A Kellogg's (NYSE:K) consumer isn't happy with the company's Pop-Tarts, according to a lawsuit. As a result, the breakfast food company faces a potential $5 million payout.
Given the company's ongoing battle with striking employees, the lawsuit only adds to bad headlines for Kellogg's. But is the strawberry-flavored lawsuit actually something to worry about?
Woman sues Kellogg's for not having enough strawberry in its strawberry-flavored Pop-Tarts
In Aug. 2021, a woman named Anita Harris filed a class-action lawsuit in the Southern District of Illinois, claiming that Kellogg's doesn't put enough real strawberry in its strawberry-flavored Pop-Tarts.
Harris argues that the two percent or less of dried strawberries, pears, apples, and red 40 isn't enough to warrant a label claiming that the product is "strawberry-flavored." The product label for Frosted Strawberry Toaster Pastries suggests "a greater relative and absolute amount of strawberries than it does," according to the plaintiff.
Harris reportedly wanted "more than a 'strawberry taste,' which she nevertheless failed to receive."
Kellogg's Pop-Tart lawsuit comes after a $13 million cereal settlement
Harris isn't the first to target Kellogg's with a lawsuit. In Sept. 2021, Kellogg's settled a $13 million lawsuit that said the company implied nutritional value on its cereal packaging despite excessive amounts of sugar.
Lawsuit occurs as labor force continues massive strike at Kellogg's
More than 1,400 unionized Kellogg's cereal plant workers went on strike in the U.S. to protest mandatory overtime of up to 16-hour days, seven days a week. As of Oct. 25, the strike was nearing the three-week mark for workers in Michigan, Tennessee, Pennsylvania, and Nebraska.
Lisa Gregory, International Representative for the Bakery Confectionery, Tobacco Workers, and Grain Millers International Union, told reporters, "We don’t feel that it’s that hard of an ask for every employee to be paid and benefited equally."
Will Anita Harris's lawsuit amount to anything?
Harris might have a legitimate leg to stand on in the Kellogg's Pop-Tart lawsuit, especially given the recent cereal settlement. Unlike Kellogg's, competitors with similar strawberry products label the packaging with wording like "naturally and artificially flavored."
The lawsuit, which cites the Illinois Consumer Fraud and Deceptive Business Practices Act, says that the "false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact" is illegal. At worst, Kellogg's will have to pay the $5 million in a settlement for damages resulting from failing to provide actual strawberry flavor and nutrition.
How Kellogg's stock is responding amid the controversy
Kellogg's stock has been volatile in Oct. 2021, ultimately falling 3.5 percent in the four weeks ended Oct. 25. However, that likely has more to do with the strike than the $5 million Pop-Tart lawsuit. Still, it's not great news for the company, which is currently battling union claims with retaliatory statements.
"Most employees working under this contract have industry-leading pay and benefits, and all have above-market wages and retirement," Kellogg's wrote in a press release. The company added, "In 2020, Kellogg cereal manufacturing employees worked an average of 52–56 hours/week, however 90% of the time, employees volunteered for the extra hours."