© Metcalfe's Skinny
Two of America’s biggest snack manufacturers – Amplify Snack Brands and Snyder’s-Lance – are set to lock horns over rival brands of popcorn, after Amplify launched legal action against the latest brand offering from Snyder’s-Lance.
Through its Kettle Foods subsidiary, Snyder’s-Lance bought the remaining 74% stake in British popcorn brand Metcalfe’s Skinny last year, and now plans to extend the availability of the product to the US market.
But Amplify Snack Brands has filed a lawsuit in a federal district court in Austin, Texas, claiming that Metcalfe’s Skinny would infringe on its own Skinnypop brand – the most established player in the US popcorn market with retail sales last year of $200 million.
Amplify alleged that a rollout of Metcalfe’s Skinny in the US would amount to ‘wilful infringement’ of its trademarks and cause confusion among consumers. The company is seeking to get the launch halted.
But the move will be seen by observers as an attempt to cling on to Skinnypop’s share of the market, amid blossoming demand and rising competition.
Analysis: Confusion for consumers, or sour grapes?
Both brand propositions are built on the idea that popcorn is a much healthier alternative to traditional potato chips – the largest driver of demand in the global popcorn market in recent years. Nutritionally, there’s little difference between the two brand. But Amplify has launched this lawsuit against Metcalfe’s Skinny because it claims that the brand, and in particular the use of the phrase ‘skinny popcorn’, would infringe on its own trademarks. It’s now a case for the court whether low-calorie snack brands, launched at different times in different countries, have any proprietary claim over their generic description as ‘skinny’.
But it looks like Amplify is floundering in the face of competition from one of its biggest competitors; Snyder’s-Lance owns brands like Kettle Chips and Snack Factory, and its net revenue increased to $2.1 billion in 2016/17. The Skinnypop brand is the largest brand of popcorn in the US. FoodBev understands that its market share lies at around 25% of the overall category, with Smartfood – sales almost $20 million lower in 2016 – its nearest competitor. Such is the rapid expansion of the popcorn market in recent years, there is only a small number of major brands; in fact, according to statistics seen by FoodBev, private-label products are collectively the fourth largest player in US popcorn.
So Snyder’s-Lance decision to buy out Metcalfe’s Skinny last year, and now its apparent plans to bring the product to America, will have prompted fears among Amplify’s top brass that the market is set to be fragmented further. It’s now the federal court’s decision whether the company has a case here, or whether it’s just sour grapes.
Metcalfe’s Skinny is one of the most widely available brands of popcorn in UK retail, along with the mainstream Butterkist and challenger brands Tyrrells Poshcorn and Propercorn. There’s no doubt that Kettle Foods’ acquisition adds a sizeable string to Snyder’s-Lance’s bow.
Amplify Snack Brands CEO Tom Ennis said: “We believe in fair play and fair competition. Snyders-Lance’s and Metcalfe’s effort to copy our brand name is flattering but not how trade competitors should behave.
“Even now, infringing products are being sold by Snyders-Lance and Metcalfe that include false registration marks and which are attempting to trade off of the goodwill of our Skinnypop brand.
“We look forward to defending our mark and securing a just result from the Court.”
Snyder’s-Lance shares were down $0.03 in yesterday’s trading, before announcement of the lawsuit.
© FoodBev Media Ltd 2017