The suit is to be filed by public pressure group Center for Science in the Public Interest (CSPI), which claims the re-branding is misleading as the drink contains high fructose corn syrup.
Last month, Cadbury Schweppes reformulated 7Up to contain only five '100 percent natural' ingredients: filtered carbonated water, high fructose corn syrup, natural citric acid, natural flavors and natural potassium citrate.
Television adverts for the product claim it "tastes better than ever because we stripped out all the artificial stuff," and show cans of the drink being picked from fruit trees or harvested from the ground.
But the continued presence of high fructose corn syrup has brought the firm under attack.
"Pretending that soda made with high fructose corn syrup is 'all natural,' is just plain old deception," said CSPI executive director Michael Jacobson.
The problem lies in the fact that the Food and Drug Administration (FDA) does not provide a definition of the term 'natural'.
The US Department of Agriculture (USDA), which sets out regulations for meat and poultry products, states that products can only carry a 'natural' claim if they contain no artificial or synthetic ingredients, and if they are minimally processed. And although the FDA has been petitioned to adopt the USDA's definition of the term, current FDA policy simply states that a food can be considered 'natural' if "nothing artificial or synthetic" has been added to it that would not normally be expected to be in that food.
The US Natural Ingredient Resource Center devised its own definition of natural ingredients last year, after inviting comments from the food industry.
It said natural ingredients should be present in or produced by nature, produced using "minimal processing" (using methods possible in a household kitchen or on a farm), and "directly extracted" using simple methods.
"High fructose corn syrup isn't something you could cook up from a bushel of corn in your kitchen, unless you happen to be equipped with centrifuges, hydroclones, ion-exchange columns, and buckets of enzymes," said Jacobson.
The suit to be filed by the CSPI will seek to prevent Cadbury Schweppes from describing any product containing high fructose corn syrup as 'natural'. The CSPI will also seek restitution, corrective advertising and attorney's fees.
In March this year the Sugar Association filed a petition with the FDA requesting the establishment of a clear definition for the use of the term 'natural' on food and beverage product labels, claiming that the current lack of a formal definition for the term has resulted in misleading claims and consumer confusion.
According to recent studies, "all-natural" is the most frequent "positive" new product category. In 2004, the Natural Marketing Institute reported that 63 percent of consumers have a preference for foods and beverages marketed as natural. Food sales in natural product stores reached a reported $11.4 billion in 2003.
Another research firm, IRI, said in January this year that 94 per cent of American households had bought a product marketed as natural, and predicted the sector would show high single-digit growth over the next five years.
The natural soda market grew by almost 15 per cent between May 2004 and May 2005, according to market research group SPINS.
In 1993, the FDA said it had not included a definition of the term in its Nutrition Labeling and Education Act (NLEA) "because of resource limitations and other agency priorities."
However, it did concede that the use of the term on food labels is "of considerable interest to consumers and industry", adding that "because of the widespread use of this term, and the evidence that consumers regard many uses of this term as noninformative, the agency would consider establishing a definition."