Petaluma vegan food company Miyoko's Creamery sues California in labeling dispute

A Petaluma plant-based dairy alternatives producer recently ordered by California officials to stop using the word “butter” on its product labels and take down images of cows on its website is fighting the directive in court, claiming the company’s free speech rights are being violated.

Miyoko’s Creamery filed a lawsuit last week in federal court against the state Department of Food and Agriculture in response to a Dec. 9 letter from the agency’s dairy safety branch that said the food enterprise was violating multiple federal and state regulations.

The court battle comes as Miyoko’s and other producers of dairy alternative foods, such as vegan butter and plant-based cheeses, are becoming more appealing to a growing number of consumers wanting to buy environmentally conscious products. The growing popularity of these foods presents another challenge for traditional dairies locally and nationwide, already dealing with an oversupply of organic dairy processors.

LaVone Dyer, a senior environmental scientist with the state agriculture department, noted three issues in the letter to Miyoko’s. The most significant was warning against potentially misbranding products as “butter” since a plant-based dairy alternative does not meet the federal definition as a food exclusively made from milk or cream.

Instead, the Petaluma company should be advertising its products solely as “cashew cream fermented from live cultures,” rather than “cultured vegan butter,” Dyer wrote. Both phrases now appear on Miyoko’s labels.

State officials also ordered the company to remove from its website a photo of a woman hugging a cow and product claims like “lactose free” and “cruelty free” because they imply to consumers that Miyoko’s sells dairy products.

Miyoko Schinner, the CEO and founder of Miyoko’s Creamery, described the state mandate as “an affront to our First Amendment rights.” If the company’s lawsuit is successful, Schinner thinks it will provide a legal precedent that could protect imitation food companies and alleviate fears she said could stifle innovation.

“Someone has to stand up against this,” Schinner said. “We’re in it for the long haul. We’re in it to create a new food system, not just sell products.”

A spokesperson for the state agriculture department declined to comment on the pending litigation.

U.S. District Judge Richard Seeborg of San Francisco was assigned the case this week in the Northern District of California.

Sonoma County dairymen expressed concerns some consumers are mistakingly buying dairy alternatives expecting the same nutritional value as animal-based products, said Tawny Tesconi, executive director of the Sonoma County Farm Bureau. She was supportive of the state’s efforts to enforce more transparent labeling practices for companies like Miyoko’s.

While welcoming plant-based competitors, Tesconi called it hypocritical when some companies disparage traditional dairy producers to promote vegan options but then use traditional product terminology to gain recognition.

“It’s an interesting paradox there,” Tesconi said. “You’re condemning animal products but using their names.”

Vegan butter is the bestselling item produced by Miyoko’s, whose annual sales increased 168% in the past year selling its products in 12,000 stores nationwide, vice president of marketing Neil Cohen said. The privately owned company doesn’t release its financial performance figures.

Miyoko’s also makes several types of plant-based cheeses, primarily by fermenting vegetable sources with specific bacteria and enzymes. The company was founded in Fairfax in 2014 and moved to its 30,000-square-foot Petaluma site three years ago.

In the legal complaint, the Miyoko’s legal team asserted that making wholesale changes to product marketing and labeling would cost “well over $1 million in packaging alone, not to mention lost sales and profit.”

Animal Legal Defense Fund attorney Amanda Howell, the lead counsel for Miyoko’s, said the company uses factual statements to distinguish its products from conventional options, and the current labeling approach effectively shapes a consumer’s expectations. Changing them would bring confusion, she said.

Howell also accused state officials of bowing to lobbyists and protecting the $6.4 billion-a-year dairy industry, the most lucrative agriculture sector in California.

“We’ve seen the National Milk (Producers) Federation and state trade groups pressure the state into doing something,” Howell said. “This isn’t necessarily a concern from consumers. It’s a concern about losing market shares.”

Michael Roberts, a food policy expert at the UCLA School of Law, said the tension over food product labeling and accusations of supposedly misleading consumers dates to the mid-1800s when margarine was first introduced.

Throughout history, imitation products have threatened food industries, and state governments have consistently been the most susceptible to pressure, Roberts said.

Several states have passed laws or face similar legal fights over how packaging descriptions are used by vegan companies, since federal regulators rarely enforce the so-called standards of identity that are used to define food products.

Roberts said his hope is that eventually the U.S. Supreme Court or the Food and Drug Administration will intervene and resolve the food labeling and product description issue as states increasingly take conflicting stances.

“A lot of this is driven because there aren’t standards of identity (for vegan products), but whatever they do, they ought to do in a rational way,” Roberts said. “Perhaps instead of doing something in favor of an industry, how do we make sure consumers are doing this in a way they’re not deceived? That should be the benchmark, and my concern is we do regulation-making that is not grounded in that approach.”

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