David and Goliath in the making or just another storm in the teacup?
Rite Foods’ Fearless energy drinks, (Red Berry and Classic brands) were launched into the Nigerian market in June 2017 and surprisingly took the crowded energy drinks market by storm. The dictionary defines fearless as “brave and free from fear.”
It had the photo of a lion boldly splashed on its packaging, almost like shouting out a warning to competitors.
Three years later in 2020, Coca-Cola came up with its own brand, strongly named Predator, which the dictionary defines as “an animal that naturally preys on others.”
Coca-Cola Beverages Nigeria at the entry point proclaimed that it was “proud to redefine the affordable energy segment by introducing PREDATOR GOLD in a 400ml Pack. It will give you the edge to rule your kingdom. Predator Energy, the first global affordable energy drink exists to ignite your hustling spirit and allow you to thrive not just survive.”
It also had the symbol of the lion and undisputed king of the jungle on its label.
Who owns the lion?
In May, NBC Coca-Cola and Rite Foods Limited, started the war, first with words. The clash was over the lion insignia embossed on both brands. According to a report by This Day’s Raheem Akingbolu, Rite Foods fired the first legal shot by dragging NBC to the Federal High Court Lagos for allegedly infringing on its lion trademark.
The plaintiff, Rite Foods Limited, had filed a motion ex parte for an interim injunction against the defendant, NBC, restraining it from further promoting or using any sales promotion material for its “Predator” energy drink in a manner that infringes or passes off or that is capable of infringing or passing off the plaintiff’s “Fearless” energy drink, until the interlocutory application for an injunction is determined.
NBC denied the allegations. Could one argue that no one can lay claim to ownership of the lion? Or is there a compelling trademark infringement case here?
Facts matter: What’s the latest?
According to the Legal desk NG, “Rite Foods Limited has asked a Federal High Court sitting in Lagos to convict the Managing Director, Nigerian Bottling Company (NBC), Mr. Mathieu Seguin for failure to appear before the court and alleged flagrant disobedience to an order issued by Justice Chukwujekwu Aneke.”
Rite Foods’ counsel restated their case that NBC and its managing director are restrained from promoting or using any material for its Predator energy drink in a manner that infringes or passes off Rite Foods’ Fearless energy drinks.
NBC’s legal team opposed the application of Rite Foods Limited, requesting the court to convict the managing director for alleged contempt of court. NBC Coca-Cola therefore asked the court for more time to respond to the claim by Rite Foods and present the facts
NBC Coca-Cola maintains that the Predator Energy drink and the Predator lion brand logo had been in existence and use in many markets even before the launch of Fearless by Rite Foods in Nigeria.
Coca-Cola will hinge its argument around this point when the case comes up for hearing on November 15th. The whole case could be flipped if they are able to show the judge irrefutable evidence of the previous existence of the lion packaging.
With all the twists and turns, a quick fix is not in sight and this case could be prolonged.
NAFDAC: Where are you?
The question many are asking is why NAFDAC and APCON have not been brought into this matter, since NAFDAC is the regulatory body for both product and packaging approvals.
According to Barrister Anolefo of Emeka N. Anolefo & Co, “NAFDAC regulates all foods and drugs. Without NAFDAC approval you can not put your food and drinks on the Nigerian market even if you have a registered trademark. They also regulate the labeling of the product.”
Barrister Anolefo who is an expert in trademark law and intellectual property added that “NAFDAC should perhaps be joined in the suit as a party if both have been granted a license by NAFDAC.
“The logo lion is part of the trademark.- word and device. The Registrar of trademarks could also be joined if both were issued certificates of registration because of the lion. Both the NAFDAC license and the trademark certificates issued will be affected. The court may ask one of the parties to make changes in the packaging, but only if the evidence provided is irrefutable.”
The $57 billion global energy drinks market
Global energy drink sales climbed to $57.4 billion in 2020 and is expected to exceed $60 billion by 2025.
The three biggest players in the global market are: Red Bull, Monster (Coca-Cola), Rockstar (Pepsi)
Red Bull is sold in 171 countries. Sales are surging in emerging markets, such as India (up 37%), Brazil (up 30%), and Africa (up 25%).
According to the privately-owned company, more than 7.9 billion cans of Red Bull were sold in 2020. That’s a jump of 5.9% from 2019 sales.
California-based Monster Beverage was founded in 1985 and began selling Monster Energy drinks in 2002 after unsuccessfully launching another drink to compete with Red Bull in 1997. Monster is the second largest energy drink company with a market share of 39% after Red Bull.
The company has eight different brands, including the original Monster drink, Burn, NOS, and Predator. The drinks are sold in more than 100 countries including Nigeria.
In 2014, Monster entered into a long-term strategic partnership with Coca-Cola which purchased a 16.7% stake in the company. It immediately tapped into Coca-Cola’s huge distribution network.
Rockstar Energy was introduced in 2001.17 Its marketing strategy is around action sports, motorsports, live music, and models. Rockstar is sold in convenience and grocery stores in more than 30 countries.
PepsiCo bought Rockstar in 2020 for $3.85 billion and expanded its footprint to more than 200 countries.
The health angle and “drink responsibly”
Advertisements for energy drinks are plastered on the walls at sporting events and on the jerseys of leading athletes. Makers of energy drinks claim their elixirs will boost your immune system, enhance your performance and help you feel energized.
No wonder 30 to 50 percent of adolescents and young adults say they buy energy drinks.
But there is the health angle and concern with energy drinks. They are loaded with sugar, sodium and caffeine – often twice as much as coffee and eight times as much as a soda.
A typical 16-ounce energy drink contains between 150 to 280 milligrams of caffeine; larger cans have up to 500 milligrams of caffeine.
At the end of the day, good old plain water is the best hydrating beverage on the planet.
5 marketing and PR lessons on the energy drinks battle
While the lawyers battle the case in court, there are brand and public relations lessons to be learnt in this case study. Here are the top 5 take-aways:
David vs Goliath
In almost every David vs Goliath case, sentiment and the weight of public opinion tend to swing in the direction of the David, irrespective of the legal outcome.
Control the narrative
The war of words and the publicity will raise awareness for both the Predator and Fearless brands in the marketplace. How this converts to increased market share will depend on who commands the narrative.
Creativity or Me-too
Creativity always trumps “me-tooism”, which is a common practice in the Nigerian marketplace for fast-moving consumer goods.
Challenge the status quo
Rites Foods redefined the category through a pack price innovation. They challenged orthodoxy and launched energy drinks in plastics and resealable packs. Other big players soon copied the initiative.
In marketing and PR, it pays to challenge conventional thinking.
Blue and Red ocean
The first in the market will always have the first-mover advantage. New entrants to any market must find creative ways to offer a distinct advantage either in brand positioning, superior offering or category redefinition.
In other words, new players in a “red ocean” hyper-competitive market must strive to create a new uncontested marketplace, to command a fresh blue ocean.