As the retail shelves become more and more crowded, the differences between beverages and liquid dietary supplements have become less clear.
Companies looking to compete in the beverage and supplement industries have blurred the lines separating the categories, creating many similarities in packaging, ingredients and claims. While the Food and Drug Administration (FDA) issued a Draft Guidance for Industry in December 2009 to address concerns over this movement towards a merging of classifications, third parties have been vocal in the need for more distinctive guidelines. United States Senators and Congressmen publicly called on the FDA for more clarity and plaintiffs’ lawyers have been filing class action lawsuits, alleging false and deceptive advertising over alleged mischaracterization of products. In an effort to clear up the confusion, the FDA kicked off 2014 by issuing a long-awaited revised and final Guidance for Industry concerning the factors distinguishing beverages and supplements. So, did the Final Guidance clear up the somewhat murky waters? Call it a surface cleaning: while the Final Guidance does provide some more clarity regarding the way the FDA is likely to interpret the representations of products as supplements or beverages, it stops short of providing concrete distinctions between the classes of products.
The FDA did not substantially change its position regarding the distinctions between beverages and liquid dietary supplements from the Draft Guidance to the Final Guidance. The plea from U.S. Senators and Congressmen for a more “bright-line” distinction between beverages and liquid supplements was also one of the biggest concerns for industry companies. The establishment of specific thresholds for the volume of liquid products or servings sizes would have a major impact on industry. However, other than the possibility that the use of “beverage,” “drink,” or other names traditionally associated with conventional foods and beverages may cause a product to be “represented as a conventional food,” it still seems that no one factor is likely to make the FDA consider a product labeled as a dietary supplement to be a beverage. The evaluation of whether the characterization of a product as a supplement is appropriate is still going to be made on a case-by-case basis. The Final Guidance emphasizes some of the factors the FDA previously identified regarding packaging, serving size and recommendations for use, while providing a few more examples of situations which may cause a product to be deemed a beverage. The Final Guidance also sheds some light on some additional factors that companies must be aware of when marketing and promoting these types of products.
Since it issued the Draft Guidance in 2009, the FDA has had occasion to send a handful of warning letters to companies for labeling products as supplements when, in its opinion, the products were really being represented as beverages. Central to the FDA’s assertions in each of those letters was that the company referenced the product in labeling or marketing as a “drink” or “beverage.” The Final Guidance reinforces the notion that this factor, among all others listed, may be the most influential on the FDA’s determination of whether a product is being “represented as a conventional food.” In fact, while the FDA indicated that in most circumstances a combination of factors would determine whether a product is represented as a conventional food, marketers should be aware that the FDA cited use of a product name that is indicative of a beverage as one of the single factors that could be determinative. In addition to “beverage” and “drink,” the FDA identified other examples such as “bottled water,” “orange juice,” “iced tea” and “coffee” as terms that, when used in a product’s name, are indicative of a conventional food or beverage. Other terms that have been associated with both beverage products and supplements, such as regular teas, will be evaluated with other factors to determine the overall context. The take away is that companies must be consistent in their labeling, marketing and advertising. If a company intends to sell a product as a dietary supplement, it must reference the product as a supplement in all labeling, advertising and marketing. It is not an “energy drink” or “after-dinner beverage,” it is a supplement.
LABELING AND ADVERTISING
The FDA also reiterated its longstanding position that it may consider all statements made about a product to establish the intended use of a product and how it is represented. This means claims and graphics on product labels, labeling, marketing, and advertising, including Web sites and Social Media outlets. One of the examples cited was the use of graphics traditionally associated with conventional foods — so a picture of a liquid being poured onto a salad could represent the product as a salad dressing. One insight provided by the FDA that was not in the previous Draft Guidance was that statements like “refresh” or “rehydrate” used on the labeling of a dietary supplement could cause the product to be deemed “represented as a conventional food” because refreshing and rehydrating are uses associated with beverages. Again, while the isolated use of terms like “rehydrate” or “refresh” is not likely to cause a product to be deemed a supplement, such use is a factor that, combined with others, could cause the product to be viewed as “represented as a conventional food.”
One section of the Final Guidance that adds some new insights is the section identifying certain marketing practices that might demonstrate that a product is really being represented as a conventional food. Favorable comparisons to a category of beverages, like sodas or energy drinks, is one practice that may weigh in favor of the FDA treating a product as a beverage product. The use of metatags, which has been often used by the FDA as evidence of intent to sell a product for drug purposes, could be a factor indicating representation as a beverage if the metatags used are terms associated with beverages. Paying to have a product displayed in the beverage section of retail stores is another practice that might point towards a product being represented as a conventional food. Additionally, representations in government filings like SEC documents or patent and trademark filings may be used by the FDA as additional evidence that a product is really intended to be a beverage. (References in a trademark filing to a product as a “bottled water” and filing in the beverage classification were identified as additional evidence of intent to sell a product as a beverage in a warning letter to Lithia Mineral Water in 2012, one of the few warning letters the FDA has issued in this area.) These various examples make it clear that the FDA will be viewing all aspects of the business when looking to determine whether a product is represented as a conventional food.
While most of the Final Guidance focuses on the FDA’s review of supplement products to see whether they are being represented as conventional foods, there is one aspect of the Final Guidance to which beverage companies, in particular, should pay close attention and that is the section on structure-function claims. While structure-function statements are specifically provided for dietary supplements pursuant to Section 6 of the Dietary Supplement Health and Education Act (“DSHEA”) , the FDA’s position with respect to conventional food and beverages is that structure-function statements must relate to aroma, taste or nutritive value. This position regarding structure-function statements for conventional food and beverages is not new; however, the FDA, historically, has rarely made the distinction and taken action against a company because a structure-function statement was not related to aroma, taste or nutritive value. But the reiteration of the FDA’s stance on structure-function claims for conventional foods and beverages may signal a potential increase in the FDA’s scrutiny of such claims. Those companies marketing products as beverages or looking to switch from supplement to beverage classification should pay close attention. If the FDA does start enforcing this distinction over structure-function claims allowed for beverages as opposed to supplements, it could substantially narrow the range of claims available to beverage companies.
At the end of the day, the FDA will still be reviewing the characterization of products on a case-by-case basis. If the intent is to sell a product as a dietary supplement, a company may not market or otherwise promote the product in ways which would suggest it is a beverage or conventional food instead of a dietary supplement. When the previous Draft Guidance was issued in 2009, there was much anticipation as to whether the FDA would substantially increase its regulatory action in this area. Yet, the FDA took little action for almost two years, and then issued a half-dozen or so letters over the last two years. Now that the FDA has issued its Final Guidance, will action come more swiftly and more frequently, in step with the principles it set forth in that guidance? Time will tell, but the key message for companies to take away from the Final Guidance is that whatever category of products a company decides to sell its product under, companies must be consistent in the messaging or run the risk of the FDA making its own determination.
Justin J. Prochnow is an attorney and Shareholder in the Denver office of the international law firm of Greenberg Traurig LLP. His practice concentrates on legal issues affecting the food & beverage, dietary supplement and cosmetic industries.
He can be reached at (303) 572-6562 or firstname.lastname@example.org and he can be followed on Twitter at @LawguyJP.
This article is issued for informational purposes only and is not intended to be construed or used
as general legal advice. The opinions expressed are those of the author exclusively.