Carst and Walker

US: Nutella lawsuit highlights marketing risks

With class action lawsuits now possible in SA under the Consumer Protection Act, there are some insights to be learned from Ferrero USA’s recent legal tribulations – in late April, it announced it had settled a class action suit over its marketing of Nutella – the hazelnut spread with skim milk and “a hint of cocoa”. Under the terms of the settlement, Ferrero established a $3 million fund for consumers and agreed to change its labeling and advertising practices for the product. The reasons Ferrero agreed to this settlement present a case study in the current risks and pitfalls in marketing processed foods.

Ferrero’s marketing and labeling statements for Nutella all were truthful. Nevertheless, the company was forced to defend a lawsuit accusing it of deceptively marketing Nutella as a “healthy” and “nutritious” food. On the surface, this claim may look frivolous, since most people would not view a sweet, chocolaty spread as “healthy.” Digging deeper, however, Ferrero had reason to be concerned that a jury, along with the general public, might view its labeling practices as deceptive and misleading.

The overall theme of Nutella’s marketing presented the spread as a relatively healthy product, like peanut butter. The front label of Nutella identified it as “hazelnut spread with skim milk & cocoa”; the side panel declared it is “made with over 100 hazelnuts per jar”; and the back label stated it is “an example of a tasty yet balanced breakfast.”

Television ads touted Nutella is made with “simple quality ingredients like hazelnuts, skim milk and a hint of cocoa” while the words “no artificial colors or preservatives” appeared on the screen. In addition, Nutella’s Internet website and print advertising referenced the product’s “wholesome” and “high-quality ingredients” alongside statements like, “Use Nutella spread on all kinds of healthy food – like multigrain toast – to add a touch of flavor and give your kids a tasty breakfast you can feel good about.”

According to its nutrition facts label, however, Nutella contains 10.9g of added sugar per serving (close to 55 percent of the overall product) and 2g of saturated fat (from palm oil which creates a nice, spreadable texture). Not surprisingly, the high sugar and fat content of Nutella was not a feature of its branding or marketing message.

The contrast between that message and the actual product resulted in the lawsuit, in which a mother claimed that she “was shocked to learn” that Nutella “was the next best thing to a candy bar.” The crux of her claim was that she was “duped” by Nutella’s “deceptive and misleading” marketing practices into buying a product she otherwise would not have purchased….. Read the full article

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