0.51% Walmart ad-to-sales percentage
Updated to add Blue Buffalo statement.
Nestle Purina is suing Blue Buffalo for false advertising, disparagement and unjust enrichment, saying the upstart brand is falsely claiming its products contain no animal byproducts or grain.
The lawsuit comes less than two months after Blue Buffalo, which has built its brand with advertising making pointed comparisons of its ingredients to those of rivals, retained investment banking firm JPMorgan to lead an initial public offering. The suit is backed by an unusually sophisticated communications effort that includes its own website, petfoodhonesty.com.
In a strongly worded statement sent to Ad Age, Blue Buffalo Founder and Chairman Bill Bishop said the company "categorically [denied] all of these false allegations and will aggressively defend the integrity of our brand and our products," adding, "It is an easy thing to make unsubstantiated claims, put them in a lawsuit and then publish them all over the web. ... It is quite another thing to prove those allegations."
He concluded the statement by saying, "We have a saying at Blue Buffalo: 'When we're right, we fight.' We look forward to seeing Nestle Purina in court."
Both the Nestle Purina website and the complaint in U.S. District Court in St. Louis cite a March finding by the National Advertising Division of the Council of Better Business Bureaus that found Blue Buffalo's ads comparing its ingredients to other brands are unclear as to which rivals are referenced and don't provide evidence to support claims that rivals are actively concealing what's in their products. The NAD case was initiated by another Blue Buffalo rival, Colgate-Palmolive Co.'s Hill's Pet Nutrition unit, not Nestle.
In response to the NAD decision, Blue Buffalo said it would make changes to its True Blue Test, an online side-by-side comparison of various brands' food ingredients, as recommended by the NAD, but that it would appeal other findings to the National Advertising Review Board.
Nestle not bound by NAD decision
Because Nestle wasn't party to the initial NAD action, it's not bound by restrictions against litigation of issues under review by the industry self-regulatory bodies.
Asked whether the timing of the lawsuit was related to the IPO, Nestle Purina spokesman Keith Schopp said, "We filed the lawsuit today because we believe honesty is the most important ingredient." He declined to say whether Nestle will do more communications aimed at refuting Blue Buffalo's comparison advertising beyond the lawsuit.
Mr. Schopp acknowledged that the NAD decision didn't directly address Nestle's allegations regarding Blue Buffalo's ingredients, but said he doesn't believe it could be misleading to include the NAD decision with the complaint or the petfoodhonesty.com website. "We specifically say the lawsuit follows a March decision," he said. "So I think there's a clear distinction between our action today and the March NAD decision that was actually involving a competitor."
But he did note that the NAD had recommended Blue Buffalo remove from its TV campaign "all allegations that Blue's competitors are misleading consumers."
"This is not an action we take lightly," said Steven Crimmins, VP-chief marketing officer of Nestle Purina in a statement. "We believe consumers deserve honestly when it comes to the ingredients in the food they choose to feed their pets."
He said Purina's commitment to pets and their owners "is not a marketing ploy or advertising slogan," and for his brand "what goes in the bag goes on the label."
Blue Buffalo's promotion, ads and packaging, which got around $50 million in media support last year by Nestle's estimate, said its products contained "NO chicken/poultry by-product meals." But Purina alleges that its testing from an independent laboratory found several of Blue Buffalo's "Life Protection" products contain "significant portions of poultry by-product meal." Nestle also alleges that several Blue Buffalo products promoted as "grain free" actually contain rice hulls.
Nestle's independent testing was not part of the evidence reviewed by the NAD, which said Blue Buffalo was "free to promote the high-quality ingredients in its products."
Blue Buffalo's Mr. Bishop said in his statement that the company looked "forward to disproving the voodoo science that Nestle Purina relied on."
Sales of the privately held Blue Buffalo aren't available, but it has emerged as one of the fastest-growing brands in the super-premium segment, which has been growing faster than the rest of the industry in recent years. Indeed, Mr. Bishop said that Nestle Purina's "inability to compete ... is the key motivation for this frivolous lawsuit."