Cease fire in Cheetos vs Peatos trademark dispute as parties come to ‘amicable’ resolution
Peatos received a cease and desist letter from Frito Lay (PepsiCo) last year arguing that the branding of Peatos (which features a tiger on pack) was “confusingly similar” to Cheetos (which features Chester the cheetah).
While the letter also took issue with other aspects of Peatos’ packaging - which Nick Desai, CEO at World Peas brand owner Snack it Forward described at the time as “throwing a bunch of stuff at the wall and seeing what sticks” – Frito-Lay “had a particular issue with the tagline,” he told FoodNavigator-USA.
“I was surprised it was such a big deal in the scheme of things as to us it was just a silly tagline that was amusing but doesn’t seem harmful, so I was a little bit surprised by how offended they were, but everyone was reasonable and we have removed the tagline.
“I don’t feel strong-armed. It was a bit of a distraction at the start, but no money has changed hands. We ultimately had to make a decision: Do we really want to challenge a large company over something that is not critical to our brand? For us the brand name is integral, but I don’t think we ever intended the tagline to be permanent, so it was a pretty easy decision.
“The real battle is not going to take place in the courts, but in the hearts and minds of consumers and on the retail shelves.”
Attorney: How long will it be before the next fight begins?
Kevin Bell, managing principal at law firm Porzio, Bromberg & Newman, told FoodNavigator-USA that he was "not surprised that Frito-Lay's "ask" was to have the tagline removed. That was probably taken as more than healthy competition between companies by Frito-Lay. I think that if Snack it Forward (Peatos) can move on as a brand without further interference or legal threats from companies like Frito-Lay, that its concession on the tagline was a very good idea. It frees them up to focus on business and not litigation."
He added: "The more any company shows success, the more they will face legal challenges with competitors anyway. I think the question is how long will it be before the next fight begins.
"Snack it Forward has filed for other trademarks like "Dalito", "Daalitos", "Favoritos". I assume Frito-Lay looked into what else they were pursuing and did an analysis as to how much they needed to address it now, if at all. Snack it Forward appears to be messaging they intend to stay close to the line of a potential legal threat again. It usually comes down to whether the business risk is worth the reward."
Peatos is not a niche natural brand
Made from pea and lentil flour, fava bean protein, pea fiber, high-oleic safflower oil, rice, and seasonings, Peatos target consumers that want the taste and texture of Cheetos (which are denser and crunchier than puffs), without the empty calories, said Desai.
Peatos snacks have 4g protein [twice that of Cheetos], 3g fiber [three times that of Cheetos] and 130 calories [vs 160 for Cheetos] per serving with no synthetic colors, flavors or added MSG, coupled with less fat [8g vs 10g] and less sodium [200mg vs 250mg].
And they are squarely targeting mainstream consumers and retailers, he said: “Right now there is one behemoth with brands like Doritos and Cheetos with pretty universal appeal and they market their snacks based on taste and fun, and then you have hundreds of smaller guys out there with more niche products on the better for you side, where the branding is all about nutritional value, or doing good.
“We want to bridge the gap between the two. This is not a niche natural brand and we didn’t want to be a goody two shoes brand. That’s not fun, it’s not exciting.”
We have very good repeat rates - equal to Cheetos in some cases
Currently, Peatos are stocked in the produce aisle in leading retailers including Kroger, Safeway, Albertsons, Fairway Markets, Meijer, Ahold, Wakefern, Amazon and Walmart, with tests about to begin in 7-Eleven stores, said Desai.
"This year we're focused on brand building and building our teams in the field in key markets like southern California, Dallas, Boston, Portland, and San Francisco. We have very good repeat rates - equal to Cheetos in some cases. We know that families with kids is one key segment, plus younger shoppers, and that we do far better in premium and upscale locations.
"One of the things that has been exciting is the number of people that tell us that the product tastes better than Cheetos. When we started we knew that we could compete in the better for you world, but we didn't know if we could play in the junk food world, but it seems that we can."
The brand - which is backed by some high profile food industry veterans including Lenny & Larry's CEO Apu Mody (a former president of Mars Food North America) - is looking to raise $10-15m by Q3 to fuel its growth plans, he said.
“We would like to commend Frito Lay on its cooperative attitude toward reaching a resolution that works for both parties.”
Nick Desai, CEO, Peatos
The Polaroid factors...
The factors courts use to decide trademark infringement cases are often referred to as 'Polaroid factors' because they come from a case involving the Polaroid company (Polaroid Corp. v. Polarad Electronics, Corp., 287 F.2d 492 (2d Cir. 1961), and include:
Strength of the trademark; similarity of the marks; proximity of the products and their competitiveness with one another; evidence that the senior user may 'bridge the gap' by developing a product for sale in the market of the alleged infringer’s product; evidence of actual consumer confusion; evidence that the imitative mark was adopted in bad faith; respective quality of the products; and sophistication of consumers in the relevant market.