Kashi class action settles

May 28, 2014 by

CerealThe Kellogg Company, maker of some of the country’s most familiar breakfast cereals, has agreed to drop the terms “all natural” and “nothing artificial” from some products in its Kashi line as part of a settlement agreement ending a class-action lawsuit.

Plaintiffs in the lawsuit, filed in 2011 in California, said the company used those terms on Kashi products that contained ingredients like pyridoxine hydrochloride, calcium pantothenate and soy oil processed using hexane, a component of gasoline.

Such ingredients occur naturally — wheat germ and flaxseed are sources of pyridoxine hydrochloride, for example — but food companies, as well as makers of vitamins, often use synthetic versions to control costs and ensure consistent supplies.

“We stand behind our advertising and labeling practices,” Kris Charles, a Kellogg spokeswoman, said in a statement. “We will comply with the terms of the settlement agreement by the end of the year and will continue to ensure our foods meet our high quality and nutrition standards while delivering the great taste people expect.”

The settlement, which includes a $5 million payment, comes at a time when food companies are facing a number of lawsuits over ingredients and labeling.

Consumers have sued Chobani and other companies, saying that their use of the phrase “evaporated cane juice” to describe a sweetener is simply an attempt to hide sugar. Kellogg also settled a similar lawsuit over its Bear Naked brand for $325,000.

The Food and Drug Administration has not developed a definition for the use of the word “natural” on food products. “However,” the F.D.A. says on its website, “the agency has not objected to the use of the term if the food does not contain added color, artificial flavors or synthetic substances.”

Kashi, once a darling of shoppers favoring organic and natural foods, has hit turbulence in recent years. Some consumers attacked it on social media in 2012 after learning that Kellogg was a big contributor to an effort that helped defeat Propostion 37, a California ballot initiative that would have required the labeling of products containing genetically engineered ingredients.

Sales of the brand had started slipping even before that controversy, and last fall, John A. Bryant, chief executive of Kellogg, told investors that Kashi had become too mainstream.

In an earnings call this month, Mr. Bryant said distribution of Kashi through grocery stores had shrunk. “There have been some retailers that are more mainstream in orientation that probably took on a bit more of Kashi than they could sustain in that sort of outlet,” he said on the call.

He added that Kashi sales through retailers like natural foods stores were doing well. And despite Kellogg’s opposition to labeling that would indicate whether ingredients included genetically modified organisms, the company has paid to have some Kashi products certified by the Non-G.M.O. Project.

Among the Kashi products listed in the original lawsuit were some of its cereal and granola bars, waffles and shakes, and some GoLean items. Kellogg would not disclose which items would lose the “all natural” or “nothing artificial” terms.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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