Company: NGVC
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001437749-25-037556
Chunk: 838

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 838
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ibly suggest therapeutic benefits for certain foods or food components, as well as dietary supplements and cosmetics. In addition, the number of private consumer class actions relating to false or deceptive advertising against cosmetics, food, beverage and dietary supplement manufacturers has increased in recent years. There has been a rise in the number of class action lawsuits alleging that the plaintiffs’ testing shows that the nutrition facts labels for foods or the supplement facts label for dietary supplements reports the amount of nutrients in the products inaccurately, particularly for beneficial nutrients. These events could interrupt the marketing and sales of products in our stores, damage our brand reputation and public image, increase the cost of products in our stores, result in product recalls or litigation, impede our ability to deliver merchandise in sufficient quantities or quality to our stores, and potentially expose us to litigation seeking substantial damages, which could result in a material adverse effect on our business, financial condition, results of operations and cash flows.

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Our reputation could also suffer from real or perceived issues involving the labeling or marketing of products we sell as “natural.” Although the FDA and the USDA have each issued non-binding statements regarding the appropriate use of the word “natural,” there is currently no single U.S. government-regulated definition of the term “natural” for use in the food, dietary supplement, or cosmetics industries. The resulting uncertainty has led to a growing number of legal challenges. Plaintiffs have commenced class action litigation against a number of food companies and retailers that market products as “natural,” “healthy” or with terms that convey a similar meaning, asserting false, misleading and deceptive advertising and labeling. Recently, class action lawsuits have been filed against companies whose products are packaged in plastic alleging that the packaging has resulted in microplastics leaching into the products, and, therefore, alleging that the products are not “natural” or “healthy” as labeled or otherwise advertised. Should we become subject to similar lawsuits or claims, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is ultimately determined to be unfounded. Adverse publicity about these matters may discourage consumers from buying our products. Further, the cost of defending against any such class actions could be significant. Any loss of confidence on the part of consumers in the truthfulness of our labeling or ingredient claims would be difficult and costly to overcome and may significantly reduce our brand value. Any of these events could adversely affect our reputation and brand and decrease our sales, which could have a material adverse effect on our business, financial condition, results of operations and cash flows