Council of Better Business Bureaus’ National Advertising Division Recommends Kauai Coffee to Modify and Discontinue Environmental-Benefits Claims for Coffee Pods

The National Advertising Division (NAD), of the Council of Better Business Bureaus, recommended that Kauai Coffee Company, LLC, discontinue certain environmental-benefits claims for the company’s single-serve coffee pods. In addition, NAD found that the company’s webpage fails to meet FTC Green Guide requirements for advertising claims. The NAD decision recommends that Kauai Coffee company discontinue and modify several advertising claims. It also requested that the company provide substantiation for a number of express claims.

NAD’s purpose is to provide efficient, cost-effective resolution to disputes between private parties regarding national advertisements. The process is voluntary. This type of voluntary enforcement allows the NAD to use alternative dispute resolution to address and settle disputes within 60 to 90 days. Advertisements challenged under the NAD are subjected to the “claim substantiation” standard promulgated by the Federal Trade Commission (FTC). Companies can appeal the NAD decisions to the National Advertising Review Board, which appoints appellate panels to review decisions issued by the NAD. NAD reserves the right to refer the claims to the appropriate federal agency, usually the FTC, for further action. It is this threat of a potential FTC investigation that incentivizes those to participate in the voluntary NAD process.

Much of the Kauai Coffee NAD decision addresses claims regarding the compostability of the Kauai coffee pods. Although the company obtained third party certification that the pods meet the requirements of ASTM standards D6400 and D6868, the certification does not extend to typical disposal methods. Indeed, the pods will disintegrate and biodegrade swiftly and safely only in a professionally managed industrial composting facility, which is not readily available to most consumers, and the pods are not suitable for home compositing. NAD found that Kauai Coffee must prominently discloses these facts.

According to NAD, the Kauai Coffee webpage violated the FTC Green Guides requirements by not clearly and prominently disclosing both that the pods are not suitable for home composting and that industrial composting programs are not readily available to most consumers. Indeed, NAD noted, “it is well-established that any material disclosures must be clear and conspicuous and appear in close proximity to the claim it is qualifying.”

In addition, NAD has asked the company to substantiate a number of its environmental-benefits claims including:

• “Don’t trash the Earth with your coffee. Brew & Renew.”

• Kauai Coffee comes in “new certified 100% compostable pods that work in all K-Cup brewers.”

• “Compostable in industrial facilities. Check locally, as these do not exist in many communities. Not certified for backyard composting.”

• “Now you can enjoy the great taste and convenience of single-serve coffee without worrying about the environmental impact. Our certified 100% compostable pod is compatible with all K-cup brewers and is designed to go back to the land – not the landfill.”

NAD has also asked that Kauai Coffee discontinue use of the following statements:

• “Don’t trash the Earth with your coffee. BREW & RENEW” along with the image of the trash can imprinted with a green/blue image of the earth.

• “Now you can enjoy the great taste and convenience of single-serve coffee without worrying about the environmental impact. Our certified 100% compostable pod is compatible with all K-cup brewers and is designed to go back to the land – not the landfill.”

NAD reports that Kauai Coffee will comply with NAD’s recommendations.