Naked Juice Company started by Jimmy Rosenberg in Santa Monica in 1983. The company began as an operation out of a house, where the juice was made, and it was sold on the beach to sunbathers. The company's products were popular, and it began to professionalize. The first step was to secure distribution in California. Over the past 21 years, however, Naked Juice has become a much larger brand. Distribution now spans all 50 states, Canada and the UK (NakedJuice.com, 2014). At the heart of the Naked Juice concept is that the products are all-natural, where the sweetness and richness of flavor is derived from the natural sugars in the fruit juice. The natural fruit juices are also intended to have a high level of nutrients, and are free from preservatives as well (Lifestyle Direct, 2014). It is on these principles that the brand was built, and gained a following among people looking for a healthier beverage alternative.

The industry, however, changed in the 2000s. The first change was when Coca-Cola purchased Odwalla, a similar juice maker. PepsiCo responded with a purchase of Naked Juice. This changed the nature of Naked Juice in a few ways. The first is that the distribution grew, to the point where it is today. The second is that PepsiCo has made changes to the production as well. This is where the brand has come under fire in recent years. Whereas the "all-natural" concept is one on which the brand was built and has traded, the product is not all-natural anymore, in particular changes have been made to many formulations to lower costs,...

A number of phrases were used in the promotion of Naked Juice that were found to be untrue, such as "100% Juice" and "All-Natural Fruit" (Tepper, 2013). The company countered that there is insufficient regulatory guidance on the word "natural" and eventually settled the suit out of court without specifically admitting culpability. PepsiCo is also seeking third-party affirmation of the product's non-GMO status in order to use that as an element of its marketing (Kim, 2013).
The lawsuit can be expected to have damaged the brand, particularly its reputation, which relies on the ability of Naked Juice to be marketed as natural. Many consumers also are unlikely to know that the company is owned by PepsiCo, which is more known for having junky sugar-filled products. Naked Juice consumers are likely to be more skeptical of the product, or to choose an independent one, if they were aware that it was a Pepsi brand and had come under fire to exaggerated claims of naturalness and healthfulness. In that sense, settling out of court was probably the best move for the company, because it generated relatively little publicity, compared with a situation where the company might have been found guilty in a court of law of false advertising -- that would have been much more damaging.

Going Forward

The Naked Juice brand needs to…