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Imitation might be the sincerest form of flattery, but that’s not much comfort when it’s expressed by the look or shape of a copycat pack leading to a subsequent loss of sales and a creeping dilution of brand integrity.

With more than 55% of sales from their outlets generated by own-label products, the big four multiples are regularly accused of being the major transgressors. Although they’re not the only ones at fault, they have clearly gained the most from what has been a pretty woolly regulatory apparatus for any brand owner seeking to vigorously protect its intellectual property. Even with the introduction of the Unfair Commercial Practices Directive (see below), enforcement is likely to be weak.

Not surprisingly, neither brands nor retailers are exactly queuing up to go public about copycat packaging. Brands have little option other than to seethe inwardly while continuing to tough it out. As British Brands Group director John Noble observes: “It’s surely never good business practice to try to sue your major customer. And if retail own-label products are the biggest culprits, that may well explain why there haven’t been more cases.”

A very few do successfully make it through the courts. In 1997, there was the notable action brought in support of United Biscuits’ Penguin biscuit snack against the Asda own-label Puffin equivalent. However, victory can be relatively hollow; although Puffin was judged to be too closely positioned in relation to the branded product on the grounds of passing off, it is still widely available on Asda shelves.

Remember and recognise
PI3 managing director Chris Griffin says visual identity is crucial in giving brands a competitive advantage: “Consumers don’t read, they recognise. So smart brand owners and smart branding firms try to create distinctive visual elements to help consumers remember and recognise their brands over their rivals’.

“This is a big and long-term investment in visual equity, all too often subject to impersonation at the hands of private label owners. They know that packaging that bears more than a passing resemblance to a legitimate brand can and will mislead the consumer into believing that the impostor has similar characteristics or is of equal quality to the brand, and even is the brand itself. In principle, it’s no different from an artist forging a famous painting and trying to pass it off as genuine.”

Own-label impact
However, affront by brand owners over attacks on intellectual property may mask an altogether different concern: a loss of the higher ground that has its roots in the emergence of supermarkets as the preferred shopping medium.

“A hell of a lot of consumers think that brands are over-priced, so they’re not that bothered about copycats or rip-offs; that’s where own-label has been able to make such an impact,” says Dr Paul Butler of the Smart Packaging consultancy. “I don’t actually feel that sorry for the brands. I think they’ve had it their own way for far too long. The chill winds of competition are blowing, and while they may be able to claim that their content values are superior, in reality most people will say ‘so what’?

“Brands can’t command the shelf-space and the positioning that they used to. They’ve got to find more effective ways of communicating through the pack; without that, they’re dead in the water. It’s going to add to the cost, but that’s where the brand positioning is in any case: as a more expensive item. They’ve got to do something dramatic with their packaging – and dramatic means being innovative and technology driven.”

Straddling both sides of the brand and retail divide with a client base that includes Asda, B&Q and McCains, Elmwood Design chairman Jonathan Sands suggests that as a consequence of own-label ‘me too’ competition, some brands might have lost sight of what it was that established their dominance in the first place.

“Many brands have become lazy,” he says. “It’s about creating an emotional engagement, and a purpose beyond price. You’ve either got to perform better, or else make people feel good about the purchase.

“In the early years the obvious strategy for retailers was to mimic brands; they wanted to say this is going to be similar in performance, but it also carries a big price advantage. In the interim period, however, consumers have grown up with own-label. If you’re a 30-something mum you’ve never known life without it. Core family purchasers just don’t make the same equations as shoppers did 25 years ago, when no one could ever have conceived paying a premium for an own-brand.”

Trading down
“For any ‘me-too’ strategy to work you’re almost guaranteeing your own shelf-space. Own-label is effectively saying that as it can’t beat the brand, it’s delivering a strategy that mimics and lets the consumer decide if that represents a reasonable trade-down. What the brands are now saying in response is that we can’t create a point of difference; in other words, our brands have no functionality or emotional engagement that can fight off a ‘me-too’ strategy. But we’re all living in a competitive world where nobody has a God-given right to earn profits lazily.

“Brands might have had it 20 odd years ago; retailers might have it now. At the end of the day, consumers just want fairness, and they want transparency.”

Elmwood has had the unique opportunity to put its ‘purpose beyond price’ branding philosophy into practice through the launch of its own Make Mine A Builder’s strong tea product, developed in conjunction with leading UK importer Spicers and sold through Luscious Food & Drink.

‘What if’ thinking
First conceived four years ago, Make Mine A Builder’s was launched in April and has since sold more than 30 million cups of tea through Asda and the top 100 Tesco stores, as well as building and DIY retail outlets.

According to Sands, what started as an exercise in ‘what if’ thinking has cost around £1m to make it to market, but has already achieved category-leading product status.

“We saw a market that should have been in growth but was in fact in slow decline due to domination by some large brands that basically hadn’t innovated in over 20 years. To prove our point, we deliberately avoided a copycat strategy, and evolved a competitive product with a clear emotional engagement. If we had a worry it was that people might see it as a gimmick. In reality, when they tried the product and found that it tasted really good, it was as if they were re-discovering what tea ought to taste like.

“Sooner or later it’s likely that we’ll come up against own-label competition, and that’s fine: we’ll take it as a sincere form of flattery and we’ll have to go again.”

UNFAIR COMMERCIAL PRACTICES
Adopted by the European Council of Ministers on 11 May 2005, the directive will be enacted within the UK as of 1 April 2008 and will replace existing laws viz the Trade
Descriptions Act.

While copycat packaging is singled out within the terms of the directive as a practice deemed as unfair under all circumstances, responsibility for enforcement looks certain to be assigned to already over-extended organisations such as Trading Standards and the Office of Fair Trading.

According to research commissioned by the British Brands Group (BBG), approximately 20% of consumers have at some time bought a copycat product accidentally and 30-50% of people believe that there is a link in brand quality between similarly packaged products. These figures suggest that more than 14 million UK households have been affected by the problem.

However, BBG director John Noble does not think the directive will be effective in tackling this problem.

“The beef we have with government is they’ve dropped a provision for private prosecution against copycat packaging in favour of redress only being enforced by Trading Standards and the Office of Fair Trading. That’s not going to be effective; partly because such products tend not to represent a health and safety risk, so are unlikely to be a priority, and because in any case it needs quite an experienced eye to understand elements of packaging that are iconic to a familiar brand.

“We’ve given government evidence to show that copycat packaging can increase the sales performance of a retail own-label by as much as 55%. The solution surely is to encourage brand manufacturers to bring civil actions, which we’ve been arguing for since 1994.”