Consumers spend more on foods labeled “natural” than for items with the “USDA Organic” seal on them, said three USDA economists who looked into usage of the word “natural” on food labels. They said scanner records and other data indicated that 16 percent of retail food expenditures were for foods labeled “natural.”
“Although federal requirements to use the natural claim are minimal, numerous studies have found consumers attribute a wide set of health and environmental stewardship benefits to foods labeled as natural,” said the Economic Research Service report. Consumers expect that foods are healthier and are produced under higher environmental standards if they are marketed as “natural.”
In reality, neither the USDA nor the FDA address health benefits, production methods, use of pesticides or antibiotics, genetically modified organisms or hormones in crop and livestock production, said the economists. Food regulators regard “natural” as meaning nothing artificial was added to a food and the product was minimally processed.
“The economic problem raised by natural labels is that consumers could be paying extra for product attributes they are not receiving while producers of products with those attributes lose sales,” said the USDA.