Frosted Mini Wheats maker pays $2.75M to settle class-action lawsuit. What's the lesson here for food marketers?
If you are a cereal company, you’d best watch the claims you put on your product boxes. Kellogg, the United States’ largest cereal manufacturer, is learning this lesson once again—this time for claims it made for its popular Frosted Mini-Wheats cereal in 2009.
In 2009, the Frosted Mini-Wheats box included a claim that said the cereal was “clinically shown to improve children’s attentiveness by nearly 20 percent.” On Nov. 16, the company settled a $2.75 million class-action lawsuit over that statement. Through the settlement, Kellogg must pay customers between $5 and $15 each and give $5.5 million to charity.
Kellogg drew the ire of state governments and the Federal Trade Commission (FTC) last year for the banner displayed on its Rice Krispies boxes that said, “Now supports your child’s immunity.” The company removed the claim and was forced to destroy more than 2 million cereal boxes printed with the immunity banner and donate nearly 500,000 boxes of cereal to food charities as part of a lawsuit settlement with Oregon’s Attorney General.
As Nutrition Business Journal reported in its 2010 Nutrition Industry Overview issue, crossing the health claims line—such as Kellogg has done—is now almost a surefire way to entice a consumer lawsuit. “Lawyers who specialize in class actions are systematically trolling for outrageous advertising claims,” James Prochnow, an attorney who focuses on food and drug law as well as advertising law at Denver-basedGreenbergTraurig, told NBJ.
So what’s the lesson here? “Don't make exaggerated claims about the effectiveness of your product,” Prochnow said. “That's the biggest thing.”