Recently, the competition and comparisons between private-label products of some major brands and retailers have sparked legal disputes. Among the most notable cases are Lululemon’s lawsuit against Costco, and Smucker’s lawsuit against Trader Joe’s.
According to The Wall Street Journal, Smucker has been selling its private-label crustless snacks, known as Uncrustables, since the 1990s. This pre-made peanut butter and jelly sandwich series, not only a lunch staple for millions of students but also enjoyed by lawyers and professional athletes, generated sales of around 9.2 billion dollars in the past year.
In a recent lawsuit filed in federal court in Ohio, Smucker alleges that the “crustless peanut butter and strawberry jam sandwich” introduced by Trader Joe’s this summer is a “blatant copy”, imitating not only the similar pastry-like shape and “unique edge wave pattern edge” but also the packaging and iconic blue markings. Smucker is seeking compensation for financial losses and the destruction of Trader Joe’s stock.
Trader Joe’s has not responded to requests for comments from The Wall Street Journal.
The Smucker dispute is the latest spotlight in the long-standing struggle between national brands and store private labels. The relationship between these two camps has not always been harmonious. Store private labels typically have lower prices but higher margins for retailers, often coexisting with products of major brands.
According to the market research company NIQ, private-label products accounted for 20% of total store sales in the past year. While American consumers are grappling with rising food prices, sales of supermarket private labels have been steadily growing, increasing by 3.9% year-on-year.
Diane Covello, director of the University of Connecticut Law School Legal Clinic, stated that the intensifying competitive pressure may lead companies to file lawsuits: “It is common for companies to file lawsuits when they see their competitors gaining market share continuously.”
Some other companies are also resorting to litigation to protect their brands. Mondelez, the manufacturer of Oreo, Ritz, and Wheat Thins, sued discount grocery chain Aldi in May, accusing the store of imitating some of Mondelez’s signature snacks. Aldi has not responded to requests for comment from The Wall Street Journal.
In June, Lululemon filed a lawsuit, accusing Costco of selling counterfeit jackets, sweatshirts, and pants of its brand. In a court filing, Costco denied infringing on Lululemon’s intellectual property.
Smucker has previously fought for the intellectual property rights of its Uncrustables. In 2020, the company sent a letter to Chubby Snacks, alleging that the latter’s peanut butter and jelly sandwiches were too similar. Chubby redesigned their sandwiches into cloud shapes.
In 2024, Smucker sued Chubby again, alleging that the company illegally used the crustless snacks trademark in online advertising. The two companies reached a settlement in July, with Chubby ceasing operations.
A spokesperson for Smucker stated that the company does not oppose other companies selling similar products, focusing on protecting the high-quality products of the Uncrustables brand and its unique trademark design, and preventing counterfeit products from deceiving customers.
Michael Kelber, chairman of the law firm Neal, Gerber and Eisenberg, stated that to win the lawsuit, Smucker must prove that consumers could potentially confuse Trader Joe’s sandwiches with the Uncrustables.
Kelber mentioned that in recent years, more and more brands have been suing over counterfeit products, indicating a rising trend.
Over the decades, private-label products have proliferated in supermarkets and large shopping centers, offering a wide range of products from Greek yogurt to bacon. Analysts at Jefferies pointed out that breakfast syrup, dog food, and meat substitutes have seen the largest increase in market share recently.
Susan Morris, CEO of supermarket operator Albertsons, stated during a phone conference this month that more shoppers are opting for private-label products to save money. “We see consumers continue to focus on value and shift to lower-priced options,” she said.
Retailers selling private-label products have invested heavily over the years to catch up with major brands in terms of quality and variety. A survey in 2023 by McKinsey showed that 80% of respondents stated that one of the primary reasons for purchasing more private-label products is that their quality is comparable to branded products but at a lower cost.
Food consultant Phil Lempert stated: “Baby boomers and earlier generations really saw private labels as inferior products, but Generation Z and Millennials don’t see anything wrong with private labels at all.”