The Truth Behind 5 Misleading Food Labels

Don't get conned into buying food products by labels alone. With some guidance from the USDA and the FDA, you can shop smarter.

Aug 12, 2014 at 10:47AM


Source: Author image.

Food shopping is more complicated than you think. Every aisle contains dozens of confusing labels slapped onto nearly every type of product. Although labeling was originally well-intentioned, food producers have weaseled in and out of loopholes to trick you into purchasing their products by applying labels to secondary ingredients -- or making blatantly false or misleading claims. What does it really mean if products are all-natural or gluten-free? Do you know what cage-free means and when it's actually relevant?

If you don't, you're not alone. The differences between the definitions from the U.S. Department of Agriculture and food producers are staggering. Occasionally these interpretive liberties can land food companies in hot water -- legal action against false advertising can represent a serious cost. So let's examine five types of misleading food labels you'll encounter on your next trip to the grocery store, to ensure you don't play into the hands of marketers.

1. All-natural

What the USDA says: "As required by USDA, meat, poultry, and egg products labeled as "natural" must be minimally processed and contain no artificial ingredients. However, the natural label does not include any standards regarding farm practices and only applies to processing of meat and egg products. There are no standards or regulations for the labeling of natural food products if they do not contain meat or eggs."

That pretty much says it all. It also explains how Frito-Lay, owned by PepsiCo (NYSE:PEP), advertises "all-natural" Cheetos by loosely redefining the term as "No preservatives, no artificial flavors, and no artificial colors." Unless regulators step up enforcement, the industry will have to police itself. There is hope for reform, however. Mounting pressure -- including lawsuits -- forced PepsiCo to change its "Simply Natural" chip products to "Simply" without changing ingredients.

2. Gluten-free

What the USDA says: No comment. However, in August 2013, the U.S. Food and Drug Administration drafted a final rule defining the term for voluntary use. The food industry has until this month to bring labels into compliance, defined as follows: "[F]ood either is inherently gluten free; or does not contain an ingredient that is: (1) a gluten-containing grain (e.g., spelt wheat); (2) derived from a gluten-containing grain that has not been processed to remove gluten (e.g., wheat flour); or (3) derived from a gluten-containing grain that has been processed to remove gluten (e.g., wheat starch), if the use of that ingredient results in the presence of 20 parts per million (ppm) or more gluten in the food. Also, any unavoidable presence of gluten in the food must be less than 20 ppm."


Source: Domino's

I was shocked to discover that Domino's Pizza (NYSE:DPZ) offers gluten-free crusts that comply with the new standards (oddly, it doesn't recommend it for customers with celiac disease). Unfortunately, you'll have to toss most other pizza offerings aside. Then again, Domino's Pizza isn't the problem -- that can be defined by numerous other food producers making false claims to piggyback on the nearly $5 billion gluten-free industry. While you can view dozens of misleading gluten-free labels on a single trip to the grocery store now, that will quickly fade with more accurate labels on the way, beginning this month.

3. Cage-free

What the USDA says: "This label indicates that the flock was able to freely roam a building, room, or enclosed area with unlimited access to food and fresh water during their production cycle."

What the USDA definition doesn't say is that broiler chickens -- those raised for meat -- are rarely kept in cages, meaning nearly every chicken product you purchase, with the exception of eggs, is cage-free by default. That matters when purchasing products from Tyson Foods (NYSE:TSN), which accounts for 21% of total U.S. chicken production. Luckily for consumers, the world's second largest meat producer hasn't encountered lawsuits about misleading advertising for its poultry products related to "cage-free" claims. Antibiotic-free claims are a different story.

4. Antibiotic-free

What the USDA says: "It's illegal to use 'antibiotic-free' on food packages."


Source: Tyson Foods.

No problem -- the food industry is great with wordplay. Tyson Foods was caught in a labeling lawsuit in 2007 when its two largest competitors, Perdue Farms and Sanderson Farms, alleged false advertising against its "Raised Without Antibiotics" marketing campaigns. The two competitors rightfully acknowledged that Tyson Foods feeds its chickens ionophore antibiotics, demanded $14 million in losses from unfair competition, and successfully made the food giant stop its advertising campaign and pay $5 million.  

What consumers may not know is that the U.S. Food and Drug Administration is in the process of implementing a voluntary plan with the food industry to phase out the use of certain antibiotics from cattle, hog, and poultry production. The goal is to reduce the impacts of antibiotic resistance for human health-care products, not to make labels more accurate, but consumers will welcome the benefits of both.

5. No added hormones

What the USDA says: "A similar claim includes 'Raised without Hormones.' Federal regulations have never permitted hormones or steroids in poultry, pork, or goat."

I'll bet that's news to most consumers -- and it's exactly why Horizon organic dairy milk from WhiteWave Foods (NYSE:WWAV) lists an asterisk next to its claims, followed by a statement that reads, "No significant difference has been shown between milk from [growth hormone-treated] and non-[growth hormone-treated] cows." From a biochemistry standpoint, bovine growth hormone has no effect on humans. So why make such claims or labels in the first place?

Educate yourself

You are free to eat whatever you want, but don't get caught up in the misinformation of food labels. The best way to remove yourself from the herd is to understand food labels -- and their actual legal meanings -- before purchasing a product. You can even browse through the nutritional content of over 8,000 food products as determined by the USDA. Make it a habit to remind yourself before each grocery trip.


Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolioCAPS page, or previous writing for The Motley Fool, or his work for SynBioBeta, to keep up with developments in the synthetic biology industry.

The Motley Fool recommends PepsiCo and WhiteWave Foods and owns shares of PepsiCo, Sanderson Farms, and WhiteWave Foods. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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