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April 29, 2016

“Natural” Products on the Defensive

Natural

Organic

Non-toxic

Healthy

When can you use words like these to advertise your product, and when does it cross the line? This is the issue behind a class-action lawsuit against the Honest Company. At issue is whether claims like “natural”, “non-toxic”, “plant-based”, and “no harsh chemicals” violate New York statutes against deceptive or misleading advertising. Unfortunately, the problem doesn’t have a clear solution.

Natural marketing: Why should you care?

If you’re an insurance agent or an attorney, you probably don’t care. However, if you’re marketing anything in the arena of natural health or even conventional healthcare, you might want to pay attention. If you’re in the business of nutritional supplements, nutraceuticals, or health & beauty products, this case is very important to you.

The issue behind “natural”

When you buy cereal in the grocery store labelled “100% organic”, you can safely assume that all of the ingredients (except for salt and water) are certified organic. Anything labelled “organic” has 95% of the ingredients certified organic. But the USDA does not define or regulate the term “organic” when it comes to cosmetics, lotions, soaps, and other types of personal care products. When it comes to “natural” (and similar claims), the waters get even muddier.

The “Reasonable Person” Test

The benchmark in virtually all cases of misleading advertising is the “reasonable person” test. The courts consider what a “reasonable person” would believe that the marketing material meant. The problem is that there’s no real consensus on what benefit a reasonable person would believe is implied by words like “natural”.

On its most basic level, terms like these can be applied to the ingredients that make up the product. For example, “natural” may mean only that the product uses no artificial colors, scents, or laboratory-created supplements. Perhaps a reasonable person might imply nothing more than this, so the benefit to them would be if they have an allergy or sensitivity to artificial or chemically-created products. But what if a reasonable person in the modern day has a different interpretation of “natural”?

If a reasonable person would be led to believe that natural products are safer, more eco-friendly, or provide some sort of health benefits, then the Honest Company’s use of the “natural” term in their advertising would be misleading unless they could prove that their products met the standards implied by their marketing. Certain terms like “non-toxic” and “compostable” face more stringent scrutiny from the Federal Trade Commission, but the FTC has been suspiciously quiet about more generic terms like “natural”.

What to watch

This is a very young case, filed only in February 2016. Additionally, it was filed under New York’s state laws in New York courts, so it’s very unlikely to lead to precedent-setting change throughout the United States. However, if this class action suit succeeds in proving that “natural” has a greater implication to a reasonable person, that decision could empower additional legal action on a level that could set a precedent.

Lessons for the Marketer

This case carries broader implications for marketing than just an indictment against greenwashing in the cosmetic and body care industry. Rather, it’s a case that reminds the marketer of the need for creative and innovative communication.

Think of the term “natural” as it applies to Honest Company products. What does it imply? It implies that the products are:

  • safer than products made with synthetic ingredients
  • non-toxic
  • safe for sensitive skin
  • safe for children and babies
  • hypo-allergenic
  • eco-friendly (some sort of vague environmental benefit that’s not really specified)

There are consumers who believe that natural products are always safe and synthetic products are always dangerous. Whether those consumers are “reasonable persons” or not is a matter for the court to decide.

But as a marketer, I would advise steering clear of claims like this.

It’s not worth the risk.

To put it bluntly, it’s not worth the risk. It is unlikely that the Honest Company will lose this lawsuit in any meaningful or substantive way that harms the company, but the cost of defending itself against this lawsuit, not to mention the bad press and the increase in regulatory scrutiny, aren’t worth the hassle.

Generic words are meaningless.

Terms like “natural” and “non-toxic” are meaningless in cosmetics and body care. “At present, the word ‘natural’ in food marketing is meaningless, and that’s the way food companies want it,” says Gary Ruskin, executive director of U.S. Right to Know. As more and more consumers tune in to the misuse of words like “natural”, these words will become less useful as marketing tools.

Furthermore, generic terms simply don’t carry the punch that factual information does. For example, “hypoallergenic” has become so overused as to be worthless and ignored, while “allergy tested” or “allergist recommended” are more specific and more persuasive.

Features tell. Benefits sell.

For every product, there are features, specifications, and benefits. The features of a product like Honest Company’s Mineral Sunscreen (SPF 50+) are:

  • a lotion
  • protects the skin from sun damage

The specifications of this product are:

  • SPF 50+
  • clinically tested
  • water resistant
  • fragrance free
  • and a few more…

But the benefits of the product… That’s what actually sells the product. So if I were selling this product, I’d talk about how it’s hard to get kids to wear sunscreen because as they sweat, it gets into their eyes and burns. But with this product, it’s gentle enough to not irritate their sensitive skin and eyes, and it’s lightweight enough that they forget they’re wearing it. So I can let my kids play in the sprinkler or frolic on the beach while I have the comfort and security of knowing that they’re protected from harmful UV rays.

In other words, the benefit of the product (with this particular off-the-cuff marketing idea) is:

  • I, the Mom, can enjoy watching my kids play in the summer without worrying about them getting a sunburn (or worse!); and
  • I don’t have to argue with my kids about putting on their sunscreen.

Benefits will often start with “I” or “The customer”. The benefit tells what’s in it for the customer or client, and that’s always what closes the sale.

Marketing a product as “natural” or “sustainable” or “eco-friendly” or any of those other things – it’s trying to sell the product based on the feature or specification, not the benefit. Wise marketers know that you always sell with the benefits.

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