Consumer demand for natural cosmetics continues to grow. A Bloomberg News article projected the natural cosmetics market to grow over 5% annually and to be worth $48.04 billion by 2025. The article noted that high demand for natural products among millennials is “driving the growth,” which means the trend is likely to continue. Despite the increasing market share, the federal agencies that regulate the sale and advertising of cosmetics, the Food & Drug Administration (FDA) and the Federal Trade Commission (FTC), still have not formally defined the term “natural” as applied to cosmetics.
Problems with the Lack of Regulatory Guidance
The lack of a clear regulatory definition of “natural cosmetics” creates challenges for manufacturers as well as consumers, and the uncertainty has led to litigation. For example, a court recently granted final approval of a settlement in a class action against a cosmetics company, Tarte, Inc. The complaint alleged Tarte misled consumers through its purportedly deceptive advertising and marketing campaigns into believing its “high performance naturals” line of cosmetic products were natural, despite containing synthetic ingredients. Notably, the complaint did not allege that the products were advertised as “all natural” or “100% natural,” and conceded that the purportedly synthetic ingredients contained in the products were included on the label. It did allege that plaintiff would demonstrate through “surveys and other market research, including expert testimony,” that the term “natural” means the goods do not contain any synthetic ingredients and that consumers lack the ability to ascertain the true nature of the ingredients merely by reading the ingredients label.
The settlement eliminated the uncertainty, burden and expense of further litigation. The uncertainty many manufacturers of cosmetic products face stems largely from the lack of guidance available. New legislation introduced to Congress in November 2019, could change the legal landscape for future litigants and manufacturers of natural cosmetics.
The “Natural Cosmetics Act” Could Provide Some Much Needed Guidance
The new bill, the “Natural Cosmetics Act,” seeks to amend the Federal Food, Drug, and Cosmetic Act to define the terms “natural” and “naturally derived ingredient” as they relate to cosmetics. The bill defines the term “natural” as “any chemical substance that is naturally occurring and which is (i) unprocessed; (ii) processed only by manual, mechanical, naturally derived solvent or gravitational means, by dissolution in water or steam, by flotation, or by heating solely to remove water; or (iii) extracted from air by any means.”
The term natural does not include petroleum and petroleum-derived ingredients. The term “naturally derived ingredient” is defined as:
- “(A) any substance where the starting material is of mineral, plant, microbe, or animal origin but has been chemically processed;
- (B) any substance where the starting material is of mineral, plant, microbe, or animal origin but has been chemically processed and combined with other ingredients, excluding petroleum and fossil fuel-derived ingredients; or
- (C) an ingredient that is derived from a plant feedstock and bio-manufactured using processes like fermentation, saponification, condensation, or esterification in order to improve performance or make the ingredient biodegradable or sustainable.”
The legislation provides that any cosmetic product that includes the term “natural” in its packaging or labeling is misbranded unless the cosmetic contains: at least 70% natural substances (excluding water and salt); no fragrance ingredients other than natural substances or naturally derived ingredients; and aside from natural substances and water, contains only naturally derived ingredients, except to the extent a naturally derived ingredient “is not available for a specific function” or “is otherwise not feasible.” The proposed bill includes labeling requirements if the term “natural” is used in connection with one or more ingredients and prohibits certain manufacturing processes.
The bill, as currently written, provides helpful guidelines such as defining the term natural and specifying the required percentage of natural substances and identifying processes that are prohibited. But, it leaves some important questions unanswered. Most notably, the provisions that the cosmetic product contain only natural substances or naturally derived ingredients “except to the extent a naturally derived ingredient is not available for a specific function,” or “is otherwise not feasible,” are ripe with the type of ambiguity surely to result in litigation.
Nevertheless, with some fine-tuning, the new bill—if enacted—might provide some consistency in terms of how courts deal with “natural” false advertising claims in the cosmetic context going forward. It could also help companies avoid future litigation by providing a roadmap for those that want to advertise their products as “natural.” Perhaps this bill will provide the type of transparency both consumers and manufacturers are seeking with respect to their natural cosmetic products. However, it remains to be seen if the proposed bill will become law and if so, what ultimate form it will take. After being proposed, it was referred to the House Committee on Energy and Commerce where it remains today.