Chobani’s Bad Month

As The Washington Post reported last week, the British Court of Appeal affirmed a ruling that Chobani, a United States-based company and leader among the ever-popular Greek yogurt movement, cannot label its products “Greek” because the products are actually made in America.  The lawsuit was brought by rival Greek yogurt maker Fage, which is, in fact, a Greek company.  For edification, Greek yogurt is identified by its thick and creamy texture, which results from the straining of the whey.  The British court affirmed a previous ruling that Chobani’s “Greek yogurt” label misled British consumers and any products labeled “Greek yogurt” must be made in Greece.  As a result, the court enjoined Chobani from using the “Greek yogurt” label in Britain.  One could argue this is a harsh result, especially from the country that produced William Shakespeare, who famously observed that “[a] rose by any other name would smell as sweet.”

A similar battle was fought in the United States over the “Napa Valley” designation on wine labels in the early 2000’s.  Bronco Wine Co. purchased the Napa Creek, Rutherford Vintners, and Napa Ridge labels in the 1990s and 2000.    Federal law mandates that if a wine bears the name of a geographical place, at least 75 percent of the grapes in the wine must have been grown within the geographical region.  Due to a loophole in the federal law which grandfathers and exempts pre-1986 labels from the requirement, Bronco sold these Napa-labeled wines using grapes grown elsewhere.  Some referred to Bronco’s business plan as a scourge of Napa Valley.  The problem?  Napa vinters are a strong and powerful association in California, who seek to protect the prestige and identity of Napa-produced wine.  The group successfully lobbied the California legislature to pass a law requiring wine labels that bore the name Napa or any other federally recognized viticultural area within Napa County to contain 75 percent local grapes.   After six years of legal battles, and I’m sure quite a few bottles of Cab Sav, Bronco gave up its fight to stop California from enforcing the law.  Bronco may have lost this labeling battle but is undoubtedly winning the supply and demand war, as it is the owner of the ever-popular (and economic) Two Buck Chuck.

Do brands like Hawaiian Punch, London Fog, Patagonia and Arizona Beverage Company face the same fate, or are the Bronco and Chobani results merely aberrations?  We’ll see.

In addition to Chobani’s Shakespearean troubles, Russia has blocked 5,000 Chobani yogurts from reaching American athletes participating in the 2014 Winter Olympics in Sochi.  Russian officials are saying improper paperwork is to blame, but one can only wonder given the recent tension between Russia and the United States.   Though seemingly minor compared to the countries’ recent disagreements, Yogurt-Gate has escalated into an intense political matter – the Obama administration has even intervened.  Nevertheless, at the time of the post, the Russian stance remains “Nyet.”

In the span of one month, Chobani has been stripped of its “Greek” reference in the United Kingdom and all but banned from the Olympics, the biggest sporting history in the world.   Do you want to know the true irony of Chobani’s recent woes?  It just so happens that the birthplace of the Olympics is . . . Greece.

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