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In suing Blue Buffalo Co. this week over false and disparaging advertising claims, NestlÃ© Purina PetCare threw down the gauntlet in terms of competitive marketing claims. Does Purina have a case â€“ and perhaps more significant, if it does, could this be just the first step in a sea change in how petfoods are labeled and marketed? (Not to mention formulated.)
At the heart of Purinaâ€™s lawsuit lie Blue Buffaloâ€™s claims that their products contain no chicken or poultry by-products or meals and no corn. Yet Purina says that testing performed by â€œindependentâ€ labs shows quite the opposite. Not surprisingly, Blue Buffalo â€œcategorically deniedâ€ the allegations made in the lawsuit and vowed to â€œdefend the integrity of its brand and its products,â€ the company founder and chairman, Bill Bishop, said in response to the legal action.*
Perhaps Blue Buffalo actually threw down the first gauntlet in how it made those claims: by making indirect (in its TV and other advertising) and direct (on its website) comparisons to competitive products, including Purinaâ€™s. In fact, in March, the National Advertising Division (NAD), the investigative arm of the self-regulating US advertising industry, recommended changes to some ofÂ Blue Buffaloâ€™s advertising claimsÂ and to its online True Blue Test, in which it invites consumers to compare other brands to its own.
At the time, Blue Buffalo said it would make the recommended changes to the online test, though itâ€™s difficult to tell fromÂ the companyâ€™s websiteÂ today if that has happened. Yet Blue Buffalo disagreed with NADâ€™s findings for its advertising claims and said it would appeal them to the National Advertising Review Board.
In a supposedly exclusive interview with Adam Samson ofÂ FoxBusiness.comÂ about the lawsuit, Bishop portrayed his company as David having to fight off the Goliath of Purina, even saying that Blue Buffalo is one-hundredth the size of NestlÃ©. That may be true if he was referring to the parent company of NestlÃ© Purina PetCare; otherwise, his numbers donâ€™t match up. According to ourÂ Top Petfood Companies Database, at the end of 2012 (the most recent date for which full data are available), Purinaâ€™s global petfood sales totaled about US$16.2 billion, while Blue Buffaloâ€™s totaled US$730.4 million. (Both figures were obtained from Euromonitor International.)
That is quite a difference but not a hundred-fold. Note that since Blue Buffalo is a privately held company, Euromonitorâ€™s sales data might be an estimate. Which might also be the case for Purinaâ€™s sales, which Samson claimed were only US$12.83 billion globally last year (and NestlÃ© is a publicly traded company, go figure). But no one, even Blue Buffalo, denies that the companyâ€™s sales have grown rapidly over the past few years. â€œWe became the fastest growing petfood,â€ Bishop claimed in his interview with Samson. Euromonitor pegged the companyâ€™s growth at nearly 13% from 2011 to 2012 and nearly 24% the year before. No doubt the rate has continued in the double digits.
The question that Purina and other petfood companies are now asking is if that growth came about at least partially because of false and misleading advertising claims. NAD investigated Blue Buffaloâ€™s advertising because of a complaint fromÂ Hillâ€™s Pet Nutrition. One can imagine that the folks there are watching this weekâ€™s legal developments with a great deal of interest.
As should the entire petfood industry, because if the lawsuit goes forward and Purina proves its case on even one of the allegations, it could affect theÂ labeling of petfoodsÂ in the US. The Food and Drug Administration (FDA) is already seemingly turning its attention to the Food and Drug Administration Amendments Act of 2007, which mandated regulations addressing petfood ingredient standards and definitions, processing standards and updated standards for labeling. Those have not yet come to pass, especially with FDA focusing on the Food and Safety Modernization Act, but as the agency reviews its memorandum of understanding with the Association of American Feed Control Officials on petfood ingredient definitions and approvals, this type of laser focus on label claims could also grab its attention, too.
*Update: After this post went live, Blue Buffalo released another statement, on the afternoon of May 8, saying they plan to countersue Purina.