The lack of clarity in the natural products market has made it essential practice for brands to closely understand and observe marketing and labeling requirements.
Trends show an increased demand in recent years for natural products and ingredients in the dietary supplement and OTC market. The US alone delivered 9.5% growth in 2020. However, the term "natural product" is not legally protected.
According to common legal opinion, the degree of treatment or processing determines whether it is still a natural product or, for example, a foodstuff. Even if "natural product" has no legal basis, the legal requirements of the Unfair Competition Act (UWG) must be observed when marketing natural products. This is especially vital against the rapidly changing legalities surrounding cannabidiol-containing (CBD-containing) products.
As regulatory perimeters evolve with new medical studies and laws passed, brands must ensure they are amplifying consumer trust in the packaging and marketing lifecycle of their natural products. Working with a packaging partner who understands the legal requirements can ease this process.
Below, we’ll review and highlight the basic legal requirements—as well as the potential challenges—in the marketing of natural products.
Increased Demand for Natural Products.
A 2020 Deloitte report confirmed that consumers are more aware of the importance of a healthy lifestyles. Empowered consumers are placing more emphasis on their mental health and physical well-being while increasingly perceiving health in terms of disease prevention, well-being and radiant appearance, rather than focusing exclusively on treating illness.
As a result, demand for natural health products, nutritional and dietary supplements is on the rise in three primary areas.
“Good for you” food and ingredients.
In the food industry, two basic approaches are capitalising on the natural products trend. One is to leave food as natural and unprocessed as possible, which accounts for both ecological and sustainable cultivation methods, as well as regional and resource-saving supply chains.
The second approach is to create food with bioactive ingredients that give the food an additional benefit. These can be special bacteria to support the intestinal flora, or secondary plant substances to lower blood cholesterol levels.
A more natural look.
For the cosmetics sector, Statista has shown an increasing share of near-natural or natural cosmetics in the overall cosmetics market since 2012. Ingredients have been obtained from renewable raw materials for many years, however, renewable raw materials do not automatically mean ecological, as demonstrated by the ongoing discussion about the problems of palm oil plantations.
According to a consumer study, 31% of Germans attach importance to their body care products containing no chemical additives. This growing demand for natural products is met in the cosmetics industry vitamin and enzyme additives, such as folic acid and Q10, which have both been gaining popularity for quite some time.
The first written records of using medicinal plants for certain diseases were written more than 4,500 years ago in Mesopotamia, and many of these medicinal plants are still used today in herbal, wellness and medicinal teas.
A special type of natural medicinal products is the biopharmaceuticals sector. The biomolecules serving as active ingredients are so large that chemical production would be too complex and costly.
The share of biopharmaceuticals in the overall pharmaceutical market is constantly increasing, according to the Association of Research-Based Pharmaceutical Companies. In 2017, for the first time, more biopharmaceuticals were newly approved in Germany than chemically synthesised drugs.
Marketing Natural Products
It seems obvious to emphasise natural ingredients accordingly in advertising—which also includes the packaging labels—but the regulatory perimeters in this market are significant.
First, the UWG must be observed, which prohibits untrue or misleading statement about origin, composition or properties, including terms such as "nature", "natural", "natural", "close to nature".
The LMIV (Food Information Regulation) also prohibits the advertising of food with language that gives the impression that it can prevent, eliminate or alleviate diseases.
However, so-called health-related claims, such as reducing the risk of disease, are permitted. In order to prevent misleading or misuse, only formulations that have been scientifically tested and are explicitly listed and correspond to the wording in the Health Claims Regulation are permitted on packaging or in advertising.
Additionally, regulations must be observed for food supplements, especially with regard to the compulsory information on packaging. The Therapeutic Products Advertising Act stipulates that advertising for prescription-only medicinal products is only permitted for specialist circles. This regulation is also applicable to natural prescription medicinal products.
Products Containing Cannabidiol.
Cannabidiol (CBD) is extracted from the hemp plant and, unlike THC, has no psychoactive or intoxicating effect. While its positive properties, such as relaxation, pain relief, and anti-inflammation, have not yet been conclusively proven by recognised studies, products containing CBD are currently considered prescription drugs.
If the THC content is above 0.2 percent, it is classified as a narcotic with resulting legal consequences. This is also the reason for the assessment of the Federal Office of Consumer Protection and Food Safety (BVL) that "currently no case is known in which CBD would be marketable in foodstuffs or food supplements".
The European Commission's examination of whether products containing CBD are now classified as novel foods or medicinal products has not yet been completed. At present, CBD-containing products can only be marketed as aromatic oils or cosmetics with legal certainty.
Marketing CBD Products.
Until it’s clarified if products containing CBD are classified as novel foods or medicinal products, no statement can be made as to which laws and regulations will apply to the packaging and advertising in the future.
Currently, the German Drug Advertising Act (HWG) is decisive in any case. Without scientific studies on the efficacy of CBD, advertising with disease-related statements is prohibited and advertising is only permitted for specialist circles. However, as legal decisions continue to come through, brand must prepare for a reevaluation.
Especially in the case of natural products or product components, amplifying clear communication is essential to gaining and maintaining consumer trust, which is fragile and can be quickly damaged if a product has to be withdrawn from the market due to faulty labelling or prohibited advertising.
For this reason, it’s important to work with brand partners who are familiar with the relevant applications when designing the packaging and marketing campaigns. Brands that are able to provide a user-friendly, informative and seamless consumer experience can grow faster and more sustainably.
About Carsten Hoppmann
As Senior Business Development Director, Carsten and his team are responsible for SGK's sales growth in continental Europe. A technical education as an offset and gravure printer and more than 30 years of experience in the packaging industry are the basis for comprehensive knowledge of the market environment and customer needs. The Certified Expert in Digital Business Management training helps him to accompany our customers on the path of digital transformation of their business models.