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Federal Register / Vol. 86, No. 111 / Friday, June 11, 2021 / Rules and Regulations
multiplying the number of formulas by estimates of per-formula costs. We obtain per-formula cost estimates from the FDA Reformulation Cost Model Ref.
22, which allows the incorporation of a variety of potential reformulation costs associated with idea generation, product research and process development, coordinating activities, product testing, packaging development, market testing, and production/manufacturing. We estimate that the addition of live and active cultures to yogurt batches represents a critical minor ingredient with functional effects, yielding performula reformulation costs ranging from approximately $28,530 to $289,845
in 2019 USD. We estimate that some manufacturers will be able to coordinate a required reformulation with a scheduled reformulation, resulting in lower reformulation costs than if they were unable to coordinate. However, the extent to which manufacturers can undertake such coordination depends on the compliance period. For a 24month compliance period, we estimate that 20 percent of reformulations can be coordinated with a scheduled
reformulation. Combining this information, we estimate one-time reformulation costs related to the Claims Requirement to be between approximately $7.5 million and $76.3
million in 2019 dollars. Annualized over 10 years and discounted at 3
percent, reformulation costs range from approximately $855.1 thousand to $8.7
million per year in 2019 dollars.
Annualized over 10 years at 7 percent, reformulation costs range from approximately $1.0 million to $10.2
million per year.
We previously estimated that 434
small yogurt UPCs will undergo relabeling related to removing their contains live and active cultures or similar claims and 348 small yogurt UPCs will relabel related to the addition of the phrase does not contain live and active cultures to their label, for a total of 782 small yogurt UPCs affected by relabeling under the Claims Requirement. We estimate the one-time cost of changing all yogurt labels using the FDA Labeling Cost Model. The removal and addition of claims is a major label change. Using the Labeling
Cost Model and using a 24-month compliance period, the estimated onetime labeling cost lies between approximately $4.9 million and $12.4
million in 2019 dollars. Annualized over 10 years at 3 percent, relabeling costs range from approximately $558.3
thousand to $1.5 million per year.
Annualized over 10 years at 7 percent, relabeling costs range from approximately $633.7 thousand to $1.7
million per year.
In total, for a 24-month compliance period, we estimate that the Claims Requirement would cost small yogurt manufacturers between approximately $1.6 million and $10.4 million per year in 2019 dollars, or between $0.2 million and $1.2 million per small yogurt manufacturer per year, discounted at 3
percent. We estimate that costs are between approximately $1.8 million and $12.1 million per year in 2019 dollars, discounted at 7 percent. Costs per small yogurt manufacturer are between approximately $0.2 million and $1.3
million per year. These estimates are summarized in table 1.

TABLE 1ANNUAL COSTS TO SMALL FIRMS OF THE CLAIMS REQUIREMENT
Millions 2017$
Discount rate %
Annual Analytical Testing Costs
Annual Reformulation Costs
Annual Labeling Costs
Annual Costs
Annual Costs Per Small Firm

3 7
3 7
3 7
3 7

Low $

High $
$0.2
0.9
1.0
0.6
0.6
1.6
1.8
0.2
0.2

$0.3
8.7
10.2
1.5
1.7
10.4
12.1
1.2
1.3

Notes: 24-month compliance period. One-time reformulation and labeling costs are annualized over 10 years.

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3. The Standards of Identity Revocation for Lowfat Yogurt and Nonfat Yogurt We are revoking the standards of identity for lowfat yogurt 131.203
and nonfat yogurt 131.206. The revocation will result in lowfat yogurt and nonfat yogurt being covered under the general definition and standard of identity in 130.10. Section 130.10 sets out requirements for foods that substitute for a standardized food but that deviate from the standard due to compliance with an expressed nutrient content claim defined by FDA
regulation.
Under 131.203 and 131.206, lowfat yogurt must contain not less than 0.5
percent milkfat nor more than 2 percent milkfat, and nonfat yogurt must contain less than 0.5 percent milkfat. If the fat content of yogurt is modified to meet
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the expressed nutrient content claims, low fat and no fat in 101.62b, lowfat yogurt must contain less than or equal to 3 grams of fat per RACC, and nonfat yogurt must contain less than 0.5
grams per RACC. The RACC for yogurt is 170 grams. In other words, when yogurt is modified to comply with the expressed nutrient content claims low fat and no fat, the resultant products are standardized foods under 130.10, and as such, lowfat yogurt must contain less than or equal to 1.76
percent = 3g/170g milkfat and nonfat yogurt must contain less than 0.29
percent = 0.5g/170g milkfat. As acknowledged by comments we received, once this final rule is in effect, some lowfat yogurt and nonfat yogurt products that currently meet the milkfat content requirements in 131.203 and
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131.206 will have to be reformulated to meet the fat content requirements for low fat and no fat under 101.62b. For example, a lowfat yogurt product with 2 percent milkfat will need to be reformulated to contain no more than 1.33 percent milkfat to comply with 101.62b and be covered as a standardized food under 130.10.
To estimate the percentage of lowfat yogurt and nonfat yogurt products affected by the Standards of Identity Revocation, we use data from the USDAs National Nutrient Database for Standard Reference Ref. 2. We estimate that approximately 21 percent of lowfat yogurts and 19 percent of nonfat yogurts are affected by the Standards of Identity Revocation and will need to reformulate to reduce the fat content of their yogurts to meet the 1.76 percent and 0.29

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