Judge Pulls Plug on Chobani Yogurt Ads

UTICA, N.Y. (CN) - Halting a new marketing campaign Friday by Greek yogurt powerhouse Chobani, a federal judge said it has made false claims about competitors Dannon and Yoplait.

U.S. District Judge David Hurd issued twin preliminary injunctions today that let Chobani continue promoting its yogurts' natural ingredients but block the company from disseminating "the false message" that certain ingredients in Dannon and Yoplait yogurts are "unsafe to consume."

Norwich, N.Y.-based Chobani launched the marketing campaign Jan. 6, using television spots, print ads and social media to draw comparisons between its low-calorie Simply 100 products and Dannon Light & Fit Greek and Yoplait Greek 100, a General Foods product.

The campaign juxtaposed Chobani's use of natural ingredients against the competitors' preservatives and artificial sweeteners.

A key TV commercial in the campaign showed a consumer scrunching up her face after reading the Dannon and Yoplait labels while a voiceover named the sweetener and preservative inside. In each ad, the consumer tosses the Dannon and Yoplait yogurt and then reaches for a Chobani Simply 100 Greek yogurt.

The sweetener named in the Dannon product is sucralose, about which the voiceover states, "Sucralose? Why? That stuff has chlorine added to it!" With Yoplait, the named preservative is potassium sorbate, about which the voiceover states, "Potassium sorbate? Really? That stuff is used to kill bugs!"

Anticipating some flak from the campaign, Chobani filed a pre-emptive federal complaint against White Plains-based Dannon in the Northern District of New York, seeking a ruling that its ads posed no Lanham violations.

Chobani said the campaign was meant "to help consumers make informed decisions about their food choices, including the choice between natural sweeteners and artificial sweeteners."

While Dannon filed its own suit against Chobani in the same court, General Mills, which is headquartered in suburban Minneapolis, filed in the District of Minnesota.

Both complaints alleged false advertising and product disparagement under the Lanham Act and related state laws, and GM's case was sent over to Utica on Jan. 14.

Chobani's domination of the Greek yogurt world in the United States since opening for business in 2007 has sparked major interest in its business, given that it entered the U.S. market nine years after Greece's favorite brand, Fage.

Though Greek yogurt pre-Chobani was something of a niche product in the United States, today the thick dairy product accounts for about half of all U.S. yogurt sales.

Sales of Chobani soared with American's appetites - hitting $1.6 billion last year, up from $1 billion in 2012, according to the Washington Post.

Start-up missteps, a product recall, and competition from big guns Yoplait and Dannon all served, however, to slow the company's pace of growth.

Chobani likes to boast that it uses "simple, authentic and natural ingredients" - including fresh milk from local farmers in New York and Idaho, where it produces its yogurt. Dannon and General Mills, though, saw the Chobani marketing campaign as crossing a line.

Sucralose, the no-calorie sweetener used by Dannon, has been approved for human consumption since 1999. It is produced when three atoms of chlorine are substituted for three hydrogen-oxygen groups on a sucrose molecule.

But in the Chorbani TV ad, as the voiceover intones "sucralose," a swimming pool comes into focus. And in the final shot, the hashtag #nobadstuff appears.

Dannon objected to the pool image, contending that "pool chlorine" is the shorthand for calcium hypochlorite, a bleach and disinfectant that is harmful if ingested. No calcium hypochlorite is found in Dannon products, company officials said during oral arguments last week.

Likewise, General Mills objected to the backdrop of a roadside stand laden with fresh produce while voiceover talks about killing bugs. The ad ends, too, with the #nobadstuff overlay.

General Mills says potassium sorbate can be found in pesticide products, but its yogurts contain a potassium salt of sorbic acid as preservative, which has been found to be generally safe for human consumption.

After a federal judge denied Dannon and General Mills temporary restraining orders against the campaign, the court heard oral arguments in Utica on Jan. 22.

In his orders Friday, Hurd found that Dannon and General Mills met the four-prong test for a preliminary injunction: a showing of likely irreparable harm; a likelihood of success in the underlying complaint; a balance of hardship that tips in the complaining party's favor; and a showing of public interest.

The court's two 25-page orders say Chorbani's statements in the ads went beyond "merely puffery" about having a superior product to "directly attack[] a competitor."

And even if what the ads said about chlorine and potassium sorbate were literally true, "courts regularly recognize that even where 'no combination of words' found in the advertisement is untrue, the message conveyed by the advertisement may still be 'literally false' if its clear meaning, considered in context, is false," Hurd wrote.

The judge enjoined the TV, print and digital campaigns; blocked any recitation of claims that the Dannon or Yoplait products are unsafe; and barred the use of the "no bad stuff" phrase.

He also asked Dannon and General Mills to each post a $1 million security with the court.

A Dannon spokesman said the company was happy to receive the preliminary injunction "to stop this misleading advertising," and looked forward to "full and final resolution of this matter."

Chorbani released a statement by marketing chief Peter McGuinness that said the company was disappointed with the injunction but would observe it while "continuing the conversation" about ingredients.

"In the end, if we can give more people more information while helping other food companies make better food, everyone wins," he said.

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