such as: “free of”, “recyclable,” “degradable,” “compostable,” and “renewable” in marketing materials. The FTC may also require firms to provide transparency into product claims, and disclose if they have any financial connections to a certifying agency.

There are some surprising omissions in the proposed guidelines. For instance, there is no proposed regulation of the words “sustainable,” “green,” or “natural.” These words were some of the most frequently used terms at the Natural Products Expo. And yet the FTC argues that terms like “sustainable” are so meaningless to consumers to begin with that they aren’t confused into thinking products are environmentally sound when they see “sustainable” in marketing materials. I honestly can’t follow this logic. And after reviewing the FTC’s consumer survey, it is not clear where their position comes from.

Despite these omissions, the industry seems to agree in principle with the spirit of the FTC guidelines. I heard company after company complain that “greenwash” products and unethical manufacturers were overstating their environmental performance, and thereby confusing consumers and hurting the entire industry.

So will the Natural Products Expo be different next year? Will these companies have to change their booths, their packaging, and their marketing materials?

Advertising Age announced even before the FTC document was released that the new Green Guides “could render most of the more than 300 environmental seals of approval now in currency on packaging and products largely useless and possibly in violation of FTC standards.”

I don’t agree with AdAge. But I think the FTC’s actions indicate that the government will be demanding much more transparency and scientific verification from firms in the coming years. And they will be working to stop the worst forms of green marketing that can be misleading or deceptive.

Ultimately, I think this will help the natural products industry. Transparency, and a level playing field in what firms can and cannot say, should help the best firms and products win in the marketplace.

The government can play a critical role in policing the worst abuses of green marketing. A more regulated industry will help create an environment for sustained growth. And a more transparent industry will ultimately benefit consumers and the environment.

But what do you think? Do you believe the environmental and health claims you read on product packaging? Do you think green marketing should be more tightly regulated? Do you think firms should have to be more transparent about their product ingredients, supply chains, etc.? Let us know!

About Dara O'Rourke

Associate Professor at UC Berkeley and Co-Founder of GoodGuide.
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4 Responses to Is the Natural Products Industry Ready to be Naked? And Regulated?

  1. thanks for the post

  2. Lori says:

    I place a much higher value on transparency than on regulation. Regulation of green marketing should perhaps start with precise definitions of terms and then perhaps move on to disclosure requirements. Public education (including of course GoodGuide) should focus on implications, inferences and relative ‘strength’ of different claims, e.g. ‘recycled is a stronger claim than recyclable.’ Transparency is probably better served by deep disclosure than third-party certifications. If the raw data are in the public domain, then anyone can audit them. The MetaCurrency Project has <a href="http://www.metacurrency.org/content/open-data">some rather interesting ideas</a> along those lines. One possible role for ‘social entrepreneurship’ might be creation of alternative suppliers which don’t treat supply chains as a proprietary trade secret, if nothing else, as experiments in transparency.

  3. Thanks for good stuff

  4. Barbara Saunders says:

    I think the messaging literacy problem is several layers deep. We don’t know if a product labeled "gluten-free" is actually free of gluten. For many people, though, avoiding gluten is also a response to a word-of-mouth marketing message. In many cases, the decision to do so is not based on either scientific knowledge about gluten sensitivity or specific knowledge of that individual’s problem with gluten.

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