Yucatan Foods Sued Over its Alleged ‘Un’ Holy Guacamole

Contributed by Elizabeth Boggia

With the start of 2017 upon us, many people are setting New Year’s resolutions and aspirations to eat healthier. For companies seeking to sell their products to these newly health-conscious consumers, however, exactly how companies can advertise and label their products remains unclear. Under the Food, Drug, & Cosmetic Act (“FDCA”), the Food and Drug Administration (“FDA”) considers food to be “misbranded” if its labeling is false or misleading in any particular, or if it does not contain certain information on its label. 21 U.S.C. § 343 (a). Under California law, a food that is “misbranded” cannot legally be manufactured, advertised, distributed, sold or possessed. Cal. Health & Safety § 110760.

Importantly though, the FDA has yet to define the term “natural,” which many companies like to label their products with to attract the health-conscious customer. The FDA has generally not objected to the use of the term “natural” if the food does not contain added color, artificial flavors, or synthetic substances. The FDA requested comments from the public on the use of the term “natural” on food labeling, with a comment period that closed in May of 2016, but has yet to issue any definitive guidance. Not surprisingly, this confusion over the term “all natural” has led to litigation. Furthermore, when combined with the use of other terms, such as “spices” (defined by the FDA as any aromatic vegetable substance in the whole, broken or ground form, except for those substances which have been traditionally regarded as foods, such as onions, garlic, and celery, and whose significant function in food is seasoning rather than nutritional value, 21 C.F.R. § 101.22)  this creates a perfect storm.

For example, just this month a Florida consumer filed a proposed class action in a California State Court against guacamole producer Yucatan Foods LP (“Yucatan”), for allegedly deceiving customers by representing on its packaging that the guacamole was “all natural” and in some varieties, contained “95% avocado; 5% spices.” Instead, claims the consumer, the guacamole allegedly did not contain all natural ingredients, and contained ingredients that were neither avocadoes nor spices.

In his Complaint, plaintiff alleges that in 2014, he purchased one package of Yucatan Authentic Guacamole and one package of Yucatan Mild Guacamole, for what usually retails for $5.49 per package in Florida.  Three varieties of Yucatan’s guacamole, including the two purchased by plaintiff, assert they contain 95 percent avocado and 5 percent spices. Yucatan also sells nine varieties labeled as “all natural.”  Plaintiff claims, though, that the 95 percent avocado and 5 percent spices varieties contain synthetic ingredients and evaporated cane juice, and the “all natural” products contain ingredients including Ascorbic Acid, Citric Acid, and Xanathan Gum.

Plaintiff further alleges that evaporated cane juice is a sugar and thus not properly characterized as “spices”, and Ascorbic Acid, Citric Acid, and Xanathan Gum should not be considered “all natural” ingredients. Specifically, plaintiff points out that other FDA regulations, including 21 C.F.R. § 1101.22(a)(2), refer to “spice” and “sugar” separately,  and thus, argued that sugar is not a spice and cannot be characterized as such. Plaintiff further argues that Ascorbic Acid, Citric Acid, and Xanathan Gum are highly processed and thus cannot be described as “all natural” ingredients.

Plaintiff asserts that by using the branding “all natural” and “95% avocado; 5% spices” on both its product labeling and the company website, defendant knew and intended that consumers would pay a premium over comparable guacamoles that do not contain those representations. Plaintiff contends that Yucatan essentially stated that their guacamole products were superior to and more nutritious than competing guacamoles that do not assert to be “all natural” and have “95% avocado; 5% spices.” Plaintiff alleges that he paid more money for the guacamole than he would have paid for other similar guacamoles that were not labeled as containing only avocados and spices and were all natural.

To prevail, Yucatan will have to demonstrate that its other listed ingredients qualify as “all natural” and “spices.” Hopefully, after the FDA issues its final guidance regarding the use of the term “natural,” companies will be able to better navigate the permitted use of the terms “all natural” on its packaging. Perhaps later down the line, the FDA will define the compound term “all natural” as well.  We will continue to monitor updates to this case as well as the FDA’s approach toward defining the term “natural.”

Miller v. Yucatan Foods LP et al., case number BC645421, in the Superior Court of the state of California, County of Los Angeles