A federal court in Sacramento, Calif. has barred the state’s Attorney General from filing new lawsuits to enforce a requirement for a cancer-related warning involving acrylamide in food and beverages.

In an order dated March 29, Chief U.S. District Judge Kimberly Mueller entered a preliminary injunction that applies to the AG and its employees, as well as private entities that want to enforce Proposition 65.

Lawyers whose firm represented the plaintiff in the case—the California Chamber of Commerce—lauded the decision.

“The court's ruling stops hundreds of enforcement actions in their tracks, bodes well for the ultimate end of Proposition 65 acrylamide lawsuits and has implications for other listed chemicals,” Arnold & Porter attorneys Sarah Esmaili and Vanessa Adriance wrote in a blog.

Raphael Metzger, an attorney who represents the Council for Education and Research on Toxics (CERT), said his law firm has appealed the preliminary injunction to the U.S. Court of Appeals for the Ninth Circuit. CERT intervened in the case as a defendant and has filed many lawsuits under Prop 65, which became law in November 1986 and is also known as the Safe Drinking Water and Toxic Enforcement Act of 1986.

The office of California Attorney General Rob Bonta is not appealing the case since the deadline for filing an appeal passed Thursday, according to Trent Norris, an Arnold & Porter lawyer in San Francisco, who represented the California Chamber of Commerce. That same day, however, an organization that is not presently a party to the case—Chemical Toxin Working Group Inc. (CWTG), a private enforcer of Prop 65—requested permission in the U.S. District Court to file an appeal of Mueller’s order to the Ninth Circuit.

Prop 65 requires businesses to provide warnings to Californian residents about significant exposures to chemicals that cause cancer, birth defects or other reproductive harm. Many businesses—including those in the food and beverage sector—are not especially fond of the law because it’s frequently the source of demand letters and litigation from private plaintiffs over cancer warnings.

“Acrylamide has been a prime target for Proposition 65 enforcement,” Esmaili and Adriance wrote. “Since 2002, private enforcers have served more than one thousand pre-litigation notices of violation concerning acrylamide in food and beverage products, reaping millions of dollars in settlements.”

Acrylamide was first found in food in 2002; it may occur naturally and forms due to a reaction between sugars and asparagine—an amino acid that naturally occurs in many foods, according to Mueller’s 31-page court order. The judge, who presides over the U.S. District Court for the Eastern District of California, pointed to an unresolved scientific debate whether acrylamide increases the risk of cancer in humans.

Mueller held the state of California failed to establish the Prop 65 warnings about acrylamide in food are constitutional under a First Amendment case decided in 1985 by the nation’s highest court. In Zauderer v. Office of Disc. Counsel, the U.S. Supreme Court established the rule that government-compelled disclosures in commercial speech must be factual and non-controversial.

“In short, the safe harbor warning is controversial because it elevates one side of a legitimately unresolved scientific debate about whether eating foods and drinks containing acrylamide increases the risk of cancer,” Mueller wrote in her order. “The state has not carried its burden to show Proposition 65 warnings about acrylamide in food are constitutional under Zauderer.”

Mueller also found the California Chamber of Commerce is likely to show a Prop 65 acrylamide warning falls short of another First Amendment test articulated by the Supreme Court in another case, Central Hudson Gas & Elec. v. Public Svc. Comm'n.

The safe harbor warning “implies misleadingly that the science about the risks of food-borne acrylamide is settled,” Mueller wrote. “In setting the statewide rules applicable to all, state regulators have also rejected alternative, less controversial language than the safe harbor language. If a business decides not to use the safe harbor warning, it risks expensive and lengthy litigation against private enforcers or the state, and defendants carry heavy evidentiary burdens if they attempt to show their products contain permissibly small quantities of acrylamide.”

Although Mueller granted the California Chamber of Commerce’s motion for a preliminary injunction, she described the requested injunction as “quite narrow.”

“It leaves private parties and the state with many tools for increasing public awareness about the risks of acrylamide in foods,” she wrote. “CERT and other private enforcers can send demand letters and notices of violation. They can litigate existing claims and pursue appeals.”

The judge added her “order does not alter existing consent decrees, settlements or other agreements.” For instance, she explained, a business that previously agreed to display a certain warning related to acrylamide cannot take it down.

According to the California Chamber of Commerce, local businesses have been compelled to provide Prop 65 warnings on food and beverages, based on unproven science and the expense of litigation.

The recent “ruling vindicates the bedrock requirement that, before requiring anyone, including businesses, to say something they disagree with, the government must ensure that the statement is purely factual and non-controversial,” the chamber stated in a March 30 press release. “Prop 65 warnings for acrylamide in food do not meet that standard.”

Bonta’s office did not respond to a request for comment on the ruling.

In her order, Mueller also denied a motion by CERT for summary judgment. The Ninth Circuit this week issued an expedited briefing schedule for an appeal in the case, according to Metzger.

CERT believes Mueller shouldn’t have granted the preliminary injunction because, in part, “the order itself constitutes an unconstitutional prior restraint on CERT’s free speech and petition rights under the First Amendment,” Metzger told Food & Beverage Insider.

Mueller had rejected CERT's argument about prior restraint.

"An injunction barring enforcement through litigation would admittedly dull the teeth of a demand letter or notice for the injunction's duration," she wrote in her order. "Without a legal threat, a recipient may not negotiate or even respond. But the injunction the Chamber requests today would not forbid letters and demands, so it would not be a prior restraint on speech." 

According to Norris, CERT was unable to produce legal authority to show the requested injunction—barring the filing of new Prop 65 lawsuits over acrylamide in food and beverages—constitutes a prior restraint on the group’s First Amendment rights.

“No court has ever agreed with them on that, and when asked for authority on that point, they have none,” Norris said in an interview.

Beyond the prior restraint argument, Metzger said the judge did not address the testimony of several senior scientists from federal agencies introduced at a three-month trial in 2014. Following the trial, a Los Angeles court “rejected the very [First Amendment] claim [being] asserted by the California Chamber of Commerce in this case,” according to CERT's attorney.

In a "statement of decision on trial" published in 2015, L.A. County Superior Court Judge Elihu M. Berle rejected the defendants’ argument that a Prop 65 warning for acrylamide in coffee would violate their First Amendment rights.

“We are confident that the Ninth Circuit will reverse the preliminary injunction,” Metzger said.

Berle’s ruling “is by no means a searching review of the legal or factual issues, in contrast to Judge Mueller’s decision,” and it was made “moot” thanks to a subsequent state regulation that exempts coffee from Prop 65 warnings for heat-formed chemicals like acrylamide, Norris said in an email.

In the interview, the chamber's lawyer stressed the testimony of CERT’s scientific experts doesn’t change the fact that a controversy remains whether acrylamide in food causes cancer in humans.

“Regardless of what information CERT submits to the court making its point about its side of the controversy, the fact remains that there is a controversy,” Norris said. “The district court does not need to decide that controversy under the First Amendment standard. The district court just needs to decide that there is a controversy—and that’s pretty easy in this case.”

 

The acquisition is aligned with Olam’s vision and accelerates its growth strategy of delivering sustainable, natural, value-added food and beverage ingredients and solutions. The acquisition will be transformative for Olam’s spices business, which is an attractive and growing part of its overall portfolio. It will also create a substantive growth platform for Olam to provide similar sustainable and innovative retail solutions across its other products.

“This transaction builds on our long 15-year partnership with Olde Thompson and is a logical move to combine our ‘back-end’ strengths in global origination and sustainable supply chains, with Olde Thompson’s ‘front-end’ capabilities in providing retail spice solutions to many major US retailers,” said OFI CEO A. Shekhar said.

Shekhar noted growth Olam’s private label solutions’ portfolio is key to the company’s growth and will enable Olam to offer a comprehensive range of bold, authentic, natural taste and flavors with end-to-end traceability.

Established in 1944, Olde Thompson has two highly automated bicoastal facilities in Bayonne, New Jersey and Oxnard, California. The company has built a significant formulation, blending, packaging and distribution capacity to serve customers across the nation. It has also built long-term relationships with a diverse group of blue-chip retail customers across the club, mass, grocery, discount and dollar store channels.

Commenting on the deal, Olde Thompson CEO David Sugarman said: “The acquisition of Olde Thompson by OFI is a terrific outcome for all of our key stakeholders. For our customers, this partnership pushes Olde Thompson to the forefront of sustainable innovation as it provides access to OFI’s extraordinary international sourcing capabilities and spice expertise that will allow us to provide a new level of traceability and transparency to the marketplace. Our employees will benefit from additional resources and opportunities that will accelerate our growth and their careers even further.”

Greg Estep, CEO of Olam’s spices business, said Olde Thompson’s senior executive leadership will continue at the helm, supported by dedicated teams who are domain experts in the retail space and committed to operational excellence and customer service.

Food & Beverage Insider insights

Consumers are taking their dining cues from fiery and authentic flavors offered by Latin, Asian, African, Italian and Indian cuisines, and seeking a variety of flavor experiences from all sources, from food trucks to processed foods. Millennials and Gen-Xers drive demand for unique flavor, although 65% of all consumers like trying new flavors on occasion. More than 6,000 new product launches featured global flavors in 2016—a number that has consistently increased year over year.

The past few years have witnessed a lot of movement in the natural flavors and colors space. In January, McCormick & Co. Inc. acquired FONA International for $710 million in cash. The deal accelerated the company’s flavor growth and strengthens its leadership in clean and natural flavors.

On Feb. 1, International Flavors & Fragrances (IFF) completed its $26 billion merger with DuPont’s Nutrition & Biosciences. The deal created global reach and enhanced capabilities that will enable the creation of innovative solutions to respond to customer demands and increasing consumer preferences for natural, healthier and “better for you” products in the food & beverage, home & personal care, and health & wellness markets. The deal follows its 2019 acquisition of Israel-based Frutarom for a US$7.1 billion cash and stock deal that accelerated its Vision 2020 strategy to create a global leader in taste, scent and nutrition.

In 2018, Givaudan acquired Naturex, a manufacturer and marketer of plant-based specialty ingredients for the food, health and cosmetic industries, in a two-part deal that amounted to approximately US$1.6 billion.

The Upcycled Food Association (UFA) introduced a new certification mark, providing consumers for the first time with clear guidance about the presence of upcycled food ingredients in food, beverages, cosmetics, pet food, personal care products, household cleaners and dietary supplements.

UFA is a non-profit focused on reducing food waste by growing the upcycled food economy. It was created in 2019 by upcycled food companies themselves, who recognized the power of collaboration in growing a successful food category and environmental movement.

According to Project Drawdown, eliminating food waste is the single-most effective act people can take to reduce greenhouse gas emissions, the seal offers simple and concrete steps toward mitigating climate change.

“The upcycled certification seal is transformative for centralizing the messaging around upcycled food. We want consumers to see the mark and immediately understand not only what upcycled food is, but more importantly, the impact upcycled food has from a climate perspective,” said Caroline Cotto, UFA board president. “Purchasing upcycled food puts the power back into the hands of consumers to make a tangible reduction in global food loss.”

Research shows that consumers already are keen to reduce food waste. A 2021 study published in the journal Food and Nutrition Sciences shows that 80% of consumers, once educated about upcycled foods, say they would seek upcycled food purchases. Unfortunately, only 10% of consumers are familiar with upcycled food products. One goal of the seal is to dramatically expand awareness about upcycled food—what it is, and why its presence in products matters for the environment and climate.

“Food waste accounts for 6% of all human-caused greenhouse gases. Mitigating it counts as the single-most productive thing people can do to dial-back climate change,” said UFA co-founder and CEO Turner Wyatt. “In addition, businesses around the world lose $1 trillion a year to food waste. This seal and the certification program backing it will simultaneously help solve the food-waste problem while saving businesses money. It also nurtures the creation of new businesses revolving around upcycled foods. Everybody wins.”

The upcycled food industry has enormous economic potential. In 2019 Future Market Insights estimated the current value of the upcycled food industry at $46 billion, with a predicted 5% compound annual growth rate. With a broad consumer education campaign about the seal and food waste, the UFA hopes to quickly double the industry’s growth rate. Doing so could prevent more than 8.8 billion pounds of food waste and 28 billion pounds of carbon emissions by 2030, according to the UFA.

The UFA turned to mission-aligned branding agency Modern Species for the crafting of the seal. Both the UFA and Modern Species are members of 1% for the Planet; Modern Species used its annual contribution to the fund to donate its seal-crafting services to the UFA.

Brands can choose from a horizontal or vertical mark based on what fits best on a given product's package.

Additionally, Drexel University and food and beverage design and development firm Mattson contributed robust consumer research to the creation of the seal. Drexel’s consumer research tested the various mark designs that led to the final seal. Mattson’s research showed more than 50% of consumers had increased intent to buy Upcycled Certified foods when the mark was on packaging, already ranking better than other product certifications on the market.

The seal follows more than ome year of intense collaboration between multiple stakeholders to develop the Upcycled Certification Standard. The Standard offers a rigorous set of rules establishing definitions for upcycled ingredients and products, protocols for incorporating them into products, and the ability for certified companies to use the new consumer-facing upcycled food seal on products.

The Upcycled Certification Program is the world’s only third-party certification program for upcycled food ingredients and products. The Program’s intentions are strengthened by the credibility of the Upcycled Certification Standard and the expertise of the third-party certifier, Where Food Comes From. Open enrollment to apply for certification is slated to begin in June 2021.

“If the UFA is the landmark of the upcycled food movement, we intend this new logo to be our flag,” said Dan Kurzrock, co-founder and executive board officer of UFA and the Upcycled Food Association. “We can’t wait for certified products and ingredients around the world to fly it at full mast soon.”

There’s good news for the coffee industry: According to a recent study published in Molecular Psychiatry, a morning cup of joe may not only help keep someone awake, but have other positive impacts on the brain as well (2021).

For the study, researchers from the University of Minho School of Medicine in Portugal recruited 32 coffee drinkers (CD; defined as consuming one or more cups of caffeinated coffee per day) and 24 non-coffee drinkers (NCD). According to the study’s authors, “Resting-state functional magnetic resonance imaging (fMRI) was acquired in these volunteers who were also assessed regarding stress, anxiety and depression scores.” The volunteers were then studied for functional connectivity (FC) within the brain, as well as the overall structure of the brain.

According to the authors, the study revealed, “In the neuroimaging evaluation, the CD group showed decreased functional connectivity in the somatosensory and limbic networks during resting state as assessed with independent component analysis. The CD group also showed decreased functional connectivity in a network comprising subcortical and posterior brain regions associated with somatosensory, motor and emotional processing as assessed with network-based statistics; moreover, CD displayed longer lifetime of a functional network involving subcortical regions, the visual network and the cerebellum.”

This decreased connectivity found in the right precuneus and right insular area of the brains of coffee drinkers suggests improved motor control and better levels of alertness within that group. Increased activity in other areas of the brain suggest improved ability to focus, remember and learn new information. Perhaps most importantly, these effects could accurately be traced back to coffee; when the NCD group consumed a cup of coffee, similar results were seen.

“This is the first time that the effect that drinking coffee regularly has on our brain network is studied with this level of detail,” Nuno Sousa, president, University of Minho School of Medicine in Portugal, wrote. “We were able to observe the effect of coffee on the structure and functional connectivity of our brain, as well as the differences between those who drink coffee regularly and those who don’t drink coffee, in real time.”

The news wasn’t all good for the world’s estimated 1 billion coffee drinkers, however; higher levels of stress were found among routine coffee drinkers than in those who don’t drink coffee. Given the inherent functional benefits of coffee and other naturally caffeinated beverages, new and innovative products utilizing ingredients like coffee and tea with added boosts like pre- and probiotics and mineral fortification should continue to grow in popularity, both in the U.S. and abroad.

PepsiCo, Ingredion partner to reduce carbon emissions, improve water quality

PepsiCo Inc. and Ingredion entered a partnership with Soil and Water Outcomes Fund to help farmers adopt conservation practices that generate verifiable carbon reductions and water quality improvements. In 2021, the partnership will encompass a target of 20,000 acres of cropland in Northern Illinois, an important supply-shed territory for both corporations.

The Soil and Water Outcomes Fund provides financial incentives directly to farmers who transition to on-farm conservation practices such as no-till and cover crops that yield outcomes like carbon sequestration and water quality improvement. The resulting verified environmental outcomes are sold to a diverse group of public and private beneficiaries, including corporations like Pepsi and Ingredion, municipalities, state departments of agriculture, and the federal government.

“Ingredion is committed to making a meaningful difference as we work to make life better, so it is fitting that we focus our sustainability initiatives on practices that make a positive impact on the world,” said Andy Utterback, senior manager of sustainability at Ingredion. “By collaborating with our customers and stakeholders, Ingredion can assist growers in adopting regenerative agriculture practices that increase the resiliency of their operations and ensure the stability of our agricultural supply chain.”

PepsiCo recently accelerated its science-based climate goals, including a focus on its agricultural value chain, and announced an ambitious commitment to spread the adoption of regenerative farming practices across more than 7 million acres by 2030. Ingredion continues to prioritize agricultural sustainability and water management as part of its 2030 All Life sustainability strategy to make life better.

PepsiCo and Ingredion join Cargill and Nutrien Ag Solutions as pioneering companies working to “inset” corporate emissions by partnering with the Soil and Water Outcomes Fund to empower farmers in key regions to mitigate climate change, regenerate soils, and improve water quality. In 2021, the Soil and Water Outcomes Fund plans to expand to more than 100,000 acres of cropland across Iowa, Ohio, Illinois and the Chesapeake region. This expansion will significantly increase opportunities for farmers to be compensated for implementing conservation practices that produce verified environmental outcomes.

The Soil and Water Outcomes Fund is a partnership of AgOutcomes, a subsidiary of the Iowa Soybean Association, and ReHarvest Partners, a subsidiary of Quantified Ventures.

SunOpta acquires plant-based brands Dream and WestSoy for $33 million

SunOpta Inc. announced the $33 million acquisition of the Dream and WestSoy plant-based beverage brands from The Hain Celestial Group Inc. The Dream and WestSoy brands add to SunOpta’s Plant-Based Foods and Beverages segment, further accelerating growth in the competitive sector.

The Dream brand is the No. 2 brand of shelf-stable, plant-based milks, originally launched in 1982. SunOpta currently produces approximately 50% of the Dream product portfolio and has done so for over a decade. The WestSoy brand is the only branded shelf stable soy beverage with a USDA organic certification and the American Heart Association certification of a heart-healthy product. SunOpta currently produces the entire WestSoy product portfolio.

Diageo acquires Loyal 9 Cocktails

Diageo has acquired Loyal 9 Cocktails, a Rhode Island-based ready-to-drink (RTD) spirits brand, from Sons of Liberty Spirits https://www.loyal9cocktails.com/Co. Launched in 2018, Loyal 9’s vodka-based RTD cocktails combine full-flavor lemonade with high-quality ingredients and 9% ABV. Loyal 9’s canned cocktails are gluten-free, produced with 100% fruit and available in three flavors— Lemonade, Mixed Berry Lemonade, and Watermelon Lemonade.

With a retail sales value of more than US$7.8 billion in 20191, ready-to-drink (RTD) is the fastest growing category in total beverage alcohol in the United States, growing 20% between 2016 and 2019.2 RTDs have increasingly gained momentum in the United States over the last year, driven by consumer interest in enjoying cocktails at home and demand for a range of drinks in convenient formats that are ideal for casual and at-home occasions.

Diageo’s spirits-based RTD portfolio includes recently launched spirits-based RTD innovations such as Crown Royal Ready to Drink Cocktails, Tanqueray Crafted Gin Cocktails and Ketel One Botanical Vodka Spritz.

CP Kelco launches online resource focused on innovation, power of nature

CP Kelco launched a new multimedia resource—“Innovation … Powered by Nature”—designed to help manufacturers in the food, beverage, home and personal care segments understand market trends and navigate a changing industry landscape through problem-solving and collaboration.

Using nature-powered innovation, CP Kelco’s portfolio is evolving to help meet consumer expectations—from clean label and sustainability to the plant protein megatrend and even the economic impact of the pandemic. CP Kelco also looks at what manufacturers need to have their eye on to pivot for the future including enhanced focus on health and wellness; new processes and technologies; sustainable sourcing and production; and new functional ingredients and applications.

“The industry needs partners to be agile, growth-minded and passionate about anticipating market needs,” said Jérôme Béra, senior vice president, Global Marketing. “Innovation happens when we’re collaborating with customers to envision what’s ahead and can tailor solutions to develop new products that meet—and even exceed—consumer expectations. Our new resource is focused on helping companies remain competitive in today’s innovation-driven business landscape.”

Vejii to acquire Vegan Essentials

Vejii Holdings Inc., which operates ShopVejii.com, a leading North American online vegan marketplace, has signed a $1.4 million definitive agreement to acquire Veg Essentials LLC, which operates VeganEssentials.com, one of the largest and most established vegan marketplaces in the U.S.

Vejii’s management team intends to enhance operational efficiencies, margins and begin to launch paid advertising programs for Vegan Essentials to further scale the business. It also expects to see several synergies across both Vejii and Vegan Essentials by leveraging combined purchasing, resources, technology and warehouses leading to lower shipping and transportation costs.

The proposed transaction will provide Vejii with an established platform for continued expansion within the U.S. plant-based market that is complementary to its current e-commerce marketplace. Vegan Essentials has one of the longest digital presences and established domain authority in the U.S. for vegan search terms, which Vejii plans to leverage to support marketing campaigns for both brands leading to increased marketing awareness and rankings.

Commenting on the deal, Kory Zelikson, Vejii CEO, stated: “We believe that Vejji’s acquisition of Vegan Essentials provides an established asset to accelerate growth within the growing plant-based market and will solidify Vejii as the market leader for online plant-based sales within the US. Vegan Essentials joins the Vejii family with a loyal customer base, established supplier relationships, and distribution channels that will not only enhance Vejii’s ability to continue scaling in the US, but also help grow Vegan Essentials' reach with Vejii’s enhanced tech stack, and marketing experience”

Vejii’s management team brings extensive experience in the leading and scaling of online platforms. Following the successful completion of the transaction, the Vegan Essentials management team will continue to support the transition, driving consolidated distribution and day-to-day operations.

EverGrain, a sustainable ingredients company backed by Anheuser-Busch, and Bright Future Foods, a wholly-owned subsidiary of Post Holdings Inc., are collaborating to create new sustainable and climate-positive food solutions. This collaboration builds on Bright Future Foods’ first product launch and first ever climate-positive snack, Airly Oat CloudCrackers.

“We are thrilled to partner with Bright Future Foods on reimagining the food supply chain and developing products that are nutritious, great tasting and sustainable. They are pioneering new ways to help address climate change through food and we are proud to partner with them on that journey,” EverGrain CEO Greg Belt said.

“EverGrain’s innovative processes make its barley-based ingredients one of the most sustainable plant protein and fiber sources in the world, while Bright Future Foods is pioneering climate friendly snacking that starts with greenhouse gas removing grains and targeted sustainable agriculture practices. This collaboration allows us both to leverage our deep-rooted knowledge in agriculture and food processing to pioneer creative and sustainable new solutions for tackling the world’s most pressing sustainability challenges,” Bright Future Foods CEO Mark Izzo said.

Products developed within the climate-positive collaborative platform will be formulated using EverGrain’s circularly sourced barley protein and fiber and Bright Future Foods’ climate-positive oats. The companies have committed to new product launches that deliver great tasting snacks that are also great for the planet.

The collaboration comes less than one month after Anheuser-Busch announced it is investing $1 million to expand production of its EverGrain subsidiary that upcycles used barley from beer manufacturing to create barley-based ingredients that can be used in a variety of food and beverage products. The project is part of Anheuser-Busch’s recent announcement that it will invest $1 billion in its U.S. manufacturing capabilities through next year, including about $100 million for sustainability projects.