Market growth and investment in the areas of plant-based meat (PBM) products and cell-cultured meat (CCM) products continues to expand in size and scope at staggering levels. Last year, U.S. PBM product retail sales increased 17% to exceed $3.7 billion—with 20% to 30% growth expectations per year. By 2023, forecasters predict the worldwide market share will exceed $22.9 billion.
While no CCM products are currently on the market, 12 CCM companies raised more than $50 million last year. One company announced plans to enter the market this year assuming it clears regulatory hurdles by being the first CCM company to submit its label to USDA’s Food Safety and Inspection Service (FSIS) for review.
Generally, PBM products are those that intend to replicate the tastes, textures and smells of animal tissue but only use plant-based materials. In contrast, CCM products are those grown from real animal tissue, such as tissue from beef, pork, poultry or seafood under controlled conditions using the actual cells from living animals. While PBM and CCM product manufacturing processes differ greatly, companies generally shape, package and label PBM and CCM products similar to their traditional counterparts already on the market and to consumers’ expectations.
The paradox of success: The opposition awakens
The significant growth of the PBM market (and the expected growth of the CCM market) in such a short period has led to an explosion of legislative efforts related to PBM and CCM products, particularly concerning labeling.
At the federal level, FDA and USDA entered into a “formal agreement” on how the agencies intend to regulate CCM products. However, the agreement (at least in terms of labeling) is hypothetical in nature since FDA and USDA haven’t announced final regulatory oversight. Additionally, we are unaware of either FDA or USDA taking significant enforcement actions based on CCM and PBM product labeling.
Insignificant action at the federal level has led to a wave of state-led initiatives to restrict and/or ban PBM and CCM products from using standards of identity nomenclature on labeling, which mostly falls under USDA’s jurisdiction (e.g., standards of identities, such as “ground beef,” “hot dog,” “chicken,” etc.). In August 2018, Missouri was the first state to enact a law restricting product nomenclature. Senate Bill (SB) 627 amended the Missouri meat advertising law to prohibit “misrepresenting a product as meat [any edible portion of livestock, poultry or captive cervid carcass or part thereof] that is not derived from harvested production livestock [cattle, calves, sheep, swine and other listed animals raised in confinement for human consumption] or poultry [any domesticated bird intended for human consumption].” Mo. Rev. Stat. § 265.494(7).
Since Missouri’s efforts just one year ago, roughly 30 other states have pursued and/or enacted legislation to regulate CCM and PBM products.Nearly half of these states have enactedi laws that explicitly restrict the labeling of meat alternatives while also restricting access to traditional meat nomenclature on product labeling.
For example, Arkansas’s House Bill (HB) 1407 (March 18, 2019) and Mississippi’s SB 2922 (March. 12, 2019) prohibit a cell-based, plant-based or insect-based food product from being labeled as “meat” or “meat food product.” Oklahoma’s SB 392 (April 26, 2019) and South Carolina’s HB 4245 (May 9, 2019) prohibit labeling CCM or a product not derived from harvested livestock, fish or crustaceans as “meat” or “clean meat.” However, both laws do not apply to PBM products so long as the labeling discloses the product is plant-based.
State legislatures aggressively pursue lawmaking in the face of federal preemption
As it relates to CCM products, USDA enjoys sweeping preemptive powers in terms of labeling from the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA). Both the FMIA and PPIA explicitly preempt the field of meat labeling: “Marking, labeling, packaging or ingredient requirements in addition to, or different than” the Acts may not be imposed by any state or territory. 21 U.S.C. § 678; 21 U.S.C. § 467(e) (emphasis added). This preemption shield attaches to any USDA-regulated product.
However, there is an argument that state restrictions on labeling CCM products are not “in addition to or different than” those required under the FMIA and PPIA. This is because CCM products are not considered USDA-regulated products at this time—either based on the “formal agreement” with FDA or by act of Congress. However, it’s worth noting the 116th Congress introduced the “Cell-Cultured Meat and Poultry Regulation Act of 2019,” proposing a binding formal agreement between the FDA and USDA in which USDA would oversee the labeling of CCM product. S. 1056 (116th Cong., 2019-20).
At this time, proposed federal authority or theoretical future federal preemption is likely insufficient to currently preempt the significant number of state laws around the country attempting to legislate CCM products. However, when USDA does decide to act, these state laws would almost certainly be “in addition to or different” from those requirements under the FMIA and PPIA—especially if USDA proposes labeling regulations for CCM products. While federal preemption seems almost imminent, the rapid increase of state initiatives may be intended to send a message to USDA that the majority of state legislatures support CCM products’ restricted access to labels with traditional meat nomenclature while USDA mulls over these policy decisions.
As it relates to PBM products, which are already on the market, FDA enjoys sweeping preemptive powers in terms of labeling. This authority comes from the Federal Food, Drug, and Cosmetic Act (FFDCA). See 21 U.S.C. 343-1(a)(1)-(5).
We are unaware of FDA taking enforcement action against PBM products that use traditional nomenclature and standards of identity, such as those established by USDA (other than occasional warning letters). This is likely because most PBM products use label terms, phrases and images on product packaging that inform consumers they are eating a plant-based alternative. PBM products have historically enjoyed an increasingly common usage of USDA standard-of-identity terminology with little FDA involvement because these label terms, phrases and images are sufficient to inform the consumer they are eating a meat alternative product.
It’s plausible state legislation regulating PBM products would lose a federal preemption challenge because it effectively imposes requirements that would directly or indirectly conflict with those that have been historically accepted by FDA and the FFDCA. However, what makes this analysis less certain is FDA’s recent comments and actions related to plant-based products that include the names of dairy foods (e.g., milk, yogurt, cheese). FDA has historically accepted the names of dairy foods on dairy alternatives, just as it has USDA standard-of-identity terminology. However, pressures from state actors and Congress has led FDA to begin discussions on limiting the alternative use of dairy nomenclature.
One could argue FDA is now more willing to act when trade groups (and state legislatures) raise their voices to protect food standard of identities for their most important food commodities This would now include standard of identities established by USDA in the context of PBM products.
Until USDA actively regulates CCM products, it will be difficult to invalidate the growing number of state laws under preemption challenges. Proposed federal authority or theoretical future federal preemption is likely insufficient at this time to currently preempt the significant number of state laws around the country in this area.
Additionally, the fate of state laws surrounding PBM products is harder to predict given FDA’s historical acceptance of allowing industry to use USDA standards of identity on PBM products. However, FDA’s recent actions surrounding plant-based dairy alternatives raise questions as to whether the agency would extend such restrictions to other areas, such as traditional meat nomenclature established by USDA.
Ultimately, issues of federal preemption only come into play when there is a conflict of law, and at this time, USDA and FDA are currently evaluating their options as it relates to PBM and CCM products. Absent federal action in these areas, state laws surrounding PBM and CCM products are not going anywhere These laws send a strong message that many states are not happy with the use of traditional USDA nomenclature on PBM and CCM products.
Robert Hibbert (Robert.Hibbert@morganlewis.com) is a partner at Morgan, Lewis & Bockius LLP. Ryan Fournier (Ryan.Fournier@morganlewis.com) is an associate at Morgan, Lewis & Bockius LLP. Special thanks to Sophia Gaulkin, Class of 2020, University of Pennsylvania Law School, for her significant research and contributions to this article.
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