By Dawn Dolan
The landscape of the alcoholic beverage industry in the new millennium looks dramatically different than the drinks business of the 20th century. There has been a staggering increase in the number of new private label wine brands for retailers and restaurants, while foreign producers have moved into the U.S. market with new brands at a rate never before seen.
“It is more challenging than ever to secure trademark rights and brand recognition in the U.S. alcoholic beverage market, largely due to the number of new producers and new product offerings,” says John Dawson, Partner at Carle, Mackie, Power & Ross LLP. “This is not just limited to new wine labels, the growth in craft beer, cider, and spirits businesses have been substantial, all of which are brand-driven.”
Overall, there are many more alcoholic beverage brands in use in the United States and a corresponding increase in the number of trademark applications and registered beverage trademarks, than there were at the turn of the century. Still, Dawson notes, “Many new producers don’t understand the value of a registered trademark. Even a 1,000 case winery stands to benefit from obtaining trademark registrations for their brands: It gives them the comfort of knowing they can invest their energies in a protectable name that they own, and also lays the groundwork for an exit strategy down the line, should they ever consider a sale of the business.”
The recent scooping up of small, niche brands shows that thoughtful brand building strategies, paired with the appropriate protection of that brand can mean greater security and return for owners. “Being prudent and deliberate in your brand building is crucial,” advises Dawson.
Yes, it is becoming increasingly difficult for producers to secure trademark registration and their own brand identity. As a brand owner, you don’t want to infringe another producer’s intellectual property, especially in connection with the launch of a new brand. “I’ve seen entire businesses fold within months of a product launch, after they spent a ton of money on marketing, but not enough on vetting and securing their own branding,” notes Dawson. “All it took was one trademark infringement lawsuit, and they lost their entire business.”
As these observations demonstrate, the legal side of branding is a critical consideration, and is often neglected in the development of a product. Dawson will be speaking to these issues at the Artistic and Legal Considerations in the Creation of a Great Brand session at the North Coast Wine Industry Expo. This panel will touch on topics such as the importance of selecting a brand and brand identity that you can claim as your own, making sure that the brand resonates with consumers and is consistent with the company’s raison d’etre, and the importance of protecting your intellectual property rights.
In the U.S., if you don’t police infringements of your intellectual property, you can lose your trademark rights. Dawson shared, “Trademarks are an indicator of one particular producer, one source. They represent a certain quality and consistency in product. If several people use the same trademark, there is no assurance of product consistency or source.”
Not only is this topic critically important for newer producers with new brands, but also for those launching product extensions and new SKU’s as well. For existing companies, Dawson says, “This panel will be helpful as far as making them aware of the importance of brand messaging through packaging and design, as well as the scope of IP protection afforded domestically and internationally.”
He notes that because the popularity of U.S. alcoholic beverages has grown in the international export markets, it’s common for producers to start here, but then want to sell in Asia, Europe, and South America, where additional steps must be taken to obtain brand protection. As far as exporting goes, he continues, “What wineries often don’t realize is that their rights in the U.S. might not extend into international markets. Their rights may not be deemed equally sound and valid abroad.”
The Artistic and Legal Considerations in the Creation of a Great Brand panel discussion will illuminate certain considerations as far as what third party copyright and trademark issues can arise that some may not have considered. This session is part of the Business Strategy and Leadership track at the North Coast Wine Industry Expo Conference in Santa Rosa, December 6, 2018. Visit www.wineindustryexpo.com/conference to learn more and register.