Not So Sweet: Sugar Labeling in the Crosshairs

Policymakers and private plaintiffs have had sugar in their crosshairs for more than a decade, and they aren’t finished. On the litigation front, a recent blizzard of lawsuits over what counts as “sugar” for purposes of sugar claims has swamped food and beverage manufacturers who relied on FDA guidance about whether the sweetener allulose counts for sugar labels. The theory has now expanded to sweep in even natural sugars in milk. On the regulatory front, New York City labeling legislation could soon mandate more aggressive sugar and sodium warnings on the city’s restaurant menus—and serve as a blueprint for other like-minded cities.

Key Takeaways

• Sugar-Free/“Only __ g of Sugar!” Labeling Litigation Is Surging: Following the Seventh Circuit’s Franco v. Chobani decision, more than 130 class actions have challenged nutrient content claims like “zero sugar,” “sugar-free,” and “only __ g of sugar” on products containing allulose.
• Allulose Is Just the Beginning: A recent class action challenges “sugar-free” claims on Starbucks beverages containing lactose, expanding scrutiny to naturally occurring sugars.
• New York City Advances Sugar and Sodium Warning Requirements: Proposed legislation would require prominent warnings on restaurant menus and third-party delivery platforms, with compliance beginning in 2028, if enacted.
• When Labeling a Product and Developing Nutrient Content Claims, a Company Must Tread Carefully: Just because a number appears in the Nutrition Facts Panel, the marketing team can’t automatically use that number on the front of the package without further discussion with the regulatory team to understand whether that number has been modified based on guidance documents—whether binding or otherwise.

Allulose Litigation

Following the Seventh Circuit’s decision in Franco v. Chobani, LLC, food and beverage companies are facing a wave of consumer class actions targeting nutrient content claims like “zero sugar” and “sugar-free” labeling on products that contain the sweetener allulose. In the few months since that July 2026 decision, plaintiffs have filed more than 130 lawsuits based on the theory that consumers understand “zero sugar” to mean no sugar, including allulose.

Though chemically related to sugar, allulose does not act like sugar: it does not change blood sugar levels, cause cavities, or cause weight gain. And FDA recognized as much in 2020, in non-binding guidance on how to count allulose in the Nutrition Facts Panel.¹

Companies like Chobani relied on that guidance to make nutrient content claims about sugar. Because FDA exercised its “enforcement discretion” to decline to enforce labeling requirements if manufacturers excluded allulose from the amount of “Total Sugars” and “Added Sugars” listed in the nutrition facts panel “pending future rulemaking,” companies excluded allulose for purposes of nutrition facts disclosures and made similar claims when advertising the amount of sugar in their allulose-containing products. But FDA’s guidance was non-binding and, as courts did with prior nutrient content claims about trans fat,² the Seventh Circuit rejected Chobani’s argument that such guidance allowed Chobani to label allulose-sweetened products as having “zero sugar.” The Seventh Circuit also rejected Chobani’s argument that the 2020 FDA guidance was the agency’s interpretation of the relevant regulation, instead determining that it was an announcement of the agency’s enforcement position.

Franco demonstrates the risk of relying on non-binding guidance and statements of enforcement discretion when making nutrient content claims about non-traditional ingredients. Although the 2020 FDA guidance arguably treated allulose differently for nutrition facts panel labeling purposes, FDA took the position through an amicus brief in Franco that its regulations plainly define all monosaccharides, including allulose, as “sugar.”³ And the Seventh Circuit embraced that view, reasoning that neither allulose’s status as a “rare sugar” nor its unique chemical characteristics or physiological effects change the bottom line: allulose is still sugar.⁴

That holding has opened the door to a flood of state-law consumer-protection claims. Across these cases, plaintiffs make the same essential argument: because allulose counts as sugar under federal regulations, it is false or misleading to market allulose-sweetened products as “zero sugar,” “sugar free,” or “less than 1g of sugar.”

But while Franco has encouraged these lawsuits, it does not mean that all of these allulose plaintiffs will prevail. After all, as FDA’s guidance recognized, the science of allulose hasn’t changed. Consumers concerned about sugar intake for its effect on blood glucose levels, weight gain, or the potential to cause cavities received the key—and truthful—information they cared about when they enjoyed snacks labeled “zero sugar” when sweetened with allulose. It remains to be seen whether any court or factfinder will conclude that consumers were actually deceived over whether allulose is a “sugar” or whether what boils down to a chemistry dispute was even remotely material to their decision to buy these foods or beverages.

Starbucks “Sugar-Free” Lawsuit

Another form of sugar—lactose, or milk sugar—is at issue in a new putative class action against Starbucks. On October 2, 2026, a putative class of the coffee chain’s customers filed a complaint in the Western District of Washington challenging Starbucks’ “sugar free” line of protein beverages because they contain milk—and thus contain lactose. See Walsh, et al. v. Starbucks, No. 26-cv-3745 (W.D. Wash.).

The challenged products, launched in 2025, include lattes and matcha beverages such as “Sugar-Free Vanilla Protein Latte” and “Sugar-Free Caramel Protein Matcha.” According to the complaint, the “sugar free” label represents to reasonable consumers that the drinks do not contain any sugars or sweeteners, when in fact each beverage allegedly contains between 13 and 21 grams of sugar per venti-size serving in the form of lactose. Plaintiffs allege they purchased at least one of these beverages and would not have—or would have paid less—but for the “sugar free” label. They allege violations of the consumer-protection statutes in Washington, California, and New York. Notably, the complaint cites to the Seventh Circuit’s decision in Franco to indicate that, just as allulose is a “sugar” for purposes of “sugar free” labeling, so too is lactose.

What Companies Can Do

• Audit labels for potential landmines in the nutrition facts panel. The Franco-inspired sweetener suits, including Starbucks, are all in their infancy, and it remains to be seen whether plaintiffs’ consumer protection claims will succeed. But regardless of ultimate outcomes, it is clear that Franco has materially changed the litigation landscape.
• Revisit sugar-related label claims. Where companies rely on non-binding guidance and/or enforcement statements for nutrient-fact labeling, especially for non-traditional ingredients like allulose, they should review any nutrient content claims to make sure the front of pack isn’t vulnerable to the attack that the statements are somehow overblown because of a technicality that the guidance document solved.

The Franco decision is one of a longer line of cases where the number in the Nutrition Facts Panel became the basis for a front-of-pack nutrient content claim, but because of FDA guidance on how to treat that particular number, the Company’s nutrient content claim was vulnerable to attack. Take trans fat: in the early 2010s, FDA required companies “round down” fat content levels to zero if the true amount was vanishingly small – less than 0.5 grams. But in 2015, the Ninth Circuit allowed a state consumer-protection claim to move forward where the defendant made a front-of-label “no trans fats” claim based on that “rounded down” number. The plaintiff’s theory was that the product did contain trans fat, so it was false and misleading to say it had “no trans fat” even though the Nutrition Facts Panel could not state the true amount.⁵

Sugar, via allulose and other sugar substitutes, is at issue today, but other non-traditional ingredients may be next. So, where a company is making marketing claims about the presence or absence of a nutrient, the marketing team must get educated on where the numbers in the Nutrition Facts Panel have been adjusted based on FDA policy – whether in the form of non-binding guidance (Franco) or even binding guidance (Reid).

New York City Sodium and Sugar Warning Label Bills

The sugar battles rage in city hall as well as in the courtroom. In September, the New York City Council unanimously passed two bills mandating prominent high-sodium and high-sugar warnings on restaurant menus. If signed into law, both laws would mark a significant expansion of the City’s nutrition-transparency requirements.

The sugar bill amends the City’s existing law for added-sugar warnings. For now, the law requires chain restaurants to post a warning icon—a symbol depicting a spoonful of sugar—next to food items containing 50 grams or more of added sugars, the FDA's daily recommended limit. The new bill would replace the spoonful-of-sugar icon with a triangular warning symbol bearing the words “HIGH SUGAR” in capital letters and bold typeface. The bill would also require covered restaurants to ensure the warning icon appears on menus displayed through third-party delivery platforms. The sodium bill contains similar requirements.

The bills call for a graduated civil penalty scheme, with a maximum fine of $200 for third or subsequent violations and would give restaurants until 2028 to comply.

The bills arrive at a moment of accelerating regulatory activity in the food and beverage space. As we discussed in our previous client alert, states including Texas, Louisiana, and Wisconsin have been advancing sweeping mandates for the labeling of ultra-processed foods. New York City’s actions—though narrower in scope—demonstrate that municipalities are also prepared to step in independently, layering local disclosure obligations on top of state and federal requirements. For restaurants operating across multiple jurisdictions, these bills add another compliance thread to an increasingly complex tapestry.

What Companies Can Do

Restaurants operating in New York City—particularly national and regional chains with 15 or more locations—should take the following steps to prepare for the new sodium and sugar warning requirements:

• Audit your menus now. Review menus, menu boards, and food display signage to identify items triggering the new warnings.
• Don't overlook delivery platforms. Both bills extend labeling obligations to third-party platforms; coordinate with partners to display required warnings on digital menus.
• Take advantage of the ramp-up period. Use the graduated effective dates to update systems, train staff, and coordinate with delivery partners before enforcement begins.