Food & Beverage Crystal Ball: Trends we’re following

August 06, 2019

Food, Beverage & Agribusiness Alert

Author(s): Bruce E. Copeland, Deanna R. Kunze, Tracey B. Scarpello, Alison B. Torbitt

In this edition of Nixon Peabody’s quarterly Crystal Ball Newsletter, our Food, Beverage & Agribusiness (FBA) team address an important outcome in food-labelling laws, the rising consumption of plant-based meat, and two critical trends that are impacting craft breweries. We will continue to watch closely as these issues, and others, unfold in the months ahead.

FDA clarifies “added sugars”-labelling rules for honey and maple syrup

In a final guidance document issued last month, the Food and Drug Administration (FDA) clarified that product labels on maple syrup, honey, and other sugars sold as single-ingredient packages/containers will not have to list “added sugars.” The FDA initially proposed that such product labels list grams of “added sugars,” triggering strong objections (from the industry) that including “added sugars” would imply that sugar is added to the product when it is actually not. Apparently, in response to industry criticism, the final guidance will exempt pure honey, pure maple syrup, and other pure sugars/syrups from listing grams of added sugars, but will still require the product labels to include the percent Daily Value (%DV) for “added sugars.” However, dried cranberry products and cranberry beverage products must still declare added sugars in grams and declare %DV for added sugars. Tracey Scarpello

States pass laws increasing craft beer self-distribution

As the craft beer industry continues to grow and mature, many U.S. states are passing regulations to help craft breweries thrive through self-distribution. In North Carolina, Gov. Roy Cooper signed the Craft Beer Distribution and Modernization Act (H.B. 363) into law in June, saying the beer industry “represents thousands of jobs for our state and tens of millions of dollars in investment.” Tim Kent, executive director of the Wholesalers Association, said the beer industry has an annual $9.2B economic impact on North Carolina. North Carolina’s H.B. 363 moots a pending lawsuit brought by craft brewers alleging that statutes on distribution cap and franchise laws were unconstitutional. In July, Maine’s Governor signed S.B. 593 into law, redefining small breweries and allowing them to annually self-distribute from 50,000 gallons to 300,000 barrels. Approximately 36 states now allow for self-distribution, and 16 place no restriction on self-distribution. The remaining eight self-distribution states have limits between 25,000 to 300,000 barrels. In states like Florida and Louisiana with no self-distribution, bills seeking to allow self-distribution have stalled in committee. Bruce Copeland; Deanna Kunze

Plant-based meat growing in popularity

The emerging food trend of plant-based alternatives to animal products, dominated by companies like Beyond Meat and Impossible Foods, grew five times faster than the food industry as a whole, a recent market report finds. According to the Good Food Institute, plant-based food sales grew in the past year to more than $3.7B. The success of plant-based alternatives has attracted the attention of large food companies as well, including those that are known for selling animal products—Perdue and Tyson Foods. Perdue will be offering a hybrid product that contains chicken products mixed with vegetables. And Tyson Foods, which plans to launch its own plant-based alternatives, also already owns a minority interest in Memphis Meats, a startup located in San Francisco that is developing cell-cultured meat. Fast-food restaurant chains, including Burger King, Red Robin, and Del Taco, are also embracing the plant-based alternative trend by adding vegan-friendly items to their menus. Tracey Scarpello

Beverage industry subject to increased ADA-driven, website-accessibility suits

A significant number of U.S. craft breweries and wineries are the subject of an increasing volume of website accessibility lawsuits filed under the Americans with Disabilities Act (ADA). Title III of the ADA ensures that individuals with disabilities have equal access to the services and benefits provided by “places of public accommodation.” While the ADA does not specifically define a commercial website, like those of craft breweries and wineries, as a place of public accommodation, numerous courts have held a website to be a place of public accommodation because it provides the public with access to a company’s goods or services. Therefore, any employer whose website is subject to the ADA must ensure that their website is accessible. As craft breweries and wineries are targeted with greater frequency, they will want to move as quickly as possible to voluntarily remediate non-compliant websites in order to avoid liability. Jeffrey League

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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