Is it time for Aldi to rebrand its lookalike strategy?

Aldi – a masterclass in lookalikes

Within the sphere of FMCG, it feels like the main topic of conversation in recent years, at least in the legal world, has been around the use of copycat and lookalike packaging. At the core of many of the most interesting legal disputes in this area has been Aldi. Until recently, Aldi has been a master of designing packaging which is close enough to well-known consumer brands that everyone knows who they are trying to mimic, but far enough away that it is often difficult to successfully enforce IP rights against it. Alongside these high-profile disputes, Aldi also gives marketing teams around the world a masterclass in PR, regardless of the legal merits of the case it is fair to say that Aldi usually wins in the court of public opinion with its witty and playful social media campaigns which often poke fun of serious legal dispute going on in the background.

Recently, the UK Court of Appeal issued its decision in Thatchers v Aldi, reported on by us here, which found Aldi to have infringed Thatcher’s trade mark registrations for the packaging of its lemon cider product. And it isn’t only the UK courts which are starting to find Aldi’s traditional tactics to be unacceptable, just a month earlier the Australian Courts found Aldi had infringed the copyright in the packaging of a rival children’s snack food brand Baby Bellies[1].

A linking factor between the Australian and UK cases which have recently been decided (and indeed between many of these disputes which involve Aldi), is that the evidence filed during the proceedings often demonstrates a clear intention by Aldi to use the third-party brand as starting point, or benchmark, for its designs. In the Australian case, emails were submitted in evidence from Aldi and its design team which said “Please follow the architecture of Baby Bellies and use photographic imagery” and showed Aldi discussing how to move the design further away from the Baby Bellies benchmark to avoid it being infringing. In the Thatchers case, Aldi admitted to using the Thatchers packaging for “benchmarking” when designing its own packaging.

Aldi’s approach of sailing close to the wind has worked well for it up until recently, but the tide is starting to turn with Courts issuing decisions that Aldi’s packaging is infringing third party rights. Regardless of how the legal position changes over time, there is another aspect to this strategy which deserves some consideration: do consumers even find lookalike packaging desirable?

Consumer behaviour – the research

Aldi has long adopted a strategy of producing copycat packaging which uses its own distinctive brand name alongside packaging which is highly similar in terms of design, colour, theme and get-up to a leading competitor brand.

Historically, research had shown that the more similar copycat packaging is to the leading brand in a product category, the more positively the copycat is evaluated by consumers.[2] However, more recent research[3] suggests that consumer behaviour and consumer perception of copycat brands might be changing, and that more subtle copycats are actually more favoured by modern consumers. The study involved showing participants three fictitious spreadable butter brands. These are shown below with the low similarity brand on the left and the high similarity brand on the right. Some of the participants were also shown the market leading brand, Bertolli, shown on the top of this image:

The results of this study showed that when the consumer was aware of the leading brand, more moderately similar packaging was considered more positively by the consumer than highly similar packaging. The highly similar packaging was actually the least popular choice for consumers who were shown the lookalikes alongside the market leader.

Where consumers were shown the lookalike brands without seeing leading brand, the preference was in favour of highly similar copycat packaging, suggesting some kind of subliminal link in the mind of the consumer. The study ultimately concluded:

“Together, the findings provide evidence that high-similarity copycats may be ripping off the leader brands less and that moderate-similarity copycats may be more ominous than commonly believed. This research provides evidence that subtler, moderate similarity copycats can be more threatening than blatant, high-similarity ones.”

Is it time for Aldi to rebrand its strategy?

One thing worth noting is that the presence or absence of the leading brand can make a difference to consumer behaviour, the study showed that the group who were not shown the Bertolli brand alongside the lookalikes favoured the highest similarity packaging, whereas the group shown the Bertolli brand alongside the lookalikes favoured the more moderately similar packaging.

Historically, this would likely lead to the conclusion that Aldi’s approach is the right one. Aldi doesn’t traditionally stock the competitor brands in stores next to its own brand products, so there is often a lack of opportunity for the consumer to recall and compare the leading brand.

However, Aldi’s high profile IP disputes in recent years, many of which have been reported in mainstream news outside of legal circles, mean it has acquired a significant reputation for copycat goods in the mind of the public. Consumers are accustomed to seeing Aldi packaging which mimics that of leading brands, and I suspect that many consumers can instantly bring the leading brand to mind when they see the Aldi lookalike. The question is, has the particular reputation which Aldi has acquired for itself over the years actually changed the state of the consumers’ mind, such that shoppers in Aldi are now actually making a mental comparison with the leading consumer brand even without the need for it to be present on the shelf? If so, the research suggests that consumer preference would be for a more moderately similar type of packaging rather than a highly similar lookalike.

Aldi’s unique strategy in the field of lookalike packaging appears to have worked well for it over the years. However, has it been a victim of its own success? Has the strategy of promoting the IP disputes it becomes involved in made the public so highly aware of IP issues, that it has become a double-edged sword in terms of the impact it might have had on consumer perception of its lookalike products? If the tide is turning, both in the Courts and in the opinion of consumers, maybe it is time for Aldi to rebrand its strategy and consider moving away from highly similar lookalikes.

[1] https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca1452

[2] Loken, Barbara, Ivan Ross, and Ronald L. Hinkle (1986), “Consumer ‘Confusion’ of Origin and Brand Similarity Perceptions,” Journal of Public Policy & Marketing, 5, 195–211 and Warlop, Luk and Joseph W. Alba (2004), “Sincere Flattery: Trade-Dress Imitation and Consumer Choice,” Journal of Consumer Psychology, 14 (1), 21–27.

[3] Van Horen and Pieters, 2012 When high similarity copycats lose and moderate similarity copycats gain: The impact of comparative evaluation. JMR. Journal of Marketing Research, 49(1), 83-91