Reputation Gurus

With summer on the way, pretty much any day is a good day for frozen yogurt.  Today, fro-yo is making a big comeback as a new generation of companies reinvent the product for the 21^st Century by touting the benefits of probiotics and natural ingredients under intriguing brand names like Pinkberry, Red Mango and Starfruit. 

But as Pinkberry learned recently, one has to be careful about what one claims. As reported in the New York Times, a class-action lawsuit charged Pinkberry with deceptive advertising that inproperly claimed it was “all natural” and mis-classified the product as “frozen-yogurt.” Clearly, these claims were meant to distinguish the company from competitors. 

Pinkberry recently settled the case for $750,000 that will go to Los Angeles hunger and children’s charities and the promise that ingredients will be listed.  While people like the taste, the “all natural” claim suggests the product is better for you and has fewer calories.

It does make one wonder, though, if the stain of scandal will prompt consumers to second guess their purchase of premium products in a slowing economy. Will there be a meltdown in the frozen yogurt market? It may take time to see if this year’s fro-yo craze will stay hot after the weather gets cool. And if the new generation of yogurt chains have learned how to market frozen yogurt that can stand the test of time…and competition.

Red Bull has successfully sued several bars for substituting other energy drinks to patrons who ask for a mixed drink with Red Bull.  A Chicago court just awarded the company more than $500,000. 

Red Bull now runs the risk of hurting its own reputation.  Why?  The company that created the energy drink category looks like it is bullying competitors.  And, if that message is delivered by your friendly, neighborhood bartender, you’re pretty likely to believe it. 

Simply “being in the right” may not be enough to win in the court of public opinion if a company doesn’t aggressively manage its communications.  Red Bull must protect itself with consumers.  Failure to do so will harm its reputation and, likely, threaten sales.