Bar fight: Kind sues ClifFebruary 14, 2014: 7:49 AM ET
Upstart snack maker charges trademark infringement over Clif Mojo's transparent wrapper.
By Caroline Fairchild, reporter
FORTUNE -- Kind Healthy Snacks, the maker of the fastest-growing energy and nutrition bar in the country, is doing a seemingly unkind thing to remain competitive.
The upstart snack maker is suing Clif Bar in the southern district court of New York for alleged trademark infringements. Kind seeks to prohibit Clif from releasing its Clif Mojo snack bar with a transparent wrapper -- a distinctive packaging that company founder Daniel Lubetzky said is integral to his product's success.
"Everything you see in our product is about transparency," Lubetzky said earlier this month in an interview with Fortune. "We were the first ones to [have a transparent wrapper] in our industry, and now we have a lot of people trying to copy our approach."
Kind bars comprised about 5% of the $2 billion energy and nutrition bar market in 2012, according to an estimate from market intelligence firm Euromonitor International. While Clif's main snack bar -- the Clif bar -- accounted for over 18% of the market that year, Clif Mojo garnered just 1.4%. With 27 million more Americans eating snack bars today than in 2003, the energy and nutrition bar market is predicted to grow even larger, according to Harry Balzer, an industry analyst at consumer market research company NPD Group.
Kind's motion for preliminary injunction states that Clif's Mojo line of snack bars has been losing market share to Kind for years. Clif's move to alter its packaging from its previously opaque wrapper to a transparent one that closely resembles Kind's is an attempt to "usurp Kind's hard-earned goodwill and confuse the consuming public," according to court papers.
A spokesperson for Clif Bar declined to comment on the pending legal matter.
Aside from its clear wrapper, Kind distinguishes itself from its competitors with a charitable mission that it infuses into its marketing campaigns. The "not-only-for-profit" company donates thousands annually to altruistic projects conceived by its customers. Kind also rewards random acts of kindness with cards that customers can use to get free snack bars.
In a Fortune interview before filing the Clif lawsuit, Lubetzky was adamant that his fast-growing company could continue to be both competitive as well as kind in the cutthroat snack bar industry. The founder stressed that his company was built around what he calls the "and philosophy." By questioning false assumptions about building a company around one principle or another, Lubetzky said he was able to make snack bars that are both healthy and tasty, and a company that is both socially conscious and profitable.
That principle extends to Lubetzky's desire to defend his place in the market.
"Being Kind doesn't mean being stupid. It does not mean being taken advantage of," Lubetzky said. "I don't see life as an either-or approach."