Employing a brand extension strategy can be a powerful way to leverage an existing brand and its consumer reputation to promote a new product, flavor, or product variation. However, it can also mislead consumers and result in consumer confusion. Confusion is particularly possible when a brand uses an established trademark for one type of product to release a new, different product into the market, leading to potential trademark disputes and litigation. The expectations associated with the established brand may be left unmet by the new product, or the company may fail to adequately distinguish the new product from existing products.
The maker of Fireball Cinnamon Whisky, Sazerac, is under fire for its allegedly misleading labeling of its new "cinnamon malt beverage" product. The suit alleges fraud by Sazerac, claiming that its new mini bottles of "Fireball"-branded products sold in convenience stores and supermarkets contain no whisky, although the labels for this new product are virtually identical to the labels for their existing Fireball Cinnamon Whisky product.
One of the differences is that the bottles containing whisky are identified as "Fireball Cinnamon Whisky," while the new malt version is simply identified as "Fireball Cinnamon," as shown in the labels below:
The lawsuit alleges that most purchasers would not notice the difference in the product indication, and that this "bait and switch" was intentional. Further, the case alleges Fireball Cinnamon's statement of composition, written in the smallest permitted size, describing its contents as a "malt beverage with natural whisky and other flavors and caramel color" is a "clever turn of phrase" and is intended to mislead consumers into thinking that it refers to the presence of natural whisky in the product rather than the product being flavored to taste like Cinnamon Whisky. This confusion arises from the possibility that some consumers may not recognize that "natural whisky [flavor]" is not synonymous with the spirit itself.
The strong "Fireball" trademark itself is part of the problem for Sazerac. "Fireball" was successfully established by Sazerac as a well-known brand for its original cinnamon whisky product. This raises the question whether the company is now leveraging its existing well-known brand to mislead consumers.
While brand extensions are often a great way to leverage an existing brand to introduce new products to your customers, if the result is misleading it could severely damage a company's reputation and be counterproductive. The Fireball case highlights the importance of carefully considering whether an existing brand is a good fit for a new product. One consideration is ensuring that consumer expectations associated with the established brand are met and that the use of the established brand with a new product is not misleading or deceptive.
*Simran Kaur is a law clerk in the Portland, Oregon, office of Davis Wright Tremaine.