Takeaways for food and beverage advertisers

When we talk about advertising claims (e.g., on product labels, websites, social, etc.), we stress that "claims must be truthful, not misleading, and substantiated." The requirements to be "truthful and not misleading" seem fairly straightforward (but note they are not always so!). The mention of substantiation, however, can lead to clients scratching their heads about how exactly to do that. In this advisory, we introduce you to general principles of claims substantiation to help you understand what may be required to support the claims you make in your advertising.

Section 5 of the Federal Trade Commission Act ("FTCA") prohibits "unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce." 15 U.S.C. § 45(a)(1). For food and beverage companies,[1] section 12 of the FTCA further prohibits dissemination of any false advertisement for the purpose of inducing (or which is likely to induce) directly or indirectly the purchase of food (which includes beverages).[2] 15 U.S.C. § 52(a). Neither of these provisions states anything explicitly about how to substantiate claims.

The Federal Trade Commission ("FTC") issued a policy statement in 1984 regarding its general position on advertising substantiation matters; that policy is relied on to this day as a basic guidepost to avoiding deception. Since then, the FTC has issued additional guidance on various types of claims, including a recent, updated, guidance document on health-related claims which addresses substantiation standards and in fact goes a bit beyond how some interpret available legal precedent—a good reminder that FTC guidance is just that, guidance, and not law or regulation.

The first step on any claim substantiation journey is to determine what the words (together with any pictures, demonstrations, or other context) are actually telling the consumer—advertisers must support both express and implied claims conveyed by the advertising. The key is not what the advertiser intends the claim or claims to mean, but rather how the consumer understands them.

Once the advertiser feels clear about the claim it is actually making, the next step is to determine what level of support is required, whether the support in hand is a "good fit" for the claim, and what additional testing or other substantiation may be necessary. By way of one broad example, a claim just about one ingredient in a multi-ingredient product can theoretically be supported by ingredient testing. Such claims, however, must be specific only to the ingredient, and cannot extrapolate from the ingredient to product efficacy generally without testing the product itself. Further, if relying on ingredient testing for even a narrow claim (whether the testing was commissioned by the advertiser or it seeks to rely on early studies by third parties), it must be the same ingredient, in the same formulation/strength, utilizing the same delivery method.

When the Advertisement Expressly States or Implies a Particular Level of Substantiation

Often, the claim itself states or implies a certain level of support—helping guide the substantiation journey. For example, an advertisement may claim a product (or ingredient) is "clinically proven," "clinically shown," or that "tests show" a certain result. Where tests are expressly or impliedly alluded to (these are generally called "establishment claims"), the advertiser must have at least the level of substantiation advertised (e.g., clinical studies to support a "clinically proven" claim). Further, it is not enough to simply call a study or studies "clinical," they must be conducted in a manner that constitutes "competent and reliable" evidence for the claims. The FTC has been clear that what constitutes "competent and reliable" depends upon the claim itself and the relevant science generally accepted in the field for like claims.

It is important to remember that even without expressly stating the words "proven to" or "clinically shown," an advertisement may imply a high level of substantiation (e.g., an advertisement that shows a doctor providing infant formula to a patient) or it may imply that the advertiser has a particular type of support (e.g., "provides longer lasting energy"—arguably implying that the advertiser has done head to head testing against the market). In these cases, the advertiser must possess the amount and type of substantiation the advertisement actually communicates to consumers.

When the Advertisement Is Silent on Substantiation

An oft-cited FTC case from 1972 held that absent a specific substantiation standard expressly or impliedly conveyed in an advertisement, advertisers must possess a "reasonable basis" for claims disseminated in advertising. The case established criteria (referred to as the "Pfizer Factors") followed today for determining what a "reasonable basis" is when it comes to substantiation:

What constitutes a "reasonable basis" depends on several factors, including the type of product, the type of claim, the consumer benefit from a truthful claim, the ease of developing substantiation for the claim, the consequences of a false claim, and the amount of substantiation experts in the field believe is reasonable.

Pfizer Inc., 81 F.T.C. 23 (1972)

Not all performance or efficacy claims require placebo controlled, randomized, clinical trials but they do require a level and quality of testing sufficient to support the claim. If the claim is sensory or consumer driven (e.g., "better tasting," or "more people prefer X to Y"), the testing must match. An advertiser is responsible for substantiating all reasonable interpretations of the claims it makes—not just the meaning(s) the advertiser intends to convey. If an advertiser is not able to substantiate all reasonable interpretations of its claim(s), such claim(s) should be revised. In addition, the advertiser must possess this substantiation prior to making the claim and the substantiation must continue to support the claim for the duration it is made. For example, consumer preference claims must be updated as product formulas or styles change and advertisers must regularly review and update, as may necessary, their "#1 selling" or "#1 recommended" claims. And it bears repeating that the support must match the claim. Consumer opinion cannot substitute for product efficacy—meaning if the claim is such that it can be supported by objective evidence (e.g., "better gut absorption" or "cleans teeth more thoroughly"), then consumer opinion about how well the product works will not substitute for appropriate testing.

When the Claims Are Health-Related

The FTC has been clear that health-related claims are subject to a higher standard for substantiation than non-health-related claims. The FTC's December 2022 Health Products Compliance Guide is important reading for anyone in the space, and clearly articulates the FTC's updated expectations on substantiation for these types of claims, including an emphasis on use of randomized, controlled human clinical trials ("RCTs"). The FTC would like to see two RCTs to support a health claim, but not all courts or regulatory bodies agree that two are required (but that is for another day). If you make (or want to make) health-related claims, we recommend you review the FTC's guidance linked above.

Takeaways for Food & Beverage Companies

As a practical matter, what does all this mean for food and beverage companies? When coming up with potential claims for advertising (e.g., product labels, websites, social posts, etc.) and thinking about substantiating those claims, keep in mind the following:

• Step back and consider, from a consumer's perspective, what claims you are making.
• Identify all express and implied claims considering the overall net impression of the advertisement (including words, images, colors, demonstrations, layout, etc.).
• Does the advertising expressly identify a level of substantiation for the claim(s)?
• Does the advertising imply a particular level of substantiation for the claim(s)?
• Is the claim a health-related claim? If so, what substantiation do you have/need?
• Does the substantiation you have support the specific claim(s) being made?
• Are the product/service claims objective or subjective?
  • If objective, you will need adequate, objective substantiation.
  • If subjective, meaning "opinion based," do you have sufficient evidence by way of appropriate consumer studies? (Note, it can't be one person's opinion or based merely on consumer reviews.)
• Is independent support necessary or will in-house testing be sufficient?
• Are there industry standards for testing the type of claim—or are you relying on proprietary testing?
• If there is an industry standard, what it the rationale for using a different methodology?

Your competitors, regulators and the plaintiff's bar will review your claims—and substantiation—closely. So should you.

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