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Innovation

Litigation Is Not A Substitute For Innovation

Litigation Is Not A Substitute For Innovation 273 273 Kelsey Berryhill

The Cattleman’s Association and other ranchers are using regulation and litigation to stop non-meat, lab-produced products from labeling their offerings as meat. They fear the same disruption as the dairy industry, now proliferated with products such as almond milk, cashew milk, soy milk, oat milk and coconut milk, and associated brand extensions into non-dairy styles of yogurt, cream cheese, ricotta, mozzarella and other vegan cheese substitutes. However, huge producers such as Tyson and Cargill are betting on the popularity of plant-based meats with large investments.

Original Reddi Wip, the aerosol can of whipped cream, is a 71 year old brand. It has a fat free version, a chocolate version and an extra creamy version. It is a dairy product. But, not wanting to miss out on the dietary trend of non-dairy products, Reddi Wip launched two non-dairy versions: a coconut milk version and an almond milk version. And, yes, probably to the chagrin of the dairy industry, Reddi Wip uses the terminology “almond milk.” Reddi Wip did not choose to litigate in court. Reddi Wip created options to attract new customers who have different dietary habits. They decided to compete in the marketplace.

Rather than introduce a grain-free snack into this swelling category, Frito Lay has decided to litigate, battling an upstart brand made of non-GMO peas and lentils instead of corn, with no artificial flavors, colors or MSG Peatos.

Yet, there are some big brands that would rather fight in court than fight by competing for brand preference. Today, one snacking trend is non-grain, non-GMO, gluten-free, organic products. Rather than introduce a grain-free snack into this swelling category, Frito Lay has decided to litigate, battling an upstart brand made of non-GMO peas and lentils instead of corn, with no artificial flavors, colors or MSG Peatos. Peatos joins a host of other non-grain (think Paleo and other low carb diets) niche branded snacks such as Hippeas, a chickpea snack and Black Bean chips from Garden of Eatin.

Frito Lay’s cease and desist letter complains that Peatos is too similar to Cheetos®, their cornmeal cheese snack with some artificial ingredients and food coloring. Size-wise, it is no contest: regular Cheetos is a $1.5 billion brand; Peatos has generated $5 million in sales since its birth. With all of its expertise and marketing resources, Frito Lay could be innovating to address the increasing popularity of non-grain snacks. Instead, Frito Lay is using lawyers to stop the potential success of a competitor, albeit a David to Frito Lay’s Goliath.

Unilever took the same approach trying to protect its Hellman’s/Best Foods Mayonnaise brands. Rather than create its own eggless vegan version of the spreadable condiment, Unilever went to court to stop Hampton Creek (now Just Foods) from labeling its egg-free vegan Just Mayo. Unilever argued that a product cannot be a mayonnaise if it does not have eggs. After the suit became a PR nightmare. Unilever was accused of being a bully while wanting to stop sustainable food companies. Unilever dropped the suit. Unilever prides itself on its social consciousness. The American Egg Board also attempted to stop Just Mayo from being sold in Whole Foods. Hampton Creek agreed to change the label on Just Mayo to emphasize that the word Just in Just Mayo stood for honesty, genuineness, and integrity.

Size-wise, it is no contest: regular Cheetos is a $1.5 billion brand; Peatos has generated $5 million in sales since its birth…Frito Lay is using lawyers to stop the potential success of a competitor, albeit a David to Frito Lay’s Goliath.

Of course, brands need to protect their trademarks and trade dress. But, using litigation to protect a brand from the increasing desire for competitive alternatives that satisfy different customer needs is a formula for failure. The best strategy for brand protection is renovation and innovation to satisfy the changing needs of a dynamic marketplace. Recognize the changing needs of both current customers and of potential new segments of customers. Using litigation in place of segmentation is just delaying inevitable brand decline.

Hiding from the changing world using litigation to stave off the inevitable, a marketer will be ill-prepared for the future. Litigation is not an effective marketing defense against changing consumer needs. Insightful, targeted innovation and renovation are the way forward. Cannibalize yourself or a competitor will do that to you.