As the world has become more aware of the growing obesity epidemic and the dangers of unhealthy eating habits, many consumers have begun to make efforts to purchase healthier foods.
Unfortunately, while many consumers have good intentions when it comes to buying natural, organic foods, few of them actually know what labels such as “natural,” “local” and “organic” really mean.
Here’s a breakdown of what consumers are getting from a legal perspective when they buy food with these labels.
“Local”
When one pick up some apples at the grocery store that are labeled as “local,” does that mean that they came from the farm just down the street? Unfortunately, the food label “local” has no legal definition.
Some stores consider “local” to mean food grown within a 400-mile radius. It’s unlikely many New Yorkers would consider the Boston Red Sox their “local” sports team, despite the fact that Fenway Park is less than 250 miles away.
“Natural”
Incredibly, the food label “natural” also has no legal definition. That means that food labeled as “natural” can legally contain any number of synthetic chemicals and genetically-modified organisms (GMOs).
A large number of companies have been sued for their use of the label “natural” on their products, including General Mills Inc GIS 0.64%, Dr Pepper Snapple Group Inc DPS 1.05%, Pepsico Inc PEP 0.72% and Kellogg’s K 0.26%.
In the past, the FDA has stated that restricting use of the label “natural” was “not among its enforcement priorities,” which means that, as far as the FDA is concerned, companies are free to use the label at will, at the risk of consumer lawsuits.
“USDA Organic”
Finally, “USDA Organic” is a label that actually means something for consumers. In order for a product to have a USDA organic label, it must meet a rigorous and clearly-defined set of standards:
1. Farmers have used no synthetic pesticides, chemical fertilizers or GMOs in the creation of the product.
2. Meat, eggs and dairy products come from animals that have not been given growth hormones or antibiotics.
3. In order for a farm to qualify to produce USDA organic products, it must not have used any of the prohibited substances for at least three years prior to the farm’s application for USDA Organic certification.
While USDA Organic certification comes along with actual legal standards, it’s important to note that pesticides derived from biological sources and the use of other synthetic substances, such as pheromones and animal vaccines, are allowed under USDA Organic standards.
Investing In Natural Food
A large part of The Kroger Co KR 0.78%‘s 45 consecutive quarters of same-store sales growth has come as a result of its push to offer more organic and natural food choices for customers.
The focus on natural food is one of the reasons that companies such as Kroger and Whole Foods Market Inc WFM 0.9% have gained market share in recent years from the likes of Wal-Mart Stores Inc WMT 0.33% and Target Corp TGT 1.14%.
And a note to investors looking to capitalize on the organic food craze: Stocks such as The WhiteWave Foods Co WWAV 0.94%, Boulder Brands Inc BDBD 1.37% and United Natural Foods Inc UNFI 0.73% have been linked to this trend in the past.
Takeaway
While it may be impossible for consumers to avoid every single unnatural substance in their food, understanding exactly what food labels do (and don’t) mean is an important part of living a healthy lifestyle.
Sometimes ignorance can be as dangerous to a consumer’s health as saturated fat.
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