Healthy food and beverage (F&B) companies frequently use social media for advertising. When used properly, social media campaigns can be a highly effective tool to help emerging F&B companies reach their target consumers, create buzz, and drive sales. Because social media is informal, it's easy to forget that a brand's social media posts are subject to the same advertising rules as traditional advertising such as TV commercials and print ads.
But that's just a post!
All advertising, including social media posts, must be truthful and not misleading to consumers. The Federal Trade Commission (FTC) and the Food and Drug Administration work together to investigate and take appropriate action against companies that violate these rules. Claims that food and beverage products improve health or reduce the risk of disease often pique the interest of authorities. Emerging food and beverage companies must accurately represent the nature, ingredients, and intended effects of their products in their advertising. Claims that a product has specific health benefits must be supported by scientific research.
For example, health company Teami LLC once claimed: “For centuries, tea has been used in alternative medicine to treat everything from cancer to constipation, providing all the vitamins and minerals the human body needs. To protect against infection and disease, Teami Profit ingredients have been proven to: …fight cancer cells.” The FTC cited this statement and over a dozen other claims in its lawsuit against Teami for making false health claims that its teas could help consumers lose weight, prevent cancer, treat colds, and ward off the flu. Teami had no credible scientific evidence to support its claims, and was ultimately required to pay damages. The company assessed roughly $1 million in fines and refunds to consumers who purchased its tea.[1]
Influencers should always disclose their affiliation to brands
Food influencers are extremely popular on social media and help emerging food and beverage companies attract and retain customers. Influencers engaged in marketing products must comply with the FTC's transparency and disclosure rules. If an influencer fails to comply with these requirements, companies that improperly market their products may be subject to fines or penalties as a result.
Influencers must also disclose “material connections” to brands to avoid false advertising. Certain material connections shouldn't be surprising: Influencers should tell their audience if they have a personal, family, employment, or financial relationship with a company whose products they're talking about. But some material connections are less obvious than others: Influencers must disclose if they received free or discounted products, endorsements, or other benefits from a company. In the Teami lawsuit, the FTC alleged that social media influencers hired by Teami failed to properly disclose their connections to Teami.
Disclosures should be clear and simple for your target consumers to see and understand. Statements like “Thank you to Brand X for this delicious drink” are inappropriate because they are ambiguous. This statement could mean that the influencer is thanking the brand for producing the delicious drink, or that the influencer received the drink for free. A better approach would be “Brand X sent me a complimentary case of this delicious drink.” This type of statement clearly communicates that the influencer received the product for free.
Disclosures must be “prominent,” meaning for video streaming platforms, they must appear on-screen long enough to be read and spoken at an understandable pace. If a disclosure is used in a post's caption, it must appear before an ellipsis or “Learn More” button. In addition to disclosure statements, brands should also consider using platform tools to identify sponsored content, such as Instagram's “Paid Partnership” tag or TikTok's “Branded Content” toggle.
Please note: each post is an independent advertisement, which means the required disclosures are every Posts made by influencers on behalf of F&B companies. According to the FTC, even relatively modest engagements such as tagging, liking, pinning, and similar ways of showing support for a brand or product can be considered endorsements subject to disclosure rules.
Do not post creative content without permission
Businesses that advertise on social media should also understand basic principles of copyright law to avoid copyright infringement. The creator of a creative content (photo, image, video, blog post, etc.) typically owns the rights to that creative work once it is fixed in a tangible medium (“posted”). If a business intends to use someone else's work as part of its marketing strategy, it must always get the creator's explicit permission. For example, a food and beverage company should not repost images or videos of third parties eating, drinking, or reviewing their products unless it has permission from the content creator to use their work. Simply giving credit to the content creator for the content is not enough and is a common misconception. When reposting content created by other social media users, businesses should always use their own content unless they have received prior explicit permission to use someone else's creative work.
Conclusion
Social media marketing is a proven and powerful tool for emerging food and beverage companies to increase brand awareness and attract and retain customers. Although social media marketing can be highly beneficial, it also comes with legal risks. Companies can avoid costly mistakes by understanding and paying attention to these risks.
If you need assistance, please ask the author or your Foley representative.
[1] https://www.ftc.gov/legal-library/browse/cases-proceedings/182-3174-teami-llc
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