NEW YORK (AP) -- PepsiCo Inc. said it will no longer label its Naked juices as being "all natural," after a lawsuit complained that the drinks contain ingredients that don't fit that bill.
The company, based in Purchase, N.Y., also agreed to pay $9 million to settle the lawsuit.
In an emailed statement, the company said it uses an "added boost of vitamins" in some of the drinks. But a lawsuit filed against the company noted that the vitamins are actually synthetic ingredients, including a fiber made by Archer Daniels Midland.
PepsiCo did not respond when asked whether those synthetic fibers are in fact included in the juices. The company's statement said it will drop the use of the word "natural" until there is more regulatory guidance around the world.
A hearing for the settlement is scheduled for Monday and has not yet been approved by a judge, noted Shirish Gupta, an attorney who's representing a plaintiff in one of the lawsuits filed against PepsiCo's Naked juices.
Gupta noted that the settlement was reached by a different attorney who was negotiating on behalf of several similar cases. Gupta's firm plans to oppose the settlement, in part because he feels the method of notifying affected customers wouldn't reach a broad enough audience.
The case highlights the confusion around the use of the word "natural" in in the industry. The Food and Drug Administration doesn't currently have a definition for what constitutes a natural product. But it says that it doesn't object to the term's use if the food doesn't have "added color, artificial flavors or synthetic substances."
Notably, the FDA said it's difficult to define a food product that is natural, since it has likely been processed and is no longer a "product of the earth."
Michele Simon, a public health lawyer and critic of food industry marketing practices, noted that there are numerous cases making their way through the legal system because of food companies' use of the word "natural." She said the PepsiCo case was notable because the company was in essence addressing the murkiness of the word with the settlement.
"This company is basically surrendering the use of the offensive, deceptive marketing term," Simon said.
One of the lawsuits against PepsiCo noted that the company cultivates a "healthy and socially conscious image" to boost sales of the drinks, which typically cost around $4 a bottle. It noted that PepsiCo knew its target market would be willing to pay more for natural drinks that are 100 percent juice and free of genetically modified organisms.
The lawsuit also claimed that PepsiCo used genetically modified organisms in its Naked juices. In its statement, the company denied that claim and said its drinks will continue to be labeled "non-GMO." It said it plans to enlist a third-party to confirm the non-GMO status of the juices.
PepsiCo did not say when it planned to make the labeling changes in line with the settlement, reached earlier this month. On Friday, the website for Naked Juices still showed bottles with the words "all natural" on them.
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- Consumer Discretionary