Overview:
Mushroom-based “superfoods” face scrutiny in a recent NAD investigation. How might claim substantiation have functioned to prevent the challenge?
NAD Recommends That Ryze Superfoods Pull Health Claims
The wellness supplement market is estimated to reach 470 billion by 2032. In a growth market, competition is intense—but brands that make exaggerated claims may attract regulatory scrutiny, potentially leading to costly disputes and erosion of consumer trust.
Case Background: NAD Inquiry Into Ryze’s Claims
As part of its ongoing marketplace monitoring program, the National Advertising Division (NAD) of BBB National Programs launched an inquiry into the express and implied claims made in online advertising from Ryze Superfoods. Ryze manufactures coffee, matcha, hot cocoa, chai, creamer, and oatmeal products containing mushrooms, which the company calls “functional,” meaning medicinal. The NAD examined whether certain marketing statements from Ryze were supported by reliable evidence.
Challenged claims included assertions that RYZE Mushroom Coffee provides:
- “All-day energy”
- “Sharper focus”
- “Healthier digestion”
- “Better immune support”
- “Better sleep”
NAD also looked at implied claims suggesting that RYZE Mushroom Matcha could provide appetite-suppressing benefits comparable to GLP-1 agonists (such as Ozempic), but “without the side effects.” Before NAD issued a ruling, Ryze informed the division it would permanently discontinue the challenged claims and “modify the presentation” of its advertising in the future. NAD therefore closed the inquiry, treating the discontinued claims as though NAD had recommended they be withdrawn.
Unsubstantiated Claims Carry Risks
Health benefits are powerful marketing tools, but they carry reputational and regulatory risks. Making unsubstantiated or false claims can lead not only to investigations by NAD, FTC, or state attorneys general, but in some cases, lawsuits from consumers or competitors and loss of credibility with customers and retailers. Functional foods and supplement markets face heightened scrutiny, and even the perception of overstated benefits can erode consumer trust.
The Function of False Advertising Surveys
With respect to the Ryze mushroom-based supplements, a scientific study could have substantiated claims that they were “natural alternatives” to GLP-1 agonists. However, because those claims were implied rather than stated outright, what consumers thought the ads were saying was also at issue. Did the messaging lead consumers to believe the mushrooms had the same efficacy as prescription GLP-1 drugs like Ozempic? Or did consumers simply take away a more general impression about supporting wellness and metabolism?
A false advertising survey could have answered these questions. Such a survey could test whether the advertising conveyed the message that the mushroom product could achieve drug-like results. A survey could show whether a significant portion of consumers interpreted the advertising as suggesting the product was comparable to GLP-1 agonists. That perception, if the claim is not substantiated by research, could support a false advertising claim. Alternatively, a survey could demonstrate that consumers did not take away a drug-equivalence message, which would help defend the advertising as not misleading in context.
The Ryze Superfoods case shows that NAD’s regulators are paying attention to express and implied health claims made by wellness brands, and brands that overpromise may find themselves under scrutiny. IMS Legal Strategies conducts reliable consumer research to substantiate advertising claims or provide evidence in false advertising litigation. Our experts design and conduct studies that stand up to NAD, FTC, and courtroom review, helping companies market with confidence. Contact us today to discover how advertising substantiation surveys can protect your brand and give you a market advantage.