2019 Food Labeling Trends and What to Expect in 2020

February 4, 2020

2019 …

  • Slack-Fill Class Actions. Last year at this time, slack-fill class actions appeared dead. But in 2019, some of the plaintiffs’ bar’s biggest wins came in slack-fill class actions, with several resulting in class certifications.
  • Targets. Product labels making claims related to sugar, artificial flavors (especially malic acid and citric acid), principal flavors (especially vanilla), being “environmentally friendly,” animal welfare and geographic origin have been notable targets for the plaintiffs’ bar and nonprofit groups. Multiple actions for each were filed in multiple venues.
  • Venues. Once upon a time, most food-labeling class actions were filed in California, but no longer. More and more class actions (and suits seeking injunctive relief) are filed in New York, the District of Columbia and other venues across the nation. It was largely the cases outside California that made the most news in 2019.
  • M&A Deals. Capital is still being put to work. Valuations remain high, but the cost of capital is low so deals continue to get done. One deal in the restaurant industry, notable for its reach outside of the industry itself, was McDonald’s Corporation’s acquisition of a technology company, Dynamic Yield.
  • Bankruptcies. As much as everyone hates to use the word, it seemed there was more news about bankruptcy filings in 2019. Some notable examples include Kona Grill, Dean Foods, Perkins & Marie Callender’s and Restaurants Unlimited.

… 2020

  • CBD Class Actions. Just about everyone is jumping on board the CBD train — infusing everything from gummies to coffee to potato chips to cosmetics to even toothpaste — and class action plaintiff’s lawyers have noticed. Just in the last months, some have begun filing class action lawsuits against companies manufacturing and selling CBD products; many more of these will likely be filed in 2020.
  • Pesticides/Heavy Metals/Chemicals. Class actions targeting glyphosate in food products were largely unsuccessful for the plaintiffs’ bar in 2019. Expect renewed efforts in 2020 focusing on other pesticides (such as thiacloprid and acetamiprid), heavy metals (such as arsenic, lead, cadmium and mercury) and chemicals (such as oxybenzone and PFAS), in not only foods, but also non-food products and even packaging.
  • Courts. The last few years have brough a sea change in the composition of the federal appellate courts. In 2020, expect to see the new iterations of these courts weigh in to a greater extent on food and product labeling class actions, perhaps embracing the reasonable consumer standard and challenges to class actions.
  • Acquisitions. Deals will continue to get done. As has been said for several years now, albeit usually with reference to the term “dry powder,” there is ample capital to put to work. Expect to see buyers looking down-market to new and/or growth concepts and products.
  • Trouble Ahead? Expect to see a few more bankruptcy filings. So far, 2020 has seen filings for Bar Louie and American Blue Ribbon Holdings.