Licensed Flavors vs. Mimicked Flavors in Sports Nutrition

Joshua Schall, MBA
Jul 8, 2019 · 6 min read
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Believe it or not, I have been working directly (or indirectly) in the sports nutrition industry for 13 years. In sharing that information, I was only hoping to establish the fact that I have been around the business-side of sports nutrition, long before “every” product tasted great.

For those that are newer to sports nutrition products, here is my rendition of the backstory around flavor innovation:

  • Pre-Early 2010s — the choices of flavors were pretty limited. It was common for brands to stick with the “big specialty retail winners” of grape, watermelon, and fruit punch. If you consumed these flavors in the early days, they were always either too chemical, too sweet, or too tart. In this era, sports nutrition brands cared more about the product producing results, than how well it tasted. Since there wasn’t much for options, customers purchased these products and it created a false positive for brands to believe consumers didn’t care about taste as much as results.
  • Early 2010s — this was around the time when you started to have a few sports nutrition brands push the envelope on flavoring. The market started to fill up with flavors like Cherry Limeade, Raspberry Lemonade, Orange Mango, and many others. As customers got a taste for this better flavoring experience, they started to show support with a change in their buying behavior.

Man Sports Changed the Game

In 2014, Man Sports launched a series of “candy flavors” that mimicked the nostalgic candy we all loved to eat as kids. These weren’t the normal “run of the mill” enhanced flavors from a few years earlier, but instead modeled after Sour Patch Kids, Nerds, and Starbursts. To further cement the connection in a consumer’s mind, they named them creative assimilations, such as Sour Batch, Dorks, and Starblaze.

This proved successful for Man Sport, as they gained popularity and revenue growth. Due to that positive result, it started a chain reaction in the “me too” sports nutrition industry. This trend has continued to accelerate as the years have gone by, as just about every brand has taken inspiration from Man Sports.

GHOST Lifestyle Upped the Ante

In 2017, GHOST Lifestyle saw the trend of flavor innovations and decided to take it a step further and seek out licensing deals with the CPG portfolios that owned the iconic brands that the other sports nutrition companies were seeing success by mimicking. The first GHOST authentic licensed flavor came in the form of Warheads. This officially licensed and partner-approved flavor system was combined with their pre-workout product Legend.

Since the Warheads licensing deal, GHOST has doubled-down on the strategy and added several other ones, such as Sour Patch Kids, Swedish Fish, Welch’s Grape Juice, Sonic Drive-In, Chips Ahoy and a few others approved that are still currently in development.

Where the Debate Lies Today

Admittedly, this debate mostly surrounds GHOST (and its loyal fans) vs. the rest of the sports nutrition industry. Why? There isn’t many brands on the same side as GHOST. Other sports nutrition brands haven’t been able to easily copy what GHOST has done because of the difficulty approving license deals.

The debate mostly surrounds if sports nutrition brands should be allowed to use mimicked flavors and also be able to call them something similar to help consumers easily make the connection?

The first part is easy…yes! Here is a bit of inside information…the way a brand makes a mimicked and licensed flavors is essentially the same. In both cases, these flavors need to be re-built for the specific supplement base. There isn’t some magic Sour Patch Kids spray-dried flavor system that masks all the nasty tasting nutracuetical ingredients. Remember…Sour Patch Kids are basically sugar! Even when the licensor have dried flavoring (see GHOST Welch’s Grape Juice), you still need to adjust levels of “other ingredients” that are below the Supplement Facts. The difference in mimicked and licensed flavors comes when the licensor approves the sports nutrition product as passing their taste expectation for their brand.

The second part is not as easy…

Usually when I am trying to answer a difficult sports nutrition question, I try to take a step back and view/apply it in the framework of a more mature consumable CPG category. In this scenario, I looked at through the lens of the food and beverage CPG industry. Many of you have went grocery shopping in the last several weeks and likely seen tons of similarly packaged competing products. These competing food and beverage products likely had similar color schemes, names, and logos. The difference is that those similar products usually come in the form of retailer-owned private labels. While these products are indeed similar (and sometimes made at the same manufacturer), the retailer is trying to provide an economical option to the branded item for its shoppers.

While that might not be a 1:1 comparison because of the brand-retailer relationship, you do see it happening sometimes with competing branded products. A recent example is Orgain’s newly launched protein bar, that looks almost exactly like RXBAR.

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Are Mimicked Flavors and Brand Elements Fair or Legal?

Before I get myself into trouble, I am not an intellectual property lawyer (or any lawyer for that matter), so this section is merely my understanding of the subject matter…

When we are talking about fair or legal, we are talking about will it cause brand confusion in the eyes of the consumer. While no studies have been done on this niche focus, there has been various consumer studies on branded vs. private label products. These have shown that;

  1. If the logo/colors look similar, it can cause a grouping of branded and private labels, that brings the premium value associated with the branded product down. This can be caused because consumers think the private label is actually endorsed by the brand owner or made at same facility
  2. If the logo/colors don’t look similar, it sustains the premium value associated with the branded product

With brand confusion, it is also important to consider how consumers shop and how that differs from application of intellectual property law. To consider this difference, its useful to consider each sequence of cognition.

For a consumer shopping, they first recognize color, then shape, symbols, and then words. That is why you see private labels that are usually the same color schemes as branded products. By doing that, it groups the private label and branded product together in the consumer’s eyes.

Alternatively, trademark law is applied in an inverse sequence to the consumer’s perspective. In my understanding, they look at closeness to name first, then symbols, shape, and colors.

So, what does this tell us about the current debate around licensed partnerships or simply using mimicked flavors and brand elements?

Sports Nutrition 2020 Thoughts

You hear a lot about “lack of innovation” in the sports nutrition industry and that is misguided IMO. Yes, innovation in product formulation might be stagnant, but innovation is everywhere in the CPG industry (especially the sports nutrition category).With the hyper-competitive environment currently in the category, sports nutrition brands will need to focus on innovation in the form of creating “exclusive” experiences. There is not a single “best” way to do that, but authentic licensed flavors does provide exclusivity to the consumer experience. While this strategy has been integrated successfully by GHOST, I do not believe it will create the same level of “copy cats” that was seen when mimicked flavors hit the market.

Looking for the next move? It will come when the first CPG portfolio seeks out a sports nutrition brand to partner with, to launch a co-branded mass food and beverage product.

Do you want to learn more about this subject? Click on the embedded video from my YouTube channel below!

If you enjoyed this article, be sure to share with colleagues and let me know your thoughts in the comments.

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