Twenty-Year Technical Lead as Moat

"Overall, the problem-solving of the first generation – technically, market-wise, and legally – had given subsequent employees a 20-30 year lead. Many of Tetra Pak’s later generations of employees have lived under the illusion that the company’s products have always sold themselves. This was certainly not the case in the 1940s, 50s, and 60s."

"It turned out quite quickly that Åke Gustafson was right. The problems were solved and the “torpedo” Palm had managed to get the technicians in order at the factories. Once it was working, Tetra had an aseptic packaging that was both easy to pack at the dairies and consumer-friendly. At the same time, the packaging was inexpensive compared to what the competitors could offer. The main competitor, Pure Pak, did not have an aseptic packaging and was thus excluded from many markets. The system gave Tetra Pak nearly twenty years of lead."

"Tetra Pak had long lived on being both the price leader and technologically superior, where they protected their technology through various patents. Even when the patents expired, it took a while before competitors had developed the knowledge to copy the Tetra systems, especially the aseptic packaging. With the help of various additional patents, Tetra Pak’s Aseptic Tetra Brik system protected its technology from being copied by others. However, these patent protections began to expire in the early 2000s. Strengthened by the EU ruling against Tetra Pak, the Swiss company SIG Combibloc had started a more aggressive strategy at the turn of the millennium to compete with Tetra Pak’s aseptic systems and packaging. There were also other competitors within aseptics who began to challenge Tetra Pak’s leading position."