Lian Han
Dr. Adonis Hoffman
October 13, 2010
Midterm
The Case of VitaminWater:
A Look at Potential Legislative Response to Misleading Advertising
As I am writing this, the Coca-Cola owned subsidiary Energy Brands Inc., makers of
Glaceau Smartwater and VitaminWater, are currently being sued by the Center of Science for
the Public Interest over misleading advertising and a breach of FDA guidelines. The Center
cites that the nutritional value of VitaminWater, which is indirectly touted by its marketing,
branding and name, is far overshadowed by its glut (33g per bottle) of corn syrup derived
sugars and sweeteners.
As a democratic nation, the United States has to deal with a variety of issues
plaguing advertising and its tumultuous relationship with free speech, as well as
how legislative response affects the behavior and psychology of both buyer and
seller. In general, the Federal Trade Commission is the primary watchdog that
screens and takes action against advertisers when their actions are considered
unfair or deceptive. While the particularities of each case are different, the agency
supports the notion of prevention over prosecution/punishment while maintaining
the most flexible and non-interventionist actions possible. This creates a sort of
dichotomy between moving away from industry standardization without creating a
clear-cut framework for advertisers to safely work within. While this advances the
democratic ideal of maintaining the freedom of creativity and expression to the
individual, it also places government regulatory agencies in a position of highly
subjective deliberation. In addition, we have to consider the extenuating social
concerns, shifts in cultural acceptance and general opinion of the populace when we
consider whether the average consumer would be “deceived” by a particular
advertisement. In this case, we can only posit how the FTC will deal with
VitaminWater and what a potential decision can mean for the future of this product
category.
In this particular case study, two government arms, the FDA and the FTC
both play important roles in defining whether VitaminWater perpetrated “unfair or
deceptive practices in commerce.” VitaminWater is a purported “vitamin-fortified”
water beverage that is produced by Energy Brands Inc., and owned by parent
company Coca-Cola. The product category of flavored waters has exploded in the
past ten years, with wholesale revenue exceeding $300 million. As a result, there has
been a subsequent spike in advertising spending, celebrity endorsements and
sponsorships in the last three years. As obesity is in the forefront of American social
issues, a beverage that distinguishes its flavors based on different vitamin levels was
inevitably going to be drawing scrutiny from health groups.
VitaminWater is essentially a mish-mash of different natural-derivatives,
filtered water and sweeteners. While it does contain trace amounts of vitamins this
is overshadowed by its 33g of artificial sweeteners and its positioning as a healthy
alternative to soft drinks. The case that Center for Public Health brings against
VitaminWater is that “each bottle of VitaminWater do[es] more to promote obesity,
diabetes and other health problems than the vitamins in the drinks do to perform
the advertised benefits listed on the bottles.” The main problem with VitaminWater
is that the company positions their beverage as a health drink, using language like
“Super Natural,” and conjuring images of vitamin filled glasses of water with copy
like “it doesn’t have to be this complicated.” When you present an image of health,
the average consumer will naturally understand the product as beneficial or a
healthy alternative to soft drinks. VitaminWater’s target demographic consists of a
younger, more health-conscious population and makes up a huge market for socalled healthy alternatives. In this dimension, VitaminWater cannot be seen as
healthy product simply because of its comparable sugar content to non-diet sodas.
The addition of its core vitamins is negligible in terms of health. Similar products
like Kellogg’s Cereal, Pom and Kashi have cited as being less good for you than
advertised.
So how would the FTC deal with VitaminWater’s claims? Right off the bat, if
we apply the Central Hudson and the 4-part Intermediate Scrutiny test, we can see
that these advertisements are indeed misleading. There is enough hard evidence
that VitaminWater is positioned as a healthy drink, which implies that it has a
definitely positive health effect to the user. This, however, violates the Legal
Standard. VitaminWater advertisers lack a “reasonable basis” to their claims, which
could also be construed as a lack of providing substantiation to promoting a health
drink. Why is VitaminWater a better choice than a Coke? The sugar levels are
comparable, the vitamin levels are negligible (about 10% of your daily value in 2.5
servings) but the branding is radically different.
In terms of legislative action, there are a variety of ways that the government
can act to forward its agenda without suppressing or conflicting with the creativity
and proclivity of marketers. Unless the drink composition is changed, this beverage
can’t be marketed as a healthy alternative. The health factor is a huge basis for their
current popularity and revenue generation, so a retraction of these campaigns
would be a solid start to rectifying their mistakes. As far as ordering a repayment to
customers, we have to understand that all of the nutritional information for
VitaminWater is on its label, and a degree of consumer awareness would help in
elucidating the myth behind this product.
It is still unclear exactly how this situation will develop in reality, but we can
already observe a trend in consumer education about the topic of flavored water
beverages and their actual nutritional value. Whether this is direct result of
consumer awareness or an indirect result of negative PR, it is still up to government
regulators to step in and do something. At the same time, government agencies are
working to strike a good balance between what can be construed as misleading, and
how their actions will impact the creativity and expression presented to advertisers
as their rights.
For a selection of “misleading” VitaminWater advertisements, see the attached
sheet.
Sources Cited
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6.
Dillon, Nancy. "High-Energy Formula for Successful Biz". New York Daily
News. 2001, April 23.
Geller, Martinne; Richwine, Lisa. "U.S. group sues Coke over
VitaminWater health claims". Reuters. 2009, January 15.
Howard, Theresa. "50 Cent, Glaceau forge unique bond". USA Today. 2007,
July 29.
Johar, Gita Venkataramani and Carolyn J. Simmons, “The Use of
Concurrent Disclosures to Correct Invalid Inferences,” Journal of
Consumer Research. (2000)
Richards, Jef I. Deceptive Advertising. Erlbaum (1990)
Robbins, John. "The Dark Side of Vitaminwater". Huffington Post.
Retrieved August 8, 2010.