Reviving brands that aren’t quite forgotten
Twenty-five years ago, a new kind of sparkling water called Clearly Canadian hit store shelves.
In flavors such as Orchard Peach and Western Loganberry, the drink soon was raking in $150 million a year in sales. But when faced by growing competition, Clearly Canadian began to fade. By the early 2000s it had all but disappeared.
Enter Mark Thomann.
Early last year, the Chicago investor bought the Clearly Canadian name, hired a marketing team, contracted a bottler and hammered out a distribution deal to get the drinks back into U.S. supermarkets starting in March.
Thomann is making a bet that enough people remember Clearly Canadian to try it again. He’s one of a growing group of entrepreneurs who specialize in digging through the graveyard of consumerism in search of zombie brands that can be revived.
“We believe we can make Clearly Canadian valuable again,” said Thomann, chief executive of River West Brands, whose stable of resuscitated brands includes Coleco games and Underalls pantyhose.
Rebooting old names makes sense in a market crammed with products vying for consumers’ attention; building a new brand can cost millions in advertising and there’s no guarantee of success. But for as little as a $275 fee to the U.S. Patent & Trademark Office, one can buy a brand that, albeit dusty, is already familiar to millions of potential customers.
“It’s very difficult to get a new brand established in today’s marketplace,” said Tim Calkins, a professor of marketing at Northwestern University’s Kellogg School of Management. “So if you start with some brand awareness, it can be an advantage.”
These trademark trolls scour brand registration databases, clip old magazine ads and interview consumers about beloved brands of their youth. Such efforts have brought back Polaroid, Eagle Snacks and the Sharper Image in recent years.
Attorney Kenny Wiesen revived Bonomo’s Turkish Taffy because he missed his favorite childhood candy. He discovered that the trademark was held by Tootsie Roll, which quit making the thin, chewy bars in the 1980s. It took several years, a lawsuit and about $100,000, but eventually Wiesen snagged the Bonomo’s Turkish Taffy brand.
That was the easy part. Wiesen and a partner then spent several years tracking down the recipe, relying in part on the memories of an 89-year-old candy chemist. Then they had to find a factory to produce it.
The candy finally hit the market in 2010. Today Wiesen produces about 8 million bars a year distributed to 10,000 stores nationwide.
“It’s profitable,” said Wiesen, of Carle Place, N.Y., who has acquired other brands he wants to bring back, including Regal Crown Sours hard candies. “But it’s not explosively profitable.”
Experts say old candy and soft drinks hold particular appeal for defunct brand specialists; consumers are nostalgic for foods they ate as kids. But that can also be a pitfall.
“You have to make the product relevant today,” said Ellia Kassoff, chief executive of candy maker Leaf Brands in Newport Beach. “I don’t want to sell to the dead.”
Kassoff, an executive recruiter, has made a full-time business of buying and updating defunct brands, including Leaf, which he purchased in 2011 with the idea of reviving a full lineup of classic candies.
Last summer, the company reintroduced Astro Pop, a cone-shaped lollipop invented in the 1960s by a pair of California rocket scientists that went out of production in 2004. To appeal to today’s kids, Leaf now makes the suckers in two sizes, as well as Astro Pop soda in a variety of flavors. It’s also selling David’s Signature Beyond Gourmet Jelly Beans, another brand Kassoff rescued.
Although Kassoff has purchased some old brands, others he has acquired for almost nothing thanks to a process known as abandonment. Under federal law, a trademark is considered abandoned if it hasn’t been used for three years. After that, anyone can argue that they should be able to use it exclusively and receive legal trademark protection benefits that once belonged to the previous owner.
Kassoff used that strategy two years ago when he applied for trademarks to a suite of extinct department stores, including Abraham & Strauss, Filene’s, the Bon Marche, Joseph Magnin and Robinson’s. His plan was to license the brands to existing retailers, perhaps for in-house accessory lines.
But when Kassoff won government approval to take over the brands, Macy’s Inc., the previous owner, filed a federal lawsuit in late 2011 to stop him. The department store said that it had never abandoned those chains, which it had purchased over the years, even though it had rebranded them all as Macy’s. Kassoff counter-sued, saying Macy’s was infringing his trademarks.
The suit is scheduled for trial this spring. Macy’s did not respond to several requests for comment. But experts said large firms increasingly are taking care to keep their cast-off brands out of competitors’ hands.
“Even if they’re not going to use the brands, a company like that doesn’t want anyone else using them either,” said Mark McKenna, who teaches intellectual property law at Notre Dame. “And even though the law seems fairly clear on this point, it’s hard to defeat a huge company.”
Thomann of River West Brands said he’s found it more profitable to avoid legal disputes and negotiate with brand holders, abandoned or not, and said he’s prepared to pay as much as several million dollars for the right brand.
In 2004, his firm acquired directly from Bristol-Myers Squibb the rights to pain reliever Nuprin, which was no longer being made. River West then banked a tidy sum by reselling the name to drug chain CVS for use as a private-label brand.
Likewise, Thomann said, in 2006 his firm paid Unilever for rights to Salon Selectives hair care products. After relaunch, he sold the brand, which can now be found at Walgreens as a low-cost line.
Zombie reboots often focus on the value segment, according to Gary Talarico, chief executive of Gordon Bros., a Boston firm that manages distressed companies and brands. That’s because the strategy hinges on milking name-recognition on the cheap, making it easy to beat generic, no-name products.
Gordon Bros. used that tactic with Polaroid , which it acquired with another firm after the instant film pioneer went bankrupt in 2008. Today Polaroid’s name is emblazoned on a wide array of economy-priced consumer products, including televisions, MP3 players and tablet computers.
“It doesn’t matter that it’s not photographic equipment,” said Talarico, who has used a similar approach with Bombay Co. and Sharper Image. “It’s a brand name that people remember and trust.”
But even successful brand reintroductions can fizzle, said Kevin Keller, a branding expert at Dartmouth’s Tuck School of Business. “Nostalgia is going to run its course,” he said.
Take Nuprin: After expanding the brand to include a wide range of remedies, CVS eventually pulled it from its shelves. It sold the name in March for $180,000.
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