Kashi has agreed to pay $5 million and change its marketing to settle a false advertising suit over its “All Natural” and “Nothing Artificial” product claims.
The maker of GoLean Chewy Oatmeal Raisin Cookie Protein & Fiber Bars and Heart to Heart Honey Oat Waffles was the target of seven different consumer class actions that were consolidated in California federal court. Arguing that they paid a premium based on Kashi’s representations that the products were “all natural,” the plaintiffs said they actually contained unnatural, synthetic, and artificial ingredients.
Although Kashi denied all allegations, it elected to settle the suits by paying $5 million to fund a settlement. A class of California purchasers can receive reimbursement of 50 cents per package (those without proof of purchase are capped at a $25 recovery). A total of $1.25 million for class counsel and $4,000 incentive award for each class representative is also allotted from the fund.
In addition, Kashi will modify its labeling and advertising to remove “All Natural” and “Nothing Artificial” claims from products containing challenged ingredients (including pyridoxine hydrochloride and hexane-processed soy ingredients) “unless the ingredients are approved or determined as acceptable for products identified as ‘natural’ by a federal agency or controlling regulatory body.”
In a separate but related suit against Kashi’s Bear Naked Inc., the parties reached an agreement for $325,000. Plaintiffs in that case alleged that claims of “100% Natural” and “100% Pure and Natural” were false and deceptive. Under the terms of the settlement, class members can receive 50 cents per package (capped at $10 for plaintiffs who do not submit proof of purchase). The company will similarly remove the challenged claims from Bear Naked labeling and advertising.
A federal court judge will hold a hearing to consider approval of both deals in late May.
To read the stipulation of settlement in Astiana v. Kashi Co., click here.
To read the stipulation of settlement in Thurston v. Bear Naked, Inc., click here.
Why it matters: The settlements are the latest examples of consumer class actions challenging “all natural” advertising claims, which have flooded courts and led some to speculate the class actions are behind the disappearance of such claims from supermarket shelves. Kashi is certainly not alone in paying a multimillion-dollar settlement: Naked Juice settled for $9 million, Ben and Jerry’s agreed to pay $7.5 million, and ConAgra settled for $3.2 million, among others.