INTA Brand Authenticity Conference (Report 1): Building brand value via ethical and sustainable credentials

For those of us freezing away in London today, there were those a couple of degrees colder in Berlin at INTA's Brand Authenticity Conference.   No idea what that conference is? Don't worry, the AmeriKat's friend Alex Woolgar (Allen & Overy) reports on what it is all about and this morning's sessions for the Kat's readers.  Over to Alex: 

"The Brand Authenticity conference breaks new ground for INTA - it is the first INTA conference dealing with what is an increasingly important topic for brands and consumers alike. Consumers are taking more of an interest in the ethical and sustainable credentials of brands and, in turn, companies are waking up to the risks and rewards in this area. Brand professionals can add value by understanding this developing environment, the legal tools available to brands to earn and retain consumer trust and loyalty, and how best to deploy these tools.

Santiago Peralta, co-founder of Pacari Chocolate, kicked off proceedings with a passionate keynote address. Based in Quito, Ecuador, Pacari is a pioneering independent "tree to bar" chocolate manufacturer. Santiago explained how this model ensures quality and fairness at every stage of the process. Pacari is the most-awarded chocolate ever at the World Chocolate Awards (the "Olympics of chocolate") and, based on the gratefully-received samples, the author can see why. Santiago spoke about how the values of sustainability (over all timescales) and responsibility for the welfare of suppliers and employees are central to the company's identity. Pacari has received various certifications, such as the biodynamic Demeter and USDA Organic marks, and as a B Corp. Clearly, these certifications are hugely valued by Pacari - they serve the dual purpose of confirming that the company is living up to its ethical principles, and also serve as a badge of assurance to Pacari's target customers. Next was a series of presentations covering the evolution of corporate social responsibility (CSR).

Frederick Mostert of the Oxford Intellectual Property Research Centre and King's College London (and formerly of Richemont and a past INTA President) traced the origins of the concept of "sustainability" from 1962's Silent Spring by Rachel Carson to the present day. Speaking in his capacity as a Trustee of the Royal Academy of Culinary Arts, Frederick detailed the Academy's new "six pillars" of its food philosophy: sustainable; local; bio-friendly; animal-friendly; waste management; and communality. 90% of the chefs surveyed requested this initiative and, interestingly, the younger generations of chef are the most passionate about these issues (suggesting the trend towards sustainability will continue in future). Frederick has assisted the Academy in developing a mark to certify compliance with these pillars. Finally, Frederick reminded attendees that certifications can sometimes be misleading to consumers e.g. despite common assumptions, "organic" food products can include non-sustainable and unhealthy ingredients such as palm oil and corn syrup.

Katja Aßmann of Demeter-International explained the background and purpose of the Demeter mark, particularly familiar to German consumers for the certification of biodynamic products (i.e. more stringent than organic standards, and potentially valuable in reducing greenhouse gas (GHG) emissions). She noted that there is latent and increasing demand for "better" food and beverages: 80% of Germans do not want to consume GM products, and 41% would like to buy organic wherever possible.

Patricia Magaña-Spiegel of Fairtrade International spoke about the history of Fairtrade, its development of globally uniform standards of trade, and consumer recognition of the single worldwide Faitrade mark. In 2016, Fairtrade producers received an aggregate price premium of €150 million. However, Fairtrade's mission is now broader than fair prices, and the brand's strength is being leveraged in other areas e.g. elimination of forced and child labour.

Finally, Peter van Den Bulk (AB InBev) and Joseph J. Ferretti (PepsiCo, and current INTA President) spoke about the CSR programmes of their respective companies. Joe noted that, as large companies with a significant footprint, they feel even more responsible to reduce the negative side-effects of doing business. Peter detailed AB InBev's efforts to encourage more local supply (e.g. by brewing beer from Cassava root in Mozambique) and to reduce water consumption (from 2012 to 2016, consumption per litre produced has reduced from 3.54 to 3.14 litres, saving the equivalent of 40,000 Olympic swimming pools' worth of water per year, despite business growth)

Joe explained PepsiCo's goal to increase the sustainability and healthiness of its portfolio. The use of water was again a big issue, set against the backdrop of an expected 70% increase in global demand for food by 2050, and decreasing fresh water supplies. Joe suggested that, ultimately, achieving greater sustainability is also good for business: it allows continued supply of essential raw materials; if suppliers are paid fairly they are less likely to go bust and cause disruption; and reducing waste (only 6% of PepsiCo's production waste is sent to landfill) greatly helps the bottom line. Interestingly, PepsiCo retains a target of a 20% reduction in GHG emissions by 2030, notwithstanding the planned US withdrawal from the Paris climate accord.

The final session of the morning (moderated by Mette Andersen of Lego) was a two-part review of the standards brands must live up to in order to be deemed "responsible", and the trade mark issues in communicating this. Giulia Di Tommaso (Elipe), who works extensively with Unilever, took the first topic. Giulia gave an overview of the increasing standardised KPIs and rankings in this area, such as the OXFAM food brands ranking matrix, and the UN's sustainable development goals. Giulia noted that the latter features 169 KPIs i.e. the goals present considerable business complexity. However, Giulia argued that they also present an opportunity: there may be a significant first-mover advantage for businesses that take the lead on this. Consumers alone are unlikely explicitly to demand every possible improvement, but companies may benefit from (i) improved brand perception; and (ii) opening up new markets, along "build it and they will come" lines.

Laetitia Lagarde of Baker & McKenzie gave an overview of some trade mark issues arising for "green" businesses, products and services. In general, the bar for registration of marks featuring terms such as "eco" and "bio" is quite high given the inherently descriptive and/or laudatory character of the terms. Mette noted that the position is slightly different in Denmark - an inherently descriptive/non-distinctive mark will be registered with figurative elements - but in practice this will reduce likelihood of confusion in an infringement context (e.g. BIO BABY and BIO BABBY for nappies were held to not be confusingly similar). There are various other restrictions on use of "green" terms e.g. Regulation 834/2007 on the labelling of organic food products with the EU "leaf" logo, which treats the terms "bio", "eco" and "organic" as interchangeable (even though they may not be perceived as such by consumers). There also is a lesser-known mark available for non-edible environmentally-friendly goods and services, the EU Ecolabel (which has been around since 1994). The Cosmetics Regulation does not specify conditions for the use of "green" terms, so in this respect the cosmetics market is regulated by EU and national laws preventing misleading advertising. However, there are some private certification marks available e.g. the Soil Association mark in the UK, Ecocert in France and BDIH in Germany."