“Organic” Claims on Non-Agricultural Goods: FTC to Hold Public Meeting

In 2015, as a follow-up, in part, to the “Green Guides,” the Federal Trade Commission (“FTC”) and the USDA’s National Organic Program (“NOP”) co-funded an Internet-based study that surveyed 8,015 consumers about their perceptions and understanding of “recycled content” and “organic” claims. A purpose of the study was to determine whether additional guidance regarding the two claims should be provided through an amendment to the earlier Green Guides.  Per the report, issued last week, the conclusions drawn from the study do not justify changes or additions to the FTC’s prior guidance on “recycled” claims, but do justify considering additional guidance for “organic” claims. Thus, the FTC and USDA are holding a public roundtable on October 20, 2016, to explore organic claims for non-food products, and how they can work together to reduce deceptive “organic” claims. The roundtable discussion will bring together industry members, environmental groups, government agencies, and academics to fully explore how to convey “organic” claims non-deceptively.

[This blog post focuses on the “organic” claims portion of the study because of the particular relevance to the cosmetic industry–although, you may find the “recycled content” portion of the study equally interesting. Also, as the report provides a detailed explanation of the survey’s methodology and questions, here I only provide a brief overview of some of the points I found particularly interesting or relevant.]

In the study, participants were asked questions aimed at determining how they understood the term “organic” in a variety of contexts, focusing on product categories that generally fall outside USDA’s existing NOP requirements– in particular, dry cleaning services, mattresses, and shampoos. (As this is a blog for the cosmetics industry, my emphasis is on the responses pertaining to shampoos.)

Participants were initially asked to rate their familiarity with “organic” without context or product framing. Notably, 82% (or 4 out of 5 respondents) self-reported having some understanding or a very thorough understanding of the claim while 18% reported very little to no understanding.

Respondents were then asked an open-ended question pertaining to what “organic” means in terms of a specific product type. In response, 63% of respondents described an “organic” shampoo to be “natural” or made of “natural materials” and with “no/less chemicals/additives.  In addition, when asked whether “organic” in the context of these non-agricultural product categories was equivalent to an agricultural product, e.g., an apple, 41% thought it meant the same thing. 

The results also suggest that for products with less than 100% organic content, qualified claims stating which parts of the product are organic are significantly less likely to mislead consumers than unqualified organic claims. Alternatively, a percentage qualification may also make the claim less misleading. The authors further assert that the results suggest that a significant proportion of consumers believe that if a non-food product contains even a small amount of material from a man-made chemical process (as opposed to from plants or animals), even less than 1%, then an unqualified organic claim does not accurately describe that product. If you follow this blog, this conclusion shouldn’t come as a surprise.  Indeed, whether making a “Made in USA,” “natural,” “recyclable,” or “clinically validated” claim—qualifying the claim to avoid potential deception is almost always a good idea.

These results may, as the author suggests, provide valuable insight into consumers’ tolerance and expectations regarding non-organic material in a product bearing an unqualified organic claim; however, the agencies also acknowledge several limitations that must be considered before giving the survey too much weight.

First, the survey questions ask respondents whether they agree with the claim, not how they interpret the claim. Accordingly, the results do not provide a direct measure of deception because respondents might disagree with the claim due to their opinions on what the term should mean compared to how it is actually used in the marketplace. Thus, even if they disagree, they may not be deceived by the claim.

Second, the scenarios define non-organic content as material “made by a man-made chemical process.” Thus, it seems likely that some consumers may not interpret this description to include some non-organic (i.e., conventionally grown) agricultural materials.  It seems certain that such a definition would limit the study results as applied to products that contain such non-organic (conventional) agricultural material.

Third, the survey did not test the term “USDA Organic.” As it is likely the USDA certification seal signals something different to consumers, the results may not apply to products bearing the USDA’s certification seal—rather than simply the word “organic.”

The authors of the report also acknowledged that results, because based on an internet panel that did not provide a probability sample, are not projectable to the general population. In addition, the authors explained that the survey had

“a low response rate (meaning that results may exhibit some non-response bias), unexpected distributions of responses to some control questions (possibly indicating measurement error), and the fact that results do not necessarily provide a direct measure of deception (i.e., the results may indicate that consumers disagree with the definition of organic used in the study for policy reasons, rather than that they are deceived by the claims). Due to these possible biases, the exact response percentages and quantitative differences between scenarios should be regarded with some caution.”

Take away… Get involved. Do you market a cosmetic product with organic claims? If so, now is your time to have your voice heard.   The roundtable will take place on October 20, 2016, at FTC’s Constitution Center Building, 400 7th St., SW, Washington, DC 20024. At the roundtable, invited panelists, including consumer advocates, industry representatives, and academics, will discuss the following topics:

  • Consumers’ interpretations of “organic” claims for products and services that generally fall outside the scope of the USDA Agricultural Marketing Service’s National Organic Program;
  • The FTC-USDA study on organic claims, including its methods, limitations and conclusions; and
  • Approaches to address potential deception, including consumer education.

The roundtable is open to the public, and the FTC welcomes written comments, including further evidence of consumer perception. Interested parties may file a comment electronically or provide written comments mailed to: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue N.W., Suite CC-5610 (Annex B), Washington, DC 20580, or they may be delivered to: Federal Trade Commission, Office of the Secretary, 400 7th Street SW, 5th Floor, Suite 5610 (Annex B), Washington, DC 20024.

Commenters should write “Green Guides – Organic Roundtable, Project No. P954501” on their submission. The public comment period will remain open until December 1, 2016. Comments will be posted on the roundtable’s public webpage.

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