In 2019 we?ve seen an absolute explosion in interest around low and non-alcoholic beverages. From VC funding for canned water brand Liquid Death to the seemingly unstoppable hard seltzer White Claw, there is no doubt that this trend will continue.
My friend, Marc Rger, wrote an excellent piece that delves into this market expansion so I won?t get into too many details here. Consumers are trending to consuming low-alcohol or non-alcoholic beverages. The reasons for the trend are multiple. Some folks want to get in shape but still have drinks with friends. Some are just wanting to lead a healthier lifestyle in general in keeping with the wellness movement. Still others may just want to not feel ?out of control? in a world that feels increasingly out of control.
The poster child for the explosion in that market is the hard seltzer brand White Claw. In fact, the beverages are so popular that they are having inventory issues. Of all the problems a company can face that?s one of the better ones to have to tackle. So how did this happen? How did White Claw (who wasn?t the first hard seltzer out there) go from also-ran to first place in the market?
Enter Trevor Wallace
Earlier this year, comedian Trevor Williams made a funny video that, in reality, parodies someone who tries White Claw for the first time, then won?t shut up about it (heads up, contains NSFW language):
With almost 2.5 million views on YouTube, it is safe to say that the video took off. And in the video, you may have noticed he popped off with the phrase ?Ain?t no laws when you?re drinkin? Claws!? That line caught fire, causing an explosion of growth in White Claw sales.
Were you in charge of marketing at White Claw, you would have been thrilled, right? After all, you had what appeared to potentially be a negative situation (a video parodying your customers) actually turn into a viral growth channel for zero capital outlay.
Turns out, there are trademark laws when you?re drinkin? Claws.
Not long after his video went viral, Wallace advertised a t-shirt featuring the phrase ?Ain?t no laws when you?re drinkin? Claws.? And while the company was all too happy to ride the viral growth wave from the phrase, their lawyers saw this use as problematic.
The interesting reason is why. According to them, they need to protect their trademark, which is absolutely true as it sets precedent. Once one entity appropriates your trademark, others are likely to follow. Without this diligence, companies can find themselves in the same boat as Kleenex or Xerox where they became the generic for the category instead of brand.
So they asked him to stop production on the shirt immediately. It?s not clear if they asked and he didn?t, or if they fired off a cease-and-desist letter to compel him to do so. Either way that seems extraordinarily short-sighted.
?D?oh!? White Claw
Even though his intent was to mock first-time White Claw drinkers, Wallace was set to go all-in on supporting the brand. This guy coined the now-famous phrase which caused the brand?s popularity to absolutely explode. Why would you look that gift horse in the mouth? While White Claw?s legal team was correct to worry about trademark issues, the company should have tried every conceivable way to work with him. Be that by setting up a licensing agreement, brand ambassador agreement, or something other than a cease-and-desist. They could have continued a ?win-win? relationship, rather than pursue the ?I win? relationship.
They effectively killed the momentum. And made it possible for another brand to swoop in and get the comedian to rep for them.
Everyone wins and no one wins
Similar to how the potential of craft beer caught big beer producers off-guard, it seems that so too did the hard seltzer market potential. So amidst the schism between Wallace and White Claw, in walks Natural Light. Traditionally an inexpensive, lower-calorie beer brand owned by AB InBev, they too are now offering a low-alcohol seltzer. And they made a deal with Wallace almost immediately. Even flying him into a press event via helicopter on a boat off Catalina Island in California.
Many are praising him for ?chasing the money? and I don?t blame him either. It?s a smart move. But on one hand, it?s not a given that everyone who follows Wallace will switch from White Claw to Natural Light Cantina Lime Hard Seltzer (not just because it?s one flavor either) thus it isn?t guaranteed that it will pay out for Natural Light. On the other hand, it isn?t clear how much brand loyalty White Claw can expect. Especially given that their product is not on shelved due to the current popularity
When it comes to brand and trademarks there are clear examples of when a company absolutely should think ?cease-and-desist.? You have to protect your trademark. But taking an absolutist approach to every potential violation can negatively impact your brand and potential for increased business, not to mention open the door for a competitor. Brands need to look for potential collaborations so they can turn potentially negative situations into win-win growth opportunities. Oh, and all of this hasn?t stopped others from making the same shirt, so?yeah.
Thanks to Marc Rger for the editorial assist.