Skyr – Trademark or Noun? A Real Game of Monopoly
Yoghurt in Western Europe is characterised by high per capita volume consumption per person but negative volume growth. The key to value growth and profitability is therefore to add value and allow for consumers spending more on yoghurt instead of eating more. Marketing origin yoghurts, such as Greek yoghurt or Icelandic skyr*, is one way to achieve this.
Skyr is “an Icelandic dish consisting of curdled milk” (Oxford Dictionaries). Like some other nouns, such as apple or jaguar, it is also a trademark. Generally, trademark registration is possible if the trademark differentiates the product from competitors and does not simply describe the properties of the product. For example, the noun apple can be a trademark for carpets (and it is) but not for a fruit, since a fruit called apple indeed must be an apple. Therefore, if apple would be a trademark for jams or fresh fruits, a cancellation request could be filed based on so-called “absolute grounds”, because some products in these categories have apples as their main ingredient.
This is the essence of the conflict surrounding the trademark skyr in Finland, Sweden and Norway. If “skyr” is found to be a unique noun, then anyone can market skyr in that country. If it is found to be a brand, everyone but the brand owner has to market their product with a long product description that does not include the four “you-know-what-we-really-mean” letters.
Skyr the cause for a new series of court battles
With skyr sales strong in 2014 (Finland: €7 million, Norway: €39 million, Sweden: €4 million, Denmark: €57 million), competitors have taken notice. Lactalis argued absolute grounds in late 2014 to revoke the trademark skyr in Sweden, Valio challenged the attempt of Mjólkursamsalan to trademark the word skyr in Finland in early 2015, and Arla launched a skyr product in Finland a few months after that. Mjólkursamsalan notified the Finnish court which forced Arla to withdraw its skyr from the shelves, stating that until Valio’s opposition to the trademark skyr has been confirmed or denied, the trademark still stands.
Following legal action from Lactalis, Mjólkursamsalan** lost its Swedish trademark based on absolute grounds in January 2015. Lidl Sverige AB in October 2015 unexpectedly became its first competitor by selling a German made plain skyr at €3.8 per kg, far below the €11 per kg charged for Mjólkursamsalan’s** convenience pack. If the trademarks are revoked, the effect for consumers will be significant in terms of wider assortment and lower prices. It will also be significant for Mjólkursamsalan which loses a very profitable monopoly. The monopoly is so profitable that legal expenses to protect it are regarded as investments.
Skyr at risk of becoming mainstream like Greek yoghurt
Before skyr, Greek yoghurt was the yoghurt category’s champion. In the UK, Greek Fage successfully ousted US competitor Chobani by arguing in court that only yoghurt from Greece could be Greek yoghurt. Skyr is the new Greek yoghurt. The product’s role as category driver, not the specifics of the court case, is the common factor.
Norway, the real home of Iron Age dairy product skyr and the second largest market after Iceland and Denmark, is likely to be the next country to test the trademark skyr. Based on absolute grounds, skyr is unlikely to remain trademarked in the Nordic countries and Mjólkursamsalan** would be naïve to presume that its monopoly will remain. Instead it needs to prepare for more competition or to argue the origin claim, but establishing among consumers that good skyr needs to be Icelandic will be a hard sell after years of production in Denmark. However, Mjólkursamsalan is likely to have learned from its mistakes in the Nordic countries and is likely to position its own brand of skyr as uniquely Icelandic in the new markets of the UK and Switzerland.
*Skyr is technically a cheese and is tracked as fromage frais in Euromonitor International’s data, though it is often seen as a competitor to yoghurt.
**Mjólkursamsalan ultimately receives dividends from sales in Norway and Sweden although local O. Kavli AS Norway and O. Kavli AB for Sweden own the trademark skyr. Their brands Q and Kavli are on the products and they are formal parties in local legal conflicts around the brands.