Nearly a decade ago, a Minnesota company took on the biggest name in the spice aisle when Watkins Inc. accused McCormick & Co. of false advertising for under-filling its black pepper tins.
Minnesota company Watkins took on spice giant McCormick. Eight years later, it lost.
Winona-based Watkins launched the federal false advertising suit about McCormick's iconic pepper tins in 2015.
August 31, 2023 at 3:45PM
This week, a federal jury sided with the Maryland-based spice giant.
"We are greatly disappointed by the verdict and find it very troubling that a large company like McCormick misled, in our view, consumers and retailers without real consequences," Mark Jacobs, chairman of Winona-based Watkins, said in a statement. "While we did not get the verdict we hoped for, the fact that after Watkins filed the lawsuit, McCormick reduced the size of its 4-ounce tin to 3 ounces to match the reduced amount being sold speaks for itself."
The case centered on McCormick reducing the amount of black pepper in its iconic white and red tins while keeping the tin the same size and price.
The practice is common in the food industry and is derisively known as "shrinkflation," since companies sell less product at the same price, boosting income.
But Watkins argued this was an illegal case of false advertising because of regulations on "nonfunctional slack-fill," or a meaningful difference in the size of non-transparent packaging and the amount of product inside.
So Watkins, a 155-year-old spice and baking supply company perhaps best known for its vanilla extract, sued McCormick in 2015.
The complaint said the tins, which because of their ubiquity set a standard in the industry, became "25% empty" after the company reduced the amount of pepper.
That misled consumers and retailers, Watkins claimed, and purportedly harmed the company because it sold a higher volume of pepper in similar- or smaller-sized tins.
"McCormick intentionally maintained the price of its standard tins, notwithstanding the significant reduction in the amount of ground black pepper contained in the traditional tin ... adding to the perception that nothing had changed," Watkins said in the suit.
At the time Watkins filed the suit, Maryland-based McCormick said the practice was in response to high supplier prices for black pepper. The company did not immediately return a request for comment Thursday.
The verdict, issued Tuesday, capped a six-day trial in Minneapolis.
The jury had to find McCormick "made a false or misleading statement of fact," that such "deception" was likely to influence purchases and that it harmed Watkins, according to court filings.
The suit sought jury-decided damages from McCormick.
It is unclear if the company will appeal. Watkins' attorney, Jim Long at Maslon LLP, said, "We have no further comment beyond our client's statement."
In 2020, McCormick settled related lawsuits for $2.5 million, which compensated consumers in Florida, Missouri and California.
Those cases were part of the delay in bringing the Minnesota case to trial.
"While McCormick did agree to compensate consumers in the related class-action lawsuits, our goal was to hold them accountable for not only deceiving the consumer by putting 3 ounces of pepper in a 4 ounce tin, but also for creating an unfair marketplace," Jacobs said.
When Watkins sued McCormick, the company had only recently started selling its spices and extracts in grocery stores after more than a century of direct sales. Founded in 1868, the J.R. Watkins Co. had one of the largest sales operations in the country by the 1940s.
The late Minnesota businessman Irwin Jacobs bought Watkins in 1978, and his son has led the company for 30 years.
The funding is expected to give more than 5,000 Minnesotans, especially in rural areas, high-speed broadband access across the state and help at least 139 businesses and 368 farms.
