Sherwood
Wednesday Apr.10, 2024

🌶️ “Trademark bullies”

Condiment controversy (Mariah Tauger/Getty Images)
Condiment controversy (Mariah Tauger/Getty Images)

Hey Snackers,

Partial eclipse of the Billboard chart? Spotify said searches for the 1983 song “Total Eclipse of the Heart” rocketed up nearly 50% before Monday’s celestial event.

Stocks barely budged yesterday ahead of today’s consumer-prices report. Economists expect that inflation picked up in March, which could make a June rate cut less likely.

Heated

Momofuku gets called a “trademark bully” in a spicy fight over “chili crunch” naming rights

No chile… Celeb chef David Chang’s Momofuku is known for its trendy eateries, packaged foods, and its role in starting Milk Bar. Now it’s also known for stirring the pot. Momofuku filed a trademark application for “chili crunch” last month, and spicy drama has ensued. Momofuku sent cease-and-desists to businesses that called their product “chili crunch” or “chile crunch” (it acquired the “chile crunch” trademark last year). Biz owners defended their right to use the term, which is commonly used to describe a centuries-old condiment.

  • Hot takes: Jing Gao, founder of chili crisp brand Fly by Jing, called out “trademark bullies” in a post about the controversy, while actor and food brand owner Simu Liu challenged Momofuku to a blind taste test of their rival products. Another chili crunch maker accused Chang of wanting to create a monopoly instead of a community.

  • Cholula and co: Hot sauce is a $3B industry in the US that’s expected to nearly double in a decade.

What’s in a name… Trademarks are meant to protect unique product names, symbols, and designs (think: “Coke,” Nike’s swoosh). Momofuku argues that its “chili crunch” product has earned the distinction because of its popularity and positive reviews. But critics say it’s like trademarking “ketchup” or “salsa.” It’s not the only murkily generic trademark:

  • Nacho name: Taco John’s relinquished its “Taco Tuesday” trademark to the public after a heated legal battle with Taco Bell last year.

  • Incompatible: Tinder owner Match Group owns trademarks for terms including “swipe.” Muslim dating app Muzmatch had to rebrand to Muzz after losing a trademark suit against Match.

Possessiveness can backfire… Fights over exclusive naming rights may not be worth the barrage of bad PR they can bring. For Momofuku, it’s an especially bad look because its trademark effort could hurt small Asian American- and Pacific Islander-owned businesses. Momofuku’s goal with the “chile/i crunch” play was to benefit its brand, but it may’ve done the opposite.

POWER-UP

Mega meat-packers will spend billions on robot workers as challenges with human labor persist

Rosey the Robot ribber… clockin’ in. The US meat industry does more than $200B/year in sales on the back of booming consumer demand that hit a record high in 2021. But meat-packers are struggling to fill factory roles after losing workers during the pandemic. Now companies including Tyson Foods, Smithfield, and Cargill plan to spend a combined $1B+ on automation to boost efficiency. Picture: robot cattle drivers, automated bone saws, and mechanical rib pullers. The robo-investment could lower labor costs as losses stack up:

  • Paltry poultry profits: Tyson lost $648M in its last fiscal year as operating costs rose and protein prices fell. JBS, the world’s largest meat-packer, lost nearly $200M.

After-school dangers… As meat-packers push for futuristic factory floors, the industry risks getting stuck in the past with dangerous working conditions. Last year, a federal probe found children working in 13 slaughterhouses in eight states. And in February the Labor Department sought an injunction to stop the use of “oppressive child labor” by a meatpacking cleaning company that put children as young as 13 at risk. The Labor Dept. said kids were scrubbing blood off dangerous “kill floor” machines during overnight shifts. 

  • Danger zone: Kids are 2X more likely than adults to be seriously injured while working, and meat workers are at higher risk of getting injuries that require missing work.

Tech isn’t a fix-all… Meat giants say they hope their big tech investments will help save them $$ and keep workers in hard-to-fill jobs (turnover’s high). But tech alone isn’t likely to fix the industry’s child-labor problem or its postpandemic staffing struggles. A recent survey suggested that more workers would take meatpacking jobs if they paid more.

Chart

(Snacks x Chartr)

Sherwood Spotlight: there are fewer women the in C-suite

For the first time in nearly 20 years, the share of women holding executive positions at publicly traded US companies has dropped.

Women accounted for just 11.8% of execs last year, down from 12.2% the previous year.

Read more at Sherwood.

What else we’re Snackin’

  • Rails: Norfolk Southern agreed to pay a $600M settlement after one of its trains derailed in Ohio last year and caused a toxic spill. The payment could resolve lawsuits covering thousands of residents who were displaced.

  • Paste: Meta copied TikTok with Reels, and now TikTok’s returning the favor: TikTok users have been getting notified about a new photo-sharing app (TikTok Notes) that could rival Insta.

  • Tag: US small-business optimism hit an 11-year low last month as owners continue to grapple with inflation. Now shoppers are footing some of the bill: 43% of owners said they raised prices last month.

  • Race: South Korea plans to invest $7B in AI to maintain its status as a top producer of high-tech chips. Meantime, President Biden said the US would give $6.6B to Taiwan’s TSMC to help build chip factories in Arizona.

  • Misstep: Allbirds has six months to get its stock above $1 for 10 days straight or risk getting kicked off the Nasdaq. The sustainable-footwear biz has struggled since its 2021 IPO as sales slip and losses pile up.

Snack Fact of the Day

Costco’s estimated to be making up to $200M/month from sales of gold bars

Wednesday

  • March CPI released

  • Earnings expected from Delta and Rent the Runway

  • Japan PM visits US

Authors of this Snacks own shares of: Delta, Match Group, and Yum Brands

Correction: D’oh! In yesterday’s Snacks, we misstated Caitlin Clark’s school as Iowa State instead of University of Iowa. We regret the error.

Authors of this Snacks own shares of: Delta, Match Group, and Yum Brands

Correction: D’oh! In yesterday’s Snacks, we misstated Caitlin Clark’s school as Iowa State instead of University of Iowa. We regret the error.

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