Stone Brewing Co. of Escondido is suing Molson Coors’ MillerCoors in a California court, claiming the company’s marketing of Keystone beer — specifically referring to the product as ‘Stone — is confusing.
In a video announcing the lawsuit, Stone Brewing founder Greg Kochexplained why he’s suing the company (NYSE: TAP) and what MillerCoors could do to end the kerfuffle.
“We believe that MillerCoors is intentionally and deliberately trying to create confusion in the marketplace with their Keystone brand and that is why we’re suing,” Koch said in the video.
“Stop using ‘Stone as a standalone word” in marketing and Koch said he’d drop his suit.
MillerCoors spokesperson Marty Malone had this response to Stone’s suit: ““This lawsuit is a clever publicity stunt with a multi-camera, tightly-scripted video featuring Stone’s founder Greg Koch. Since Keystone’s debut in 1989, prior to the founding of Stone Brewing in 1996, our consumers have commonly used ‘Stone’ to refer to the Keystone brand and we will let the facts speak for themselves in the legal process.”
Stone Brewing Co’s suit against MillerCoors slammed as publicity stunt https://t.co/CY8SzYK94z pic.twitter.com/nHdOpv7Twc
— Saara Leon (@saara_leon) February 13, 2018
The beer giant’s revamping of Keystone Light last April was done to emphasize the word “Stone,” the lettering of which covers much of a side of a can, Stone says in its suit. “Keystone’s new can design overtly copies and infringes the Stone trademark.”
Packaging for 30-packs of Keystone cans have the word “Stone” displayed prominently, without “virtually any reference to ‘Keystone’ at all,” says the suit, and “the packaging is designed to create a ‘wall of Stone’ when displayed in stores.”
An escalating social media campaign on Facebook and Instagram — and ads on sites such as ESPN.com — refers to Keystone as Stone. “Such mass advertising broadcasts the infringing ‘Stone’ name beyond Keystone’s immediate social media audience to the general public at large,” the suit says.
Stone is the ninth-largest craft brewer in the U.S., according to the Brewers Association. It’s the 17th largest brewery overall when you add in all U.S. brewers including Anheuser-Busch, MillerCoors and Pabst.
In 2017, Stone produced 12 million gallons of beer and recorded total revenue of $242 million, the company says.
The U.S. Patent and Trademark Office turned down MillerCoors’ attempt to register “Stones” in 2007 and the company “instead abandoned its application, admitting that confusion with Stone beer was likely,” the suit says.
In regards to the traditional marketing by MillerCoors, displays at grocery stores and big box liquor stores has the most potential of marketplace confusion. Imagine mom heads out to the store to go grocery shopping, she asks if you need anything, and you tell her to pick up some Stone.
Mom returns with a 30 pack of KeyStone Light. Upon her return, she proudly claims she found a great deal on Stone. Another scenario would involve the brand new drinker. Because not everyone is a beer geek, a young drinker might have their first sip of KeyStone and burns into their brain that STONE beer tastes horrible.
One could make an argument that the scenarios I’ve mentioned are unlikely, but remember there are lots of people that buy beer that are not beer geeks like you and I, and every day someone turns 21 and decides to start legally buying beer and making buying decisions not only based on taste but also on price and alcohol content.
Last year, The Brewers Association launched an over the top campaign entitled Taking Craft Back, where they aimed at differentiating independent craft breweries from imposter, craft like brands under AB-InBev and MillerCoors.
While this isn’t a case of the big guys confusing the market with fake craft brands, it’s definitely Big Beer trying to muddy the waters with one of the biggest, most popular independent craft brands in the country. If anyone questioned whether big beer plays dirty to solidify its market share, look no further than this tactic.
In the video, Koch holds up a Keystone Light and notes that “Stone” and “Light” are “two words you would never use in association with our company.”
MillerCoors’ strategy is also part of a larger war being waged by Big Beer against independent, craft beer, Stone says in the suit.
In the $100 billion-plus U.S. beer market, sales of major brand beers have generally been flat, but craft beer sales have continued to rise, although at a slowing rate. In recent years, Anheuser-Busch InBev and MillerCoors have both acquired smaller breweries, too.
MillerCoors established a craft beer and import division in 2010, which includes former independent craft breweries including Hop Valley Brewing in Eugene, Ore., Saint Archer Brewing in San Diego and Terrapin Beer in Athens, Ga.
This is part of megabrewers’ strategy “to wrestle back market share,” Stone says in the suit.
Stone has been expanding its reach. In 2016, it also opened a brewery in Berlin and a production brewery in Richmond, Va.
I understand in 2015 MillerCoors purchased a majority stake in California-based Stone Brewing Co. so then using stone as a branding gimic not be with in their rights?