Nakéd Juice: Unnatural Ingredients (2013)

Controversy

Popular flavors of Nakéd Juice

In 2013 PepsiCo had a lawsuit brought against them for their marketing of "Nakéd Juice". Marketed and sold as an "all-natural" juice drink the lawsuit brought against PepsiCo took issue with health phrases that did not accurately portray the product. The lawsuit states that the drink contains Genetically Modified Organisms (GMOs) despite PepsiCo's denial of such claims. Additionally PepsiCo's use of the phrase "all-natural" is seen as misleading since some of the Naked Juice products use some synthetic vitamin boosters and a synthetic fiber additive. PepsiCo decided to settle the lawsuit with a $9 million settlement fund that allows consumers to get up to $75 with proof of purchase from consuming the Naked Juice products between September 2007 and August 2013. The settlement fund looks to pay reparations to the consumers of the product within the given time frame. The stakeholders in this lawsuit are all the affected consumers who purchased the Naked Juice products up until August 2013 and PepsiCo itself. This post will look at PepsiCo's use of phrasing in marketing and selling Naked Juice as well as the message the settlement sends to consumers using four ethical theories: Individualist Theory, Utilitarianism, Kantianism, and Virtue Theory.
Individualism
In Individualist Theory a business's primary goal is to make profits for its stockholders and employees so long as the business respects laws and human rights in the process. PepsiCo's actions in marketing Naked Juice as "all natural" and "non-GMO" allowed for consumers to trust the all natural label in making a healthy drink choice. Without a doubt this allowed profits for Naked Juice to gain a foothold in the market thanks to the healthy, all natural marketing. However, this marketing is deceptive at best for the consumer since some genetically altered ingredients are used in the drink. Genetically altered soy, vitamins, and fiber do not fit the image of an "all natural" product. While the Food and Drug Administration (FDA) does not have a formal definition for what makes a product "natural," they do have guidelines that states as long as a product does not have added color, artificial flavor, or synthetic substances the product could be labelled as "all natural." With the use of some synthetic ingredients PepsiCo clearly mislabeled their product and did not respect the FDA's guidelines of natural.

Utilitarianism

PepsiCo. logo, owner of Naked Juice

For Utilitarianism the most valuable emotion is happiness. Utilitarianism states that any action that tries to make everyone happy is ethical. PepsiCo may have tried to maximize the happiness of their consumers by offering an "all natural" product and thus tried to maximize their profits at the same time. That may seem good on the surface but the lawsuit highlights the unhappiness of the consumers in being misled about some of the ingredients in their juice product. The settlement tries to make up for this mislabeling by allowing the consumers to be reimbursed but that does not excuse PepsiCo's actions according to this theory. They intentionally labeled the Naked Juice product to make money but overlooked the part of the market that holds all natural products to a high standard in making sure that they do, in fact, contain all natural ingredients.

Kantianism
Kantianism states that businesses should always work within the rules, never consider themselves exempt from those rules, and help consumers make well informed choices for the good of everyone. This intrinsic value system to allow people to make rational, autonomous decisions is the cornerstone for this theory. PepsiCo had deliberately labeled their Naked Juice products as all natural to persuade consumers to choose that drink over other competing juice products. The all natural label worked to bring in consumers that were worried about making healthy drink choices but the questionable ingredients and their discrete inclusion in the Naked Juice products works to misinform the consumer. Under Kantianism PepsiCo makes an unethical choice in choosing the all natural label because of their use of some synthetic ingredients. The settlement shows that PepsiCo thought that they would be able to skirt by with the loose definition of "all natural", but when eventually called out for it they would rather pay up than go through a lengthy judicial process.

Virtue Theory

Donald M. Kendall, one of three founders of PepsiCo.

Virtue Theory uses four cornerstone characteristics: courage, honesty, self-control, and fairness. Courage marks a company's willingness to take chances and stand up for what is right. Honesty marks a company's truthfulness with their business actions. Self-control refers to a company's ability to create reasonable expectations and live up to those expectations. Fairness refers to a company's hard work and fair practice. PepsiCo definitely took a chance in labeling Naked Juice as "all natural" but when brought up to the lawsuit, they decided to drop the "all natural" label in favor for a "non-GMO" label. Yet PepsiCo was considerably truthful in their explanation for dropping the "all natural" label: "In some products, we also include an added boost of vitamins. Naked juice and smoothies will continue to be labeled 'non-GMO,' and until there is more detailed regulatory guidance around the word 'natural' -- we've chosen not to use 'All Natural' on our packaging." This is a fair explanation behind the use of the label and the lack of FDA definition for what a natural product is. As far as self-control goes PepsiCo failed to live up to the "all natural" expectations when some synthetic ingredients were found in their Naked Juice products. As far as Virtue Theory goes PepsiCo did good in how they handled the situation once synthetic ingredients were found but their use of the "all natural" label from the beginning was dubious.

Conclusion Overall PepsiCo acted fair in their response but rather unethically in trying to use the all natural label when such a flimsy guideline was in place. By using this label they tried to create profits using an expectation of natural ingredients despite the existence of synthetic additives in their Naked Juice products. While not outright unethical it is rather dubious for PepsiCo to try to pass it off as all natural but in the end "non-GMO" may be the better label to accurately represent the drinks.

References

Kim, Susanna. "Naked Juice Class Action Settlement Offers Up to $75 Per Consumer."ABC News. ABC News Network, 27 Aug. 2013. Web. 13 Mar. 2014.


Long, Josh. "Naked Juice to Verify Non-GMOs under "All Natural" Settlement." Food Product Design. FoodProductDesign.com, 23 Aug. 2013. Web. 13 Mar. 2014.


Sarich, Christina. "PepsiCo's Naked Juices Have to Drop 'All Natural' Label After $9 Million Class Action Lawsuit" Nation of Change. NationofChange.org, 23 July 2013. Web. 13 Mar. 2014.


Tepper, Rachel. "Naked Juice Class Action Lawsuit Settlement Over Health Claims Means $9 Million For Consumers." The Huffington Post. TheHuffingtonPost.com, 28 Aug. 2013. Web. 13 Mar. 2014
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Kashi’s Claim on Natural Foods (2011)

Based on a Paper by Mayara Jordani
Summary by Mayara Jordani

 

 

Kashi brand was first created in 1984 by Phil and Gayle Tauber and is owned by the Kellogg’s Company. Kashi’s goal is to “give people what the need to live their best lives, while making great tasting, naturally nutritious foods.” Kashi does this by offering minimally processed foods, with no artificial colors, flavors preservatives or sweeteners.

However in October of 2011, Cornucopia Institute tested Kashi’s GoLean cereal and found that it contained 100 percent genetically engineered soy.  In August of 2011, shortly before this controversy broke, Michael Bates and his attorneys in California brought forth a law suit against Kashi and Kellogg’s for falsely advertising their products as “All Natural” and “Nothing Artificial.”

Kashi was finally exposed of their secret in late 2011. Kashi used all natural ingredients except when it came to their soy, which was genetically engineered with a gene inserted to protect the soybeans from the herbicide Roundup, which kills weeds. However Kashi still continued to advertise their products as “natural” and “only natural ingredients used.”

David DeSouza, Kashi’s general manager stated that they had done nothing wrong. DeSouza stated that the FDA had chosen not to regulate the term natural. DeSouza states that Kashi defines natural as "food that's minimally processed, made with no artificial colors, flavors, preservatives or sweeteners.” Shortly after this controversy occurred, Kashi, in an effort to gain their reputation back has partnered up with the Non-GMO Project. The Non-GMO Project is a non-profit organization that verifies foods to make sure they are clear of any genetically modified ingredients. Kashi has seven of their cereals verified by the Non-GMO project.

There are laws against false advertising which is why Michael Bates and his attorneys won the law suit against Kashi and Kellogg’s. As a result, Kashi violate ethical standards. Under the Individualism theory and part of the Utilitarian theory Kashi did nothing wrong. However, under the Kantianism theory, Virtue theory and part of the Utilitarian theory, Kashi acted unethical.

 The Individualism Theory according to Friedman states that the only goal of a company is to profit and maximize the profit for the owner and stockholder. According to the individualism theory, Kashi did nothing ethically wrong. On the contrary, the company did everything to maximize the company’s profits by labeling their products as ‘natural’ and selling them for the same price as cereals that are natural.  The average price of a cereal by Kellogg’s is $3.80. Kashi Squares Berry Blossoms Cereal is marketed as ‘natural tasting’ and costs about $4.30. For the same price of Kashi’s cereal, those looking for actual natural tasting and organic cereal can buy Nature’s Path Cereal that is certified organic and natural. Also, looking at Kellogg’s 2012 Annual Financial Reports, it is clear that Kellogg’s has profited from the sale of Kashi’s food. In 2010, the company reached a net sale of $12,397 million. In 2011 when the controversy occurred, the company’s net sales still increased to $13,198 million and in 2012, the company’s net sales reached a peak of $14,197 million.

The Utilitarian Theory states that we must act in order to maximize the overall good to the greatest amount of people. The stakeholders in this situation were Kashi’s customers, Kashi brand and Kellogg’s. Looking at Kashi’s customers, the company was not able to bring happiness to their customers. This is because the customers were tricked into thinking that Kashi’s products were actually natural. Many of Kashi’s faithful customers after finding out Kashi’s definition of ‘natural’ have stopped buying their products. Many store owners have also removing Kashi products from their shelves until Kashi completely removes all genetically engineered ingredients from their products. On the other hand, the sale of the genetically modified cereals brought a lot of happiness to the company. Kashi and Kellogg’s were able to maintain their products on the shelves while marketing them as ‘natural’ and using genetically modified ingredients in their cereals. By marketing the products as ‘natural’ the company was able to sell the products for more, increasing the company’s profit and ultimately increasing their happiness. The sale of the genetically modified foods has also allowed many employees to keep their jobs, where as if the company had to recall the cereal, some employees could have been fired.

The Kantianism theory has several different parts. Part one states that one must act rationally and not consider one exempt from the rules. According to the first principal, Kashi did not act ethical because they felt that they were expect from telling consumers the truth about their products. Kashi felt exempt from the rule of being honest with customers. The second part of the theory states that it allows and helps people make rational decisions. With this, Kashi did not act ethical because although it seemed like the company acted ethical because they allowed the customers to make their own decision as to whether or not buy the products that contained genetically modified soy, Kashi lied about their ingredients which took away from customers making rational decisions, the decision to either consume the products or not. The third part to Kantianism states that it respects people, their autonomy and individual needs and differences. Kashi did not act ethical in under this principle because they did not respect people’s needs in eating healthy. They took advantage of those who wanted to eat healthier and better by marketing their products as natural when they were not. Lastly, the fourth principal states one is motivated by the good will, seeking to do the right thing because it is right. Kashi did not act under good will because they were not being honest about the ingredients in their products. If they had acted under good will, Kashi would have been honest about the ingredients in their products and not had advertised the products as ‘natural’ even if the FDA was vague about the definition of ‘natural.’

Lastly, the Virtue theory is based on four characteristics, courage, honesty, temperance/self-control and justice/fairness. Kashi did not display courage because they were not willing to tell their customers what their products actually contained. When Kashi was faced with the issue, their representatives stated that they had done nothing wrong. They used excuses to try to take the blame away from them. Kashi was also not honest in owning up to their mistakes and being honest to consumers about their products. Kashi was also unethical in the temperance/self-control aspect of this theory. This is because the company had no self-control in advertising their products. If the company wanted to advertise the products as natural, then they should have used all natural ingredients and stayed clear of genetically modified ingredients. Kashi should have had the self-control and done the right thing when advertising their foods. Lastly, the final characteristic is justice.  Kashi did not act upon this characteristic because they did not work hard to try to get the best product out to their customers. They took the easy way out and simple labeled their product as natural instead of using natural ingredients. The company was also not fair in the price of their products. The company sold the cereal for the same price as a certified organic cereal would be sold at. Overall, Kashi did not act ethical according to the virtue theory in this controversy.

According to the four ethical theories described above, Steve Madden Ltd. acted unethical in their work and to their stakeholders. The only ethical theory that Kashi is able to argue they acted ethical under is individualism. However, the remaining ethical theories would find Kashi’s actions to be unethical and incorrect. 

 

These analyses and facts are based upon the original paper by Mayara Jordani entitled "Kashi’s Claim on Natural Foods (2011)?" (Apr. 15, 2013).

 

DesJardins, J. (2011). An Introduction To Business Ethics. (4th ed.). New York, NY: McGraw-Hill Humanities/Social Sciences/Languages.

Holter, M. (2012, August 16). Kashi false advertising class action lawsuit survives in court. Top Class Actions, Retrieved from http://www.topclassactions.com/lawsuit-settlements/lawsuit-news/2288-kashi-false-advertising-class-action-lawsuit-survives-in-court

Johnson, L. (2013, March 28). GMO Controversy Heating up as Kashi Cereal Comes Under Scrutiny. Retrieved from http://www.naturalnews.com/039676_Kashi_GMO_ingredients.html

Kashi Seven Whole Grain Cereal Snacks Entrees. (n.d.).Kashi Seven Whole Grain Cereal Snacks Entrees. Retrieved March 30, 2013, from http://www.kashi.com/ourcommitment

Kellogg Company 2012 Annual Report. (2013). Retrieved from annualreport2012.kelloggcompany.com

Philpott, T. (2011, September 30). Mother jones. Retrieved from http://www.motherjones.com/tom-philpott/2011/09/gmos-safe-eat

Salazar, H. (2013, January). Individualism. Lecture conducted from Western New England University, Springfield, MA.

The Non-GMO Project. (2013). Retrieved from http://www.nongmoproject.org/about

Weise, E. (2012, March 29). Kashi cereal's 'natural' claims stir anger. Retrieved from http://usatoday30.usatoday.com/money/industries/food/story/2012-04-29/kashi-natural-claims/54616576/1