‘Tis the season past of warm and fuzzy feelings to all. Or so the corporates would have us believe, as they do their annual festive fandango of pinching our cheeks with one hand and our wallets with the other.
After all the fake bonhomie, the heart sings when a business behemoth that spends mega-millions on trying to influence positively the public’s perception of itself, screws up the simple stuff. Nothing quite like watching the consternation on a corporate hypocrite’s face when it puts a shotgun to its foot and pulls the trigger, only to find it is loaded.
This time it was Woolworths, the retail brand that more than any other has captured the imagination of the chattering classes with its green credentials: its wholesome, organic foods: and its proclamations of fair trade commitment to the small trader.
That’s not the experience of Frankie’s Olde Soft Drinks, a KwaZulu-Natal micro-manufacturer with a cult following. After painstakingly building its brand of retro-softdrink tastes, it tried to get onto Woolies’ shelves. But within a year of Frankie’s being shown the door, Woolworths brought out its own nostalgia-brand that looks disconcertingly similar.
Woolies proclaims innocence, arguing that “retro is not a new concept … We have used vintage design for many years in products [and] flavours such as cream soda, ginger beer and cola have been widely used internationally for decades”.
Many are unconvinced. A food website straw-poll drew a couple of thousand quick pre-Christmas votes, of whom only 23% agreed with the Woolworths defence, while two-thirds thought it was “blatant theft” deserving of a consumer boycott. Since then a bunch of Frankie’s fans have set up Facebook page imploring Woolworths to “stop faking Frankie’s — stick up for the little guy”.
The retail giant appears taken aback by the public ire that the launch of their clearly imitative but plausibly legally defensible range has aroused. Though the anti-Woolies campaign appears to have run out of steam as consumers concentrate on holidays rather than corporate shenanigans, Woolworths must be hoping that the new year does not bring new impetus to its critics.
Mike Schmidt, founder of Frankie’s, says that while he obviously has no ownership of the retro or cola concepts, Woolworths “used the strapline directly off of our product and stuck it on to their bottle. It’s a virtual clone of Frankie’s, creating customer confusion”.
Woolworths concedes that it met in a “very high level meeting” with Frankie’s prior to launching its own range, but says that no intellectual property was discussed. It never mentioned anything about planning its own range but, says Schmidt, instead declined Frankie’s on the grounds that it was “out of character” for the Woolworths’ brand.
This is where Woolies plunges into morally murky waters. It fails to explain why it would meet with Frankie’s at a “senior buying level”, with the launch of its own line imminent. And when such a meeting occurred, why would it not have informed Frankie’s that there was a conflict of interest?
Finally, let’s assume Woolworths was guileless albeit dumb through this whole process, despite its many lavishly paid executives. It is still inexplicable that it would launch a product line that at first glance over a crowded supermarket appears indistinguishable — in individual product names, bottle-neck shapes, flavours, labelling colours and typefaces — from those of a competitor that it refused to stock because the product did not chime with the Woolworths’ brand.
Many, if not most, corporates rely on their deep pockets and market clout to intimidate smaller rivals and gouge small suppliers. Woolworths, despite all its sanctimonious marketing pap, is behaving no differently. If it wants to retrieve the situation it needs to produce a heartfelt mea culpa and back off. Or is one to understand that corporate muggings, like free-range eggs, are synonymous with the Woolworths’ brand?
Does Woolworths actually have a manufacturing plant for the product, and for how long have they had the plant, or is a pal of the CEO ,or other connected party, now manufacturing the same product as Frankie showed them?
Sorry to say, but despite Frankie’s believing they have a sole claim on retro branded soft drinks, they are mistaken. Retro look is retro look. They’re putting up a stink because Woolworths didn’t see the value for themselves in buying retro branded softdrinks from a niche producer when they could simply produce it themselves. It is called a “free market”. Stop being such hipster whiney pants people and get on track with the real world. Woolworths hasn’t done anything “wrong” except in the eyes of an embittered vendor who wasn’t able to sell ‘his’ idea and profit from it, and now he’s off crying “unfair corporate bully” to every ‘net crusader’ with a chip on their shoulder. Frankie’s should just be happy with the publicity they got and keep producing their 800 bottles of soda pop a year. /rant
Woolworths is headed by chairman Buddy Hawton, a prominent business figure for at least thirty years, and deputy chairman Simon Susman, a scion of the company’s well regarded founding family. It therefore surprises me that, when the kak hit the fan in this matter, they did not demand that group chief executive Ian Moira call off his hunting hounds and issue a public apology. With Bloomberg calculating Moir’s total emoluments for 2011 at just shy of R20 million, and with business ethics presumably part of the course for his MBA, Woolworths shareholders certainly had a right to expect something better than the company’s evasive response to the charge that it had shafted Mike Schmidt. The damage to the Woolworths brand may already be considerable. Throw in growing public scepticism about just how liberated free-range chickens are, and the feeling grows that Pick ‘n Pay-type management problems are beginning to assail Woolworths too. New CEOs lacking the vision that inspired the founding families, or just the arrogance of power?
My earlier comment added an ‘a’ to Moir on first mention. Unfortunate, but not as egregious as the company’s 2011 annual report describing Susman as ‘deputy chariman’ (sic). I mention it only because a quoted company’s annual report is its most important communication with the public, and is therefore read in-house by many pairs of eyes before being published. That such a visible error could get through supports my feeling that things at the group are beginning to slide.
As someone who is involved in a small business, I know only too well the difficulties of marketing a product when you are underfunded and trying your best against much bigger entities.
I agree that Frankies do not own the rights to the retro look, and even they admit that their recipes are inspired by similar overseas products, but there is something underhand about arranging a meeting in June to try and sell your product, being told it doesn’t fit with the brand, and then having the company you met with produce the exact same product within six months of your meeting. It comes across as “hey, that’s a good idea, we have the ability to produce it more cheaply, so let’s steal it instead of paying for it and make ourselves a bigger profit.”
I would be very interested to know where the Woolworth’s drinks are being made – it wouldn’t surprise me to hear that they are being imported from China…
We all know that competition and choice are good things – so why doesn’t Woolworths do the right thing and stock BOTH products?
Mike Schmidt – CEO and head whinger at Frankie’s – also claims to have invented cinnamon cola. Apart from showing that he’s full of it, this must come as a big surprise to the guys at Dr Pepper who’ve been making it since 1885 from a folk recipy
@ William Saunderson-Meyer
Take a hand for:
“…pinching our cheeks with one hand and our wallets with the other”
But for:
“ … bonhomie — business behemoth; …public’s perception
… screws up the simple stuff.”
summarised in a single sentence synopsis -
take an ‘A” for artful alliteration and an articulate annotation.
A complete storm in a teacup. Frankie’s have got the publicity out of their complaint that they wanted, now let’s move on. Woolies has done nothing wrong.
@Iqshan: I’d be interested in hearing where you get your facts from. I did a google search for cinnamon cola, and came up with nothing other than Frankies. I also did a search for cinnamon in Dr Pepper, and, although there is speculation about it, or nowhere could I find anything definite to say it contains cinnamon – not even on websites for people with an allergy to cinnamon.
The only other thing I could find was again speculation: “Cinnamon or cinnamon substitute (Cassia) is speculated to be in Dr. Pepper, but it is not revealed due to proprietary reasons. In the US, the ingredients are: Carbonated Water; Imperial Pure Cane Sugar [or High Fructose Corn Syrup and/or Sugar,]; Caramel Color; Phosphoric Acid; Artificial and Natural Flavors; Sodium Benzoate (Preservative); Caffeine.”
Mike Schmidt says on their Facebook site: “We have never claimed ownership over the flavours that we produce. We are however committed to re-introducing the tastes of yesteryear and as many of these are no longer available in South Africa we have looked abroad for our inspiration. You will find all of our flavours, except Cinnamon Cola, within the European, UK and USA markets.”
If you’re going to accuse Mike Schmidt of being a whinger, perhaps you should get your facts right?
Most super market chains and franchises market an “Own Brand” version of well known brand leader products made by the biggest companies around. This is obviously not popular with the original manufacturers, but they tolerate it on the basis that the Own Brands are packed and labled in distinctive corporate designs that are clearly those of the franchise concerned. No chain would get away with a Colgate Toothpaste lookalike pack with similar straplines etc.
While Woolies carries few branded products and prefers to use almost exclusively “own brand” livery, I dont recall a Woolies own brand that has the specific Frankies type “retro” look that is the chief justification for what amounts straight plagiarism
Woolies would never try such a cheap trick with Coca Cola, Shweppes etc
heheheheheee Charlotte. Good work for a Monday morning.
Well anyone who believes companies really care about them, their employees or anything other than profit is very gullible or very naive.
I don’t know what really happened in this case or what Woolworths really said in rejecting Frankie’s. It’s quite possible they called in Frankie’s to see if it was worthwhile to buy an existing product, and that the rejection reason they gave was to protect the fact they were choosing to go with something in-house.
Unfortunately this case shows one of the big weaknesses of the free market. Although hypothetically anyone can come in and compete, in reality it is near impossible to take on anyone already successful in a market. Not that there are necessarily any good alternatives, but those who worship the free market like members of a cult tend to gloss over reality.
Nice try Anne Coventry. You’re too clever by half. Maybe you should get your facts right before putting your foot in it. Might I ask how you and Mike are connected?
I don’t know if I should direct you to a tutorial on how to use Google properly or ask my very young kids to give a lesson in using at all.
On the 22nd of last month, the IOL stable carried Schmidt’s amazing claim. Until you get the Google thing right, check out paragraph 7 of this: iol.co.za/business/business-news/woolworths-denies-cloning-soft-drinks-1.1202865?ot=inmsa.ArticlePrintPageLayout.ot.
While you’re at, get a can of Dr Pepper and open it. Smell it and taste it. Tell me that isn’t cinnamon. Give a tin to someone with an allergy to cinnamon and watch the reaction, as happened to my brother. Cinnamon you’ll find is a ‘natural flavor (sic)’ as described in the ingredients you helpfully reproduced.
Of course, the company that produces Dr Pepper doesn’t comment on the exact ingredients! Neither does Coca-Cola. They quit India in the early eighties rather than share it with the government there
LET’S DRINK TO
THE POWER-HUNGRY CORPORATES
WITH A THIRST TO BE FIRST.
or
WOOLIES TAKES THE CAKE
or
WHEN THE GOING GETS TOUGH
DO THE TOUGH STILL GO SHOPPING?
But if the going’s already tough
And financial times are rough
For Woolies foodstuff
You won’t have enough
Fine for those with money to waste
But too pricy for some people’s taste
I was a loyal Woolies customer but this episode has definitely made me think twice about shopping there. Particularly with family members boycotting and urging me to join them.
WW have handled this poorly from a PR point of view which leads me to believe that their integrity is questionable. Instead of dealing with the issue head-on and admitting to the similarity of the products (how many customers have to tell you that they mistook your product for Frankies?) – they have continued to throw their hands up and plead innocence.
I think they hoped that customers would be distracted by the season and forget about it. Well, this is certainly not working for me. The bottles of copied drinks on their shelves made me uncomfortable on my last shop there – making me think it should remain ‘my last shop’ at WW. If consumers don’t support small business in SA who is going to?
@Iqshan. Instead of insulting me, why don’t you just refer me to whatever I missed in my google search? Show me another instance of Cinnamon Cola, or proof somewhere that there is cinnamon in Dr. Pepper – I’m fully prepared to admit that I didn’t go through all the millions of hits I received in my amateurish google search. Opening a can and smelling it isn’t good enough – there is a difference between cinnamon and cassia. And are you saying that anyone who uses an ingredient which might be contained in another product is copying it?
For the record, I have no connection whatsoever to Mike Schmidt – I merely have sympathy for a small business trying to make it against far more powerful companies who have no qualms about riding roughshod over their weaker competition.
I also don’t like to see anyone gratuitously insulted.
Surprise, surprise, a graphic designer is caught copying….. And then the legal advice was that it was cheaper to brazen it out than pay a licence.
All the Woolworths need do now is launch a few, well placed defamation cases to really make money out of sugar water.
I never shop at WW any more. Their questionable sms promotions were never revealed to staff members: on two occasions I was told to ring CT to learn details, on a third I was told if I didn’t spend the entire amount promised discount-earning in one shop (rather than one month), I would receive no discount and I was sent a Mothers’ Day promotion voucher for a free cup of coffee when I never shop at a branch with a coffee shop. The store was also unreasonably slow to develop healthy products to compensate families now better educated about diabetes 2 risk.
To crown the matter, many Glenwood (Durban) shoppers were horrified that WW had rung the Metro to insist that bead sellers outside their store be removed. They were, forcibly, and their stock confiscated. WW refused point blank to ask the Metro to hand the stock back when canvassed by shoppers. Needless to say, there is perfectly good unused space immediately opposite the WW store, where the beadsellers could have sold their wares out of anyone’s way, although the width of the pavement at the point where they had been for years, still allows pedestrians plenty of space.
@ Anne Coventry. You candidly accused me of not having my facts in order, making them up and attacking another person’s integrity without justification. You insinuated that I’m a liar and a character assassin.
If you don’t like being insulted back, I suggest you stay away from message boards or learn to take it as well as you’re prepared to give it.
Mike made an outrageous statement. That was the point of my original post. I’m not saying that using the same ingredient is copying it. I’m saying that playing for public sympathy while clouding the facts with bizarre statements is not usually indicative of someone who’s been wronged.
As to cinnamon in Dr Pepper… We’ve established they won’t share their recipe. Cassia is a Chinese subsitute for cinnamon not native to the US and unlikely to have been available there in 1885… It’s also more expensive. There are recipes where Dr Pepper where the drink can be substituted for cinnamon. My best advice is to watch someone allergic to cinnamon lift a tin of Dr Pepper to their mouth. Not pleasant but the best indicator I’ve seen
Face it Woolies made themselves the fool here. They ripped off a brand and thought the small company will not have the balls to take them on.
This happens to a load of other small manufacturers and suppliers the public just do not know about it as the suppliers are too small to take on these MBA middle manager graduates that uses other people money to do business. And somewhere in their MBA course somebody told them that they have to be ruthless and unethical otherwise they are not good business people.
Woolies need to apologise but as usual they will not as they are too big and important.
Frankie’s is a blatant rip-off of Ben Shaws, a range of retro soft drinks produced in the UK – pot calling the kettle black it seems!
By the way, look at the style of the Woollies soft drink labels: colours used, stripes, font etc. You will find that they are virtually identical to the styling of the packaging of their range of retro (handmade) range of sweets (fudge, turkish delight, nougat, brittle etc.) that they have been selling for several years. The bottles used are similar to those used for their range of ‘life style’ drinks, which they have also been selling for several years. The only similarity to Frankie’s appears to be the names of some (not all) of their soft drink flavours, which are not exclusive to Frankies but in the public domain. Woollies have also used been using the 1950′s style pin-up girls pictures on some of their chocolates, cold drinks and some alcoholic beverages for a couple of years.
Woollies launched their retro soft drinks about 4 months after their meeting with Mike Schmidt – far too short a time design and produce a range of new products. They must have started production at least a year before the meeting, and the styling follows on from their styling of many of their other products.
I will give Woollies the benefit of the doubt.
@ Iqshan, I also researched cinnamon cola. Apparently cinnamon is a common ingredient in most colas. All Frankie’s did was enhance the flavour.
The matter at hand is not whether WW has the right to make retro cold drinks, it is about integrity and practicing what they preach and advertise. How do we know that the eggs they are selling are really free range or the meat really hormone free?
I don’t trust them anymore. I won’t put a cent into their pockets.
Maybe in South Africa it takes four months to design and produce a range of sugar water products. In the rest of the world it takes four days….
When this issue first erupted in the press sometime in December, I heard John Maytham say on Cape Talk 567 radio that he had spoken to a representative from Woollies (off the record) and had seen proof that Woollies had started work on the design of their ‘retro’ soft drinks range at least a year before the meeting with Schmidt, and he (Maytham) was subsequently inclined to believe that Woollies were not guilty as charged. Recently Woollies also launched a range of ‘traditional’ ice-cream flavours in containers with similar pastel striped packaging.
The way that Woolworths handled this issue on the social networks was appalling – there was a time where Woolworths was held up as a major brand that could get away with word of mouth marketing only, it did so on the basis of impeccable quality and integrity and that was their reputation, their brand.
The defence that I got on my twitter stream last year that why should I be surprised this is just business is a measure of how far Woolworths as a brand has already fallen. In a conference two years back a speaker remarked that advertising is the price you pay for bad marketing and from an advertising budget of zero to what is spent now is an indication of what they need to do as they none the less become more and more undifferentiated.
Woolworths is being pulled closer and closer to the pack, the undifferentiated space with the rest of the retailers. Hoping that it will all go away is naive – the volume of buzz will go away but not the effect on the brand.
Sure our publisher friends just loved printing more papers off this story whilst Frankie’s sells more ginger beer than ever before from the “free” ride on Woolies’ account.
Thank goodness for Woolies though when we don’t feel like planting and caring for our own veggie patches anymore….
There are no saints in this tale.
Say what you like. I am boycotting Woollies for good. Sticking up for the little guy.
There was an interview on Moneyweb on SAFM on this topic. Apparently Cinnamon Cola has never been marketed before Frankies, and they had applied for a patent. Apparently also the present supplier’s representative in an open meeting said they were going to copy Frankie’s brand for Woolworths. Woolworths is not manufacturing themselves – one of their regular suppliers is doing so.
The Advertising Standards Authority (ASA) has found Woolworths guilty of contravening advertising standards by imitating aspects of Frankie’s Olde Soft Drink Company. ASA has ordered Woolworths to withdraw its packaging immediately.
Woolworths said it had decided to withdraw a soft drink range from its shelves. ‘Whilst we maintain that we have not copied the Frankie’s range, it is clear that public sentiment is against us,’ Woolworth’s CEO Ian Moir said.
A fizz-pop victory for public opinion!