Something fascinating is happening in America’s grocery and retail aisles, and it’s ending up in federal courtrooms. We’re witnessing what could be the opening salvos in a major battle between national brands and the retailers who increasingly compete with them through their own private label products. The recent lawsuits from Lululemon, Mondelez, and Smucker’s against Costco, Aldi, and Trader Joe’s respectively represent more than just isolated legal disputes—they signal a fundamental shift in how retailers view their relationships with the very brands that built their businesses.
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The Economics of Imitation
What’s driving this sudden surge in trade dress litigation? According to legal experts cited in Business Insider reports, it’s fundamentally an economic story. With inflation squeezing household budgets, consumers are increasingly turning to store brands for savings. The numbers tell a compelling story: approximately a quarter of all products sold now come from private label brands, and virtually every U.S. household has purchased private label grocery items in the past year. Amazon and Whole Foods reported a 15% increase in private label sales last year compared to 2023—a statistic that should make every national brand executive nervous.
What’s particularly interesting is how this represents a maturation of the private label market. We’ve moved far beyond the days of generic white packaging with black Helvetica text. Today’s store brands—think Costco’s Kirkland Signature or Target’s Cat & Jack—often feature sophisticated packaging and product designs that rival, and sometimes intentionally mirror, their national brand counterparts. The question becomes: when does competitive inspiration cross the line into consumer confusion?
Legal Lines in the Sand
The current lawsuits provide a fascinating case study in how different retailers approach the private label opportunity. As legal experts note in the Business Insider analysis, the defendants in these cases—Aldi, Costco, and Trader Joe’s—share an important characteristic: they’re not major customers of the brands suing them. This creates a different risk calculus. Mondelez isn’t jeopardizing a significant revenue stream by taking on Aldi, and Lululemon isn’t dependent on Costco for distribution.
Contrast this with Walmart and Target, both of which maintain extensive private label portfolios while carefully managing relationships with national brand suppliers. As reported, their executives go to great lengths during earnings calls to reassure national brands that coexistence is possible. It’s a delicate dance—retailers want to capture the margin benefits of private label without alienating the brands that drive foot traffic.
The legal standard, as intellectual property experts explain, ultimately comes down to consumer confusion. Are shoppers genuinely mistaking the store brand for the national brand? Smucker’s lawyers apparently found social media posts where customers incorrectly believed the company was making Trader Joe’s version of Uncrustables—exactly the type of evidence that strengthens a trade dress case.
Broader Market Implications
What makes this trend particularly noteworthy is its timing. We’re seeing these lawsuits emerge just as private label products are achieving unprecedented quality and consumer acceptance. The stigma once associated with store brands has largely disappeared, replaced by consumer savvy about getting comparable quality for better prices. This represents a fundamental threat to national brands that have built their businesses on premium pricing justified by brand equity.
The strategic implications are substantial. National brands face a difficult choice: do they maintain their premium positioning and risk losing price-sensitive customers, or do they introduce value lines that might cannibalize their core business? Meanwhile, retailers are discovering that private label isn’t just about margin—it’s about control. When you control the brand, you control the pricing, the marketing, and the customer relationship.
This tension reflects broader changes in the retail landscape. The traditional manufacturer-retailer relationship is being upended as retailers develop their own branding capabilities and direct-to-consumer channels give manufacturers alternative routes to market. What we’re seeing in these lawsuits is the legal manifestation of this structural shift.
The Enforcement Imperative
There’s another crucial dimension to these cases that goes beyond immediate competitive concerns: the need to protect intellectual property rights. As one legal expert noted, if you don’t enforce your rights, you risk losing them. For national brands with valuable trade dress, allowing lookalikes to proliferate without challenge could weaken their legal position over time.
Filing these lawsuits sends multiple messages. Obviously, they warn the specific defendants to back off. But perhaps more importantly, they signal to the entire market that the brand owner is vigilant about protecting its intellectual property. This deterrent effect can be valuable even if some cases settle quietly.
The aggressive marketing tactics through packaging that legal experts describe represent a testing of boundaries. Companies are pushing to see how close they can get to successful products without crossing legal lines. This creates a natural tension—the more successful a product’s trade dress, the more likely it is to attract imitators.
Looking Ahead: More Conflicts to Come
All signs point to increased litigation in this space. As private label continues to gain market share and retailers become more sophisticated about product development and packaging, the opportunities for conflict multiply. What’s particularly interesting is how digital commerce changes the calculus—online, packaging and product appearance can be even more important since consumers can’t physically examine products.
The evolution of private label from generic alternatives to premium competitors means we’re likely to see conflicts across more product categories and at higher price points. The days when private label meant basic commodities are long gone—today’s store brands compete in categories from athletic apparel to gourmet foods.
What remains to be seen is how courts will respond to these cases. Trade dress litigation can be notoriously subjective—what constitutes confusing similarity to one person might seem obviously different to another. The outcome of these early cases could set important precedents that shape how aggressively retailers pursue private label opportunities that resemble national brands.
One thing seems certain: as the retail landscape continues to evolve, the lines between partner and competitor will only blur further. The lawsuits making headlines today may be just the beginning of a much larger restructuring of how brands and retailers coexist in an increasingly competitive marketplace.
