UPDATE: Nov. 16, 2021: Nestlé USA has settled with Danone North America after filing a lawsuit in March claiming the company's Silk brand coffee creamers copy unique branding and packaging designs from its Coffee-mate Natural Bliss line.
Bloomberg Law, citing federal court filings, reported that Nestlé filed a stipulation of dismissal with prejudice. The publication said Nestlé and Danone told Judge Leonie M. Brinkema that “the parties have settled and resolved the disputes between them and the claims asserted in this action.” No details of the agreement were released.
- Nestlé filed a lawsuit against Danone claiming the company's Silk brand coffee creamers copy unique branding and packaging designs from its Coffee-mate Natural Bliss line, the Switzerland-based company said in a federal court filing in Virginia.
- Nestlé, the world's largest food company, said its French competitor is modifying its product to "gain an instant marketplace boost" and "freeride on the goodwill" it has built in the category. The company, which estimated it spends millions of dollars each year to promote and market Natural Bliss, said Danone is copying parts of its package, including the color and cap of the bottle and light purple color band around the bottle's neck listing the flavor.
- In a statement provided to Food Dive, a Danone North America spokesperson said the company was "disappointed by the actions taken, and we strongly disagree with the allegations made."
Liquid coffee creamer sales have risen 18.2% in the last 52 weeks ending Feb. 27, 2021, to $3.6 billion, according to data provided by Nielsen. This is up from about $2.45 billion in sales only four years ago. The category continues to be dominated by Nestle's Coffee-mate and Danone's International Delight.
It's no wonder that Nestlé is moving to protect its turf in the creamer space, especially with more consumers using the additive in their morning coffees while they work from home during the coronavirus outbreak. And, plant-based options in the category are growing in popularity. Silk was acquired by Danone as part of its $12.5 billion purchase of WhiteWave in 2017.
"Danone easily could have used different design elements for its packaging, as it has done in the past," Nestlé said in its filing. "But it chose to copy the market leader. Danone's intent is obvious and inescapable: to gain an instant marketplace boost and acceptance by mimicking Nestlé's packaging design and elements."
Nestlé is seeking to enjoin Danone's use of its copycat packaging designs and to recover actual damages, Danone's profits, and other relief, including attorneys' fees and cost, the company said.
Along with what's inside, packaging can be a big factor in deciding whether a shopper will decide to buy a product. A study by Shorr Packaging last year found packaging is important for seven out of 10 individuals. And a 2018 Ipsos study revealed 72% of consumers said the design of a product’s packaging often influenced their purchase decisions.
In many cases, packaging can boost sales of an iconic brand or provide a much-needed lift to one that is floundering. Coca-Cola started its "Share a Coke" campaign in 2011 where people could personalize the beverage with their name, and in 2014 saw an increase in sales after it ran it in the U.S. Nestlé's Lean Cuisine redesign of its packaging helped drive a sales increase of $58 million in the following year.
One criticism levied by newcomers such as Chobani against the creamer category is that many of Danone and Nestlé’s creamers are made mostly of vegetable oil and sugar. As shoppers place a greater importance in healthier, clean label offerings, sales of plant-based and real milk creamers have surged.
It makes sense that Silk's plant-based creamer, and Nestlé’s Natural Bliss line, made with ingredients such as real milk, coconuts and almonds, are fighting it out over packaging in an attempt to woo and keep consumers in this fast-growing area. Similar packaging designs could shift sales over to one brand if a hurried consumer in the store can't immediately tell the difference.
These brands are not only competing against each other but they are also going up against upstarts like Califia and Laird Superfood, which has its own line of creamers, including one made with mushrooms. With food makers looking to protect every competitive advantage they have, it's not a surprise that packaging is one the latest battle grounds among companies looking for growth.