Tuesday, February 15, 2011

This Is Getting Nutty

In my last post, "Where's The Beef?" I chronicled how, after an initially tepid response, Taco Bell eventually presented a strong and effective response to a lawsuit alleging that there is very little beef in the fast food chain's tacos, and therefore it should be prohibited from advertising the tacos as containing "seasoned ground beef or seasoned beef."

Lawsuits claiming a consumer product is falsely advertised threaten damage to the brand and its reputation. This is even more true when the lawsuit involves a food product, as many consumers have become more discerning of the ingredients in the products they eat. I believe that a company's response to such lawsuits cannot await the litigation process; instead the company is best served if it responds swiftly and directly in the court of public opinion.

A number of companies have taken a "wait and see" attitude towards these lawsuits, seeking to calibrate their response to the amount of publicity. However, as I have previously noted in "Reputation Management in the Digital Age," hoping a controversy will quiet down can lead to disastrous results.

Notwithstanding the foregoing, it does appear that Ferrero USA Inc., the company that produces Ferrero Chocolates and Tic-Tac breath mints, has initially weathered the publicity concerning a lawsuit over the ingredients in its hazelnut spread, Nutella. Earlier this month, a San Diego solo practitioner filed a consumer class action in U.S. District Court for the Southern District of California, alleging that Ferrero USA is in violation of California consumer protection laws by representing that Nutella is a healthy, nutritious and balanced breakfast for children. The lawsuit alleges that the name plaintiff, Athena Hohenberg, the mother of a four-year-old child, bought Nutella after she saw advertisements showing mothers serving their children the product and declaring that the spread was a healthy and nutritious breakfast. According to the complaint: "Nutella, however, contains 70% saturated fat and processed sugar by weight. Both of these ingredients significantly contribute to America's alarming increases in childhood obesity, which can lead to life-long health problems." The complaint alleges that Ms. Hohenberg was "shocked" when she learned that Nutella was not healthy and "was the next best thing to a candy bar."

Ferrero USA's first official response to the lawsuit was exceedingly tepid. According to a story on AFP, when asked for comment, Elise Titan, a spokesperson for Ferrero USA, said the company stands by the wholesomeness of its product:

"What we can say right now is that we stand behind the quality of ingredients in Nutella hazelnut spread and advertising for our product," she said.

"It's really early in the case and we are really not in position to discuss the case any further," she said.

Fortunately for Ferrero USA, numerous bloggers have ridiculed the lawsuit, likening it more to the mother who sued McDonald's over its Happy Meal than to the lawsuit concerning the amount of beef in a Taco Bell taco. However, there may be some merit in the lawsuit. As reported in the Washington Post, ads touting Nutella as part of a healthful breakfast were challenged on similar grounds and withdrawn in the United Kingdom in 2008. Therefore, Ferrero USA may not be totally out of the woods yet, and further proceedings in the lawsuit may put more pressure on the company to defend its product and its advertising in the court of public opinion.