Canada Dry Ginger Ale will continue to be marketed in Canada as “Made from Real Ginger” even though the soft drink’s producer has agreed to remove this controversial claim from American packaging in order to settle a series of U.S. class action lawsuits over false advertising.
The company is evaluating the Canadian packaging, but it still makes the “Made from Real Ginger” claim prominently, and there are “no changes to announce at this time,” according to Katie Gilroy, director of corporate communications for Keurig Dr. Pepper.
As part of the American settlement, Keurig Dr. Pepper will also make cash payments to compensate anyone who has bought Canada Dry in the U.S. since 2013, to a limit of $ 5.20 per household without receipts, or $ 40 with them. If this settlement is finalized by a court as planned later this year, it will resolve several related class actions that alleged violations of state-level business laws, all based on the ginger claim.
The New York lawsuit, for example, cited “common law fraud, deceit and/or misrepresentation, breach of express and implied warranties and unjust enrichment.”
At issue was Canada Dry’s actual ginger content, which lawyers for the New York plaintiff claimed was negligible and falsely promoted as part of a marketing scheme to make Canada Dry seem like a healthy alternative to regular pop.
Ginger, a spice derived from the rhizome of a flowering plant, is commonly used in alternative health treatments, often focused on digestion, although actual science about its benefits is slim.
Flat ginger ale is a popular folk remedy for upset stomach, often given to sick children as a kind of medicine or restorative. Like other pops, however, Canada Dry is made of high fructose corn syrup, citric acid, preservatives and natural flavours, mixed into carbonated water.
Court records suggest there was a 9 per cent rise in sales in the first six months after the addition of “Made from Real Ginger” to Canada Dry’s packaging. A judge who heard preliminary arguments in the California class action lawsuit cited internal company documents that suggested 30 per cent of Canada Dry consumers who increased their consumption did so because of expected health benefits from real ginger.
Research by the New York complainant’s lawyer estimated the actual ginger compound content of Canada Dry at two parts per million, which is below the threshold for human taste, and far lower than any amount that could have health benefits. It claimed that Canada Dry’s “natural flavours” are actually “a flavour compound comprised predominately of flavour extracts not derived from ginger, and a minuscule amount of a ginger flavour extract.”
“Canada Dry’s ginger flavour extract is not ‘real ginger’ as reasonable consumers understand that term,” the lawsuit claims. “It is manufactured in a lab using various chemicals and extraction processes.”
Keurig Dr. Pepper decided to remove the claim claim from its American packaging as part of a negotiated settlement that only applies in the U.S. and will “avoid a protracted litigation process,” Gilroy said in an emailed statement.
“Canada Dry Ginger Ale has always been made using real ginger extract to provide its ginger flavour,” she said.
She declined to answer further questions about this discrepancy, however, such as why the company would not defend against the lawsuit if the claim is true, or how it could put it on Canadian packaging if it is false, or whether the company disputes the two parts per million claim, or how much real ginger is actually in the product.