Here’s an interesting question: To what extent do companies that like to view themselves as innovators have license to launch a dead knockoff of another company’s brand? Or, looked at from another perspective, to what degree is originality overrated in the beverage wars?

It’s a perennial issue, highlighted recently by PepsiCo’s controversial launch of SoBe Life Water, its latest attempt to crack the fast-growing segment created seven years ago by Glaceau with vitaminwater. Wanting in on vitaminwater’s brisk growth and fat margins, PepsiCo hitched the effort to its SoBe platform, a relatively cutting-edge brand associated with offbeat, good-for-you ingredients. Somehow it settled in Life Water as the sub-brand, presumably because it is simple, sounds life-affirming, and instantly identifies the niche it’s playing in through reference to the market leader, vitaminwater.

Pepsi execs must have liked the name quite a bit because, just to get into the game, they first had to write a $300,000 check to Fuze Beverage for the rights to it.

In a break with its usual SoBe branding process, Pepsi played down the SoBe moniker so much as to make it near-invisible, but put its distinctive dueling-lizards icon prominently on the front of the label. But then it put the drink itself in a clear plastic bottle and cap that were very similar to vitaminwater’s, adopted a two-toned label style, and similarly broke up the brand name into bold and regular fonts. As for the formulation, Pepsi didn’t seem to have invested much effort in trying to advance the art or science: it’s a similar melding of crystalline fructose and various antioxidants and other fashionable ingredients.

Guess what? Glaceau cried foul, and a judge backed them up, dragging Pepsi to the negotiating table, where Pepsi agreed to change the label, and the cap, to create some distance between the two products.

It’s not as though, taken alone, any of the elements in question would have been a big issue. To some extent, the trade dress of the market leader creates the convention of a new category, and it can be foolish and confusing to fight them. There are some major businesses – Microsoft might be an example – that have built dominating presences simply by appropriating the best ideas of rivals, but packaging them differently.

But I think there are a few issues that made the Life Water situation problematic. First, Pepsi crossed the line in its willingness to adopt wholesale so many elements of the distinctive vitaminwater positioning. I’m obviously not the only one who came to this conclusion, given what we know now. But the massive resources Pepsi can put behind a product shocked Glaceau into filing suit.

But what drove Pepsi to do it? Even if, giving them the benefit of the doubt, their product was simply an attempt to fit with convention, rather than outright imitation, it smacks of laziness, and ineffective laziness, at that.

Regardless of intent, copying the model as closely as Life Water did is something that rarely works. Consumers (bless them!) seem able to sniff out what is authentic. At best, interloper brands generate a middling level of volume by under-pricing the leader, trashing margins for the segment as a whole.

That means that if Pepsi intended this promising segment to be a refuge from the price wars that Pepsi and Coke have waged in CSDs and bottled waters, then it had no business offering such an uninspired entry. And they should have had more foresight, because it may also have undermined their image as a company that is trying hard to convince the world it can move beyond line-extension bingo. (Beverage Spectrum- May, 2006)