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Dive Brief:
California cannot prohibit vegan dairy company Miyoko’s Kitchen from using the terms “butter,” “lactose-free” and “cruelty-free” on its packaging, U.S. District Judge Richard Seeborg ruled last week. Miyoko’s Kitchen sued the California Department of Food & Agriculture in February, after the department told the company to stop using those terms because her butter is not a dairy product and the labeling caused confusion for consumers.
The judge also ruled the vegan dairy company could not continue using the terms “hormone-free” and “revolutionizing dairy with plants,” saying those terms were “plainly misleading.”
“The state’s showing of broad marketplace confusion around plant-based dairy alternatives is empirically underwhelming,” Seeborg wrote in the ruling. He noted Miyoko’s Kitchen is entitled to label its products as “butter” under the protection of the First Amendment. Although this ruling was issued, the case as a whole has not been dismissed.

Dive Insight:
In his ruling, Seeborg explained the question was not whether the use of the word “butter” violated the U.S. Food and Drug Administration’s standards of identity — which stipulate that butter must contain 80% milkfat — but whether the word, when accompanied closely by terms such as “vegan” and “made from plants,” amounted to misleading commercial speech. He said the state was unable to produce testimony from consumers who were tricked by the word “butter” on Miyoko’s vegan spread.
This is not the first time a judge has ruled consumers are not confused by plant-based manufacturers using terms traditionally associated with animal products. After a law was passed in Mississippi that would have banned the use of traditional meat terminology on alternative products, the Plant Based Foods Association and Upton’s Naturals sued the state. The lawsuit was voluntarily dismissed on the same day the law took effect, after the plant-based group and food company worked with the state to revise the regulations. Plant-based meat companies in Mississippi can use the traditional terminology as long as the label also includes language to ensure consumers know the product is plant-based. A similar lawsuit over a meat labeling law in Arkansas is pending, but the judge has delayed the law’s enforcement until it is decided.
While the most recent labeling lawsuits have been more meat-based, the issue over labeling plant-based dairy was litigated several times a bit farther in the past. Seeborg drew on previous rulings in dairy labeling cases to arrive at his decision. He cited a 2013 ruling from a case involving plant-based dairy producer Whitewave Foods, now owned by Danone. “It is simply implausible that a reasonable consumer would mistake a product like soymilk or almond milk with dairy milk from a cow,” the Whitewave ruling states, and “even the least sophisticated consumer[] does not think soymilk comes from a cow.”
Research tends to bear out these judicial opinions. Last year, Linkage Research & Consulting noted 87% of participants in an FDA survey about the meaning of terms such as “milk” and “cheese” said they weren’t confused by current plant-based labels. In fact, 76% of the total responses to the survey were in favor of allowing plant-based products to use traditional dairy terms.
Still, even with popular opinion and the judicial system supporting the de facto labeling convention of using terms from animal-based products for plant-based alternatives, the FDA has yet to officially change its standards of identity.  
Standards of identity govern the ingredients that can be used in foods that carry certain labels. The purpose is “to promote honesty and fair dealing in the interest of consumers,” according to the FDA. However, many of these legally enforceable food standards were created in the middle of the 20th century, leaving them with outdated ingredient lists, leading to criticism that these regulations stifle creativity. To address these complaints, the FDA is moving toward revamping how standards are enacted, updated and revoked. At the beginning of the year, the government department collected comments on an update to the regulations governing the standards that was proposed and not acted on in 2005. No action has yet been taken.  
Products that mimic animal-based dairy are in high demand. According to statistics from SPINS, U.S. retail sales of plant-based foods rose 11.4% last year, for a total market value of $5 billion. In this fast-growing segment in which dollar sales jumped 29% during the last two years, plant-based dairy has been a major driver. Last year, cheese sales rose 18% and creamers were up 34%.
Such a huge market is undoubtedly going to attract new startups and innovation into the space, and how they are labeled is important. With another ruling supporting the use of words like “dairy” and “butter” in plant-based applications, it gives upstarts more confidence as they enter the segment and look to take on more established animal-based brands.

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