In This Issue
Winter is here, snow is in the Sierras and Expo West is around the corner ... which means time for BHB's Winter 2017 CPG / Tech Law Update.  Also, a few legal updates on FDA guidelines, GMO regulation and farm bill changes (scroll below).
Practice Group Update  Noah 

Glasses of fresh organic vegetable and fruit juices. Detox diet.     Note  Shallow depth of field

Food and beverage transactions and activity continue to accelerate in 2017.  Notable recent highlights include:
  • Negotiated Series A investment by institutional investor in innovative better-for-you food ("BFY") category client.
  • Advised several highly branded clients on seed investment rounds.
  • Secured dismissal of several false advertising class actions against highly branded food companies.
  • Provided formation set-up for several start-ups in the supplement, health tech, and BFY food space.
  • Negotiated several co-pack, distributor, and endorsement agreements for a wide range of clients from start-up to mid-market.
  • Secured trademarks and trademark assignments and cleared the field for several highly branded food, beverage and supplement companies.
  • Advised multiple CPG firms on exit negotiations and transactions.
  • Represented highly branded company in negotiations with investment from strategic partner.

Look for practice head Allison Hagey at Expo West in Anaheim where she is judging the Pitch Slam  competition on Wednesday and Thursday afternoons (3/8 and 3/9).  Allison also is the legal expert on hand for the breakout lunch session at the Natural Products Business School lunch on March 8.  If you are in town and would like to meet-up, let us know!   
Industry Engagement speaking

We continue to engage with companies and other service providers alike to continually improve the standard of legal advice available to small and mid-market CPG companies:
  • CPG Law practice chair Allison Hagey spoke at Esca Bona about consumer activation, policy, and regulatory issues.  Check out Allison's panel at ~2hr 50min  here.
  • At Project Nosh in Los Angeles, Allison provided a Legal Bootcamp 101 session for start-ups and mid-market better-for-you food and beverage brands. 
  • BHB is supporting Food System 6, a better for you food system accelerator.  Allison is providing legal support and guidance for newly launched cohort.
  • Litigation head Noah Hagey chaired livestream panel discussion on litigation strategies for beverage companies at Bev Net in Santa Monica.
  • New Hope featured Allison's article Expanding the market: Thinking beyond the yoga mom where she challenged BFY brands to think beyond their existing markets.
Update on New FDA Guidelines 

Close up of measure tape on nutrition facts

In January 2017, FDA provided additional points of clarity around the updated FDA nutrition facts panel.  This draft guidance detailed determinations arou nd the compliance date and added sugars, among other topics.  We are still waiting on FDA guidance on what constitutes fiber and which ingredients will be grandfathered in.  Details below:

1. Compliance Date. Products labeled on or after July 26, 2018 (or July 26, 2019, for manufacturers with less than $10m in annual sales), must bear the new nutrition label. Compliance date is based on the date the food product was labeled. 


2. Annual Company Sales. To determine if a company meets the $10 million threshold, the company can (a) take the smallest sales volume from the previous three years; or (b) take the average of the previous three years sales volume.


3. Labeling of Added Sugars. The FDA will not classify as an added sugar an ingredient that contains all of the components of a whole fruit or vegetable that has been processed so that the plant material is physically broken down into smaller pieces or water is removed. If sugars are in excess of what would be expected from 100 percent fruits or vegetables, those sugars must be declared as added sugars.

Strawberry natural healthy nutrition organic food in rustic clay dish on vintage kitchen background. Vegetarian, full of vitamin dessert. Dark food photo, rustic style, natural light.


GMO / Bioengineered Labeling UpdateGMO

The Trump Administration hit the pause button on the USDA's fine-tuning of guidelines around the July 2016 GMO bill.  The bill itself did not define the standards, but provided the USDA authority to define and implement required disclosures.  The Trump Administration's latest memo to department heads and following executive order will stall some of the outstanding GMO issues awaiting answers. 

What We Know About the Federal Bill:

Beautiful fully developed GMO Corn Maize Cob with golden seed on wooden backgrpund


1. Labelling is required for all qualifying foods by July 2018.


2. State GMO laws are preempted.


3. Bill will not interfere with any voluntary manufacturer GMO labelling.


4. To be considered GMO food, mutations must be one that could not be "otherwise obtained through conventional breeding or found in nature".

5. "Small food manufacturers" have the option to provide a toll free number on the packaging and a website URL linking to a page containing the disclosure.


6. Food served in a restaurant or "similar retail establishment" as well as "very small food manufacturers" are excluded from 

the disclosure requirements.


7. Organic labeled food does not need to include a non-GMO label.


8. Disclosure is not required for a food derived from an animal solely because the animal feed was produced from a bioengineered substance.

What Remains Unanswered:


1. Labeling and disclosure standards.

2. Quantity / % of bioengineered substance present in food equated with "bioengineered" status.


3. Exemption definitions for "small food manufacturer," "small or very small packages," "very small food manufacturers," or "similar food establishment".


4. Disclosure options for "small or very small packages".


5. Labelling protocols for fresh foods.


The Trump Administration's January 20 memo to department heads and the following January 30 executive order caused a significant road bump in the USDA implementation process. We will be monitoring and will keep you posted.
Update on 2018 Farm Bill farmbill

Agricultural landscape of hay bales in a golden field


The 2018 farm bill, the behemoth 900+ page, ~$100 billion legislation that sets a majority of our food and agriculture policy is under discussion. 

Decisions made in the farm bill will have a significant impact on the quality and price of food, the environmental impact, school lunches, and hunger. 


Items to track are proposals to separate the food stamp (SNAP) program, school lunch program, and nutrition standards from the farm bill. 

Farmworker and immigration issues will likely go head to head. 

BHB Practice Round Groupbhb0

The BHB CPG, food, beverage and tech practice group supports entrepreneurs and businesses in all stages of growth and investment.  We provide strategic legal advice and counsel with a focus on brand/IP protection, state and federal regulatory compliance, general contract and corporate governance, as well as litigation via our complex litigation practice.  Since 2009, we have helped clients raise in excess of over $2.5 billion and advised them in connection with investment and/or acquisition by strategic partners.  For more information contact Allison Hagey or visit our website  here.

BraunHagey & Borden LLP | allison@braunhagey.com