Legal Issues Involved in the Online Purchase and Sale of Packaged Foods

Part I of this blog posted on May 12, 2015, discussed the business and economic opportunities presented by online purchases and sales of packaged foods as well as some of the business challenges to be overcome to make the opportunities profitable. Part II discusses the legal challenges that should be addressed to make online purchases and sales of packaged foods a practical and profitable reality.

Those companies that choose to enter the online packaged goods marketplace will face legal challenges similar to those faced by other entities operating in the e-commerce space. In order to reach their intended markets and to receive the full benefit of operating in the online market place, companies will need to utilize websites containing e-commerce features and functionalities. In connection with the operation of these websites, retailers should draft and post on the site certain legal terms and conditions addressing:

  • The customer’s use of the site (i.e. website terms and conditions);
  • The retailer’s data collection and data sharing practices (i.e. the privacy policy); and
  • The terms and conditions under which customers purchase products offered through the website (i.e. the terms and conditions of sale).

While the content of these legal terms will need to be tailored to fit the particular retailer’s risk profile and operational particularities, there are several concepts that each retailer should consider addressing through these legal terms.
Continue Reading Online Shopping for Packaged Food – A Business and Economic Opportunity to be Exploited but with Business and Legal Challenges – Part II

Online Purchases and Sales of Packaged Food

This is the first of a two-part post discussing the business and economic opportunities presented by online purchases and sales of packaged foods. The second part will discuss the legal challenges that should be addressed to make online purchases and sales of packaged foods a practical and profitable reality.

Consumers largely purchase packaged food products at grocery stores and convenience stores although for years many of those same consumers have been making online purchases of products as diverse as apparel and footwear, computer hardware and software, autos and auto parts, consumer electronics, appliances, televisions, and movie tickets, to name just a few. Selling packaged foods online represents a substantial growth opportunity for packaged food manufacturers and food retailers that some have already begun to exploit. One study reported in the digital version of Advertising Age on September 14, 2014, predicted that online purchases of food and beverages would account for 2.3% of the $304 billion that would be spent in e-commerce retail in 2014, suggesting significant untapped potential. Other studies have led certain researchers to conclude that digital sales and distribution methodology will continue to grow but there are challenges that must be met. Nevertheless, packaged and processed food marketers and retailers would do well to explore the steps necessary to enter into the online market and to consider the legal issues they will of necessity confront.

Explanatory Note

There are many studies and more detailed descriptions of online packaged food marketing and distribution and the strategies to implement these types of sales and distribution channels than are set forth in this blog. This post draws heavily on an extensive study of online purchases of consumer packaged goods (which would include packaged foods) and in certain instances, our conclusions are extrapolated on data provided for online sales and marketing of consumer packaged goods. The source of much of the information came from Digital Commerce in the Supermarket Aisle: Strategies for CPG Brands, Deloitte University Press, which is affiliated with the well-known global auditing, business consulting and advisory firms (“Deloitte”). The same is true with respect to information drawn from an article by E.G. Schultz Packaged-Goods Marketers Wade Warily into E-Commerce – Big Brands Stymied by Executional Strategies in a World Where Online Retailers Control the Consumer Relationship, Digital Advertising Age, September 16, 2014. Accordingly, this is a broad overview of the potential growth opportunities and challenges and the legal issues presented by e-commerce and online shopping for packaged food products which have been gleaned from experts we have studied coupled with the knowledge of our attorneys who practice in the Food and Agribusiness industry unit of our firm.
Continue Reading Online Shopping for Packaged Food – A Business and Economic Opportunity to be Exploited but with Business and Legal Challenges