Another Lawsuit: Coca-Cola Company Sues Pepsico

Trop50 Carafe Bottle

Bloomberg News reported a June 2011 trial date between The Coca-Cola Company and Pepsico for trademark and patent infringement (link here).  The product in question is Pepsico’s Trop50 juices (pictured on the left), which The Coca-Cola Company claims has packaging copying their Simply juices.  The Trop50 – a low-calorie line of juices which was introduced around the same time last year as the Tropicana packaging disaster, was in the newer packaging (ie. Tropicana brand name down the side of the label, glass of juice instead of straw in orange).  Despite the newer packaging , Pepsico’s Tropicana unit ultimately decided to change up the format by converting from tetra pack carton boxes to plastic bottle packaging with a big green cap.

Coca-Cola Company lawyers said in a statement that the new packaging for the low-calorie Trop50 brand will “likely deceive consumers and dilute the quality” of Coke’s own brand of premium juices, called Simply.  Another line from the their lawyers was, “PepsiCo chose packaging that closely mimics the distinctive and nonfunctional Simply trade dress and patented Simply closure, ostensibly to revitalize PepsiCo’s fledgling Trop50 brand.”

Simply Orange Carafe Bottle

Do you consider the two different juice lines similar to one another?  Coca-Cola’s Simply juices are pictured here on the right.  I believe Coca-Cola has a strong case here, since the big green cap and the bottle’s shape are similar.  Once you have the juice within the bottle filling up the clear space, the Trop50 could legitimately pass for a bottle of Simply Orange.   It’s interesting to see that Tropicana has changed their packaging twice in the last two years.  One would think that consistency is key for consumers to recognize your product and turn it into a regular repurchase.  With the constant packaging changes in the marketplace, Tropicana risks having consumers confuse their juices with other brands of juices out there.  And in a grocery store where consumers are looking for juices based on packaging and price, they will likely choose a different product if they don’t recognize Tropicana’s juices.

This is just adds another chapter to the list of lawsuits between the two beverage companies.  BevWire last covered a lawsuit when Pepsico sued The Coca-Cola Company over sports drinks, where POWERade claimed to be the complete sports drink for rehydration.  Not sure how this lawsuit will turn out, but my initial thoughts would be that The Coca-Cola Company wins this one due to the similarities between the two juice bottles.  But I’m not a judge and I’ve been wrong a few times, so we’ll wait to find out in June 2011 to see who wins this one.

Season’s Greetings!

Sorry for the late post loyal readers…my internet was down and I was on vacation earlier this week.  Will recommence posting next week!

Pepsi Max Official NFL Soft Drink

Pepsi Max has been named the official soft drink of the National Football League, moving away from the regular Pepsi soft drink.  This move comes after the Pepsi Max rebranding (BevWire blogged about that a couple of weeks ago) and Pepsi hopes to gain some momentum with the beverage.  The new commercial features New York Jets’ quarterback Mark Sanchez “training” the Pepsi Max driver (also the same truck driver from their earlier spot about the Pepsi Max Diner 2.0).  See below.

It’s an interesting move by Pepsi to change the official soft drink away from Pepsi.  Is this a realization that consumers prefer full taste but no calories in their soft drinks?  A good way to promote a smaller beverage, but what about protecting the sales of the main (read core, bread and butter, most important, etc) beverage in your soft drink portfolio?  And Coca-Cola has been advertising their zero calorie alternative Coke Zero in the Superbowl since 2009, advertising Pepsi Max now might seem like a copycat move.

BevWire doesn’t believe this is a great move on Pepsi’s part.  While the commercial is entertaining, it doesn’t make me any more likely to drink Pepsi Max.  And although advertising a new (or repackaged) product is important, using a medium that was previously reserved for your core offering and replacing it with the new product isn’t the best move.  Advertising dollars for Pepsi can always be allocated elsewhere, but where would you have such a strong audience to remind them about your most important soft drink.  Unless Pepsi believes Pepsi Max is more important than Pepsi, and can also take down Coke Zero, changing the NFL official soft drink to Pepsi Max is not helpful.  Also, Coke Zero’s advertising does not have to focus on comparing with Pepsi Max, making it the clear number one zero calorie soft drink my eyes.  If you’re in first position, why do you have to change your strategy and get into a slugfest with the number two?  The last time Coca-Cola did that, we saw a new cola formula come to the market and the disaster that was New Coke.

It will be interesting to see what happens to Pepsi Max sales now that it is the official NFL soft drink.  Sales will undoubtedly rise, but will it rise enough to justify changing the preferred beverage from Pepsi?  We’ll have to wait and see.

ZICO joins Coca-Cola US Distribution Network

Zico Product Family

Jeffrey Klineman from reported that premium coconut water manufacturer ZICO has decided to switch their distributor to the Coca-Cola network (link here).  This is happening in the Southern California and Boston areas and if successful, may mean full integration into the Coca-Cola distribution network everywhere else in North America.

Though this is not happening in Canada yet, it is still interesting to note the distribution system for newly acquired smaller beverage makers.  When a small or regional beverage manufacturer distributes products, the original method may be to partner with a third-party operator (TPO) to have their product come off the TPO’s trucks, delivered directly to the store.  The simplifies the delivery system for the customer (grocery stores and convenience stores) because in addition to receiving their regular products off of a TPO, they also get these beverages.  On the manufacturer’s end, they can leverage the TPO’s distribution network to gain listings with more customers in addition to promoting with their own sales and marketing staff.

Klineman’s article mentions that new products being distributed through the Coca-Cola network faces complications.  In addition to the product focus reason (selling 12pk Sprite or Diet Coke is a lot easier than convincing the retailer to carry new products), Coca-Cola’s distribution network will increase volume and exposure significantly for ZICO.  For ZICO, this means that the production must be scalable to handle increased demands for the product.  Also, Coca-Cola’s delivery trucks normally carry numerous products to be distributed into the stores, and packing on a few additional cases of ZICO coconut water may seem harmless since it’s just a few cases here and there.  However, each truck carries the delivery order for at least 5-6 customers (in Canada anyway) and the trucks are fully packed before making a trip out of the product warehouse, so a few cases here and there do add up (especially when your original customer base is around 5000, and now becomes 15000 or 20000).

The good thing is that Odwalla (and ZICO) is not distributed through Coca-Cola’s main delivery network in Canada.  This means that the same trucks that deliver the pallets with 2Ls, 12pks, 24pks, 591 bottles etc are not the same ones that distribute the Odwalla premium juices.  Odwalla’s distribution network involves delivery trucks that have a chilled refrigeration system to keep the beverages cold compared the regular delivery trucks that is simply a big metal box on wheels.  Another product delivered through chilled refrigeration is milk, where the delivery network has an increased focus on the delivery method to limit breakage and damages since the product’s packaging is more fragile.  For ZICO, this means that their products will be given greater attention and care unlike the regular Coca-Cola beverages.  There will be an increased emphasis from the delivery standpoint to ensure the products arrive safely and in commercial condition.

So will this delivery model work in Canada?  I believe the integration will work well on the chilled refrigeration system.  With Coca-Cola realizing that consumers are trending toward healthier beverages, focusing on developing a strong network to handle products through this method will be valuable for other brands in the future.  Odwalla is a good example of a beverage that is being managed effectively through this system, and converting other acquired premium products into this delivery network will help the Coca-Cola system.  The only product then becomes a discussion with the grocery store that they should prepare for two separate deliveries from Coca-Cola every delivery cycle – one for the regular set of 2Ls, 12pk cans and juices, and another for Odwalla, ZICO, and other future premium products.