No stranger to licensed food and beverages, Start Licensing’s roster boasts brands including Tango, Robinson's and R Whites. Ian Downes reveals how a brand can take advantage of the growing licensed sector and why popcorn seems to be in particular good growth.
What are your thoughts on the licensed food and drink market? Have you noticed strong growth recently?
I would answer this in two parts: one being about licensing 'in' by food and drink companies where FMCG companies use licensed properties to create products and secondly, licensing 'out' by FMCG where they are licensing their rights to third parties.
Licensing 'in' I think slowed down a few years ago particularly in regards to use of character licensing targeting children. I think this was in part a response to changing attitudes in regards to marketing to children. However, in recent times there has been a little more activity in this area but with a more focused and planned approach. An example of this kind of considered approach is Disney's link with babyfood brand Annabel Karmel.
I think character brand owners and FMCG companies have adjusted their approach and are being more selective in their partnerships. Stalwart categories which broadly speaking can be described as 'treat' products, such as celebration cakes and seasonal confectionery, are still frequent users of licensing but again there seems to be a more strategic approach with careful choices made and more effort made to add value to products.
So in regards to FMCG and character licensing I think things are behind where they were from five to 10 years ago, although I think there has been increased activity with FMCG companies using character licensing, especially film related licenses for in or on-pack promotions. For example, Despicable Me 3 and the Minions have forged partnerships with Weetabix, Hovis and Green Giant sweetcorn among others.
I certainly think there has been more growth and activity outside of character licensing with FMCG companies seeking out partnerships with brand owners to create new and innovative products.
A small review of retail shelves gives a fair indication that this type of licensing is in growth - for example you can now find Marmite Rice Cakes produced under license from Unilever, Adnams' Ghost Ship flavoured crisps and of course Tango flavoured popcorn. Three examples from one area of the store. Also have a look in the bakery aisles – celebration cakes using Cadbury's brands and other brands such as Jammie Dodgers are a staple part of the category.
I think FMCG brand owners are looking at licensing more often now – looking at it as a potential tool for them to increase the reach of their brands, access new competencies that are not in their gift and of course add real financial value to their brands. Many of these companies may have previously looked at brand extensions as an in-house function but are now recognising that licensing is a viable alternative - with the heavy caveat that they want to work with companies that they can trust 100 per cent. This desire to work with trustworthy companies is not something that should prevent things happening but it does mean that patience is needed and a consultative approach to licensing is needed.
Fortunately we have had a lot of successes – particular highlights include Honeycomb Project Management's Robinson's and Fruit Shoot confectionery ranges, which are now in their 7th year in the market.
Ian Downes, Start Licensing
Can you tell me a bit about your partnership with Britvic? How did this come about?
We have worked with Britvic for around eight years. At the beginning of the relationship there was an investment in setting strategies, scoping out processes and sharing information about the mechanics of licensing. We thought this was time well spent and a demonstration of our commitment to the opportunity. We worked with a number of different departments at Britvic to set up the licensing programme and to ensure that all the pillars were in place to build a programme from we worked on the contracts, style guides and process – once this was all done we started to think about business development.
We work on all their brands; Robinson's, Fruit Shoot, R White's, J20, Idris Ginger Beer, Tango and also have access to their heritage archive. Each brand has it's own distinct licensing programme and plan that is viewed as part of the Britvic portfolio in licensing terms - we try to avoid competing with ourselves in licensing terms.
We have a good working relationship with Britvic built on trust I believe and based on a track record of success. Our joint approach is broadly speaking less is more – we have taken a focused approach to licensing. This approach seems to have worked both in sales terms, longevity of the programme and from a qualitative point of view winning awards.
How successful has the Tango licensing programme been?
In deal terms it is the most active of the Britvic brands in volume terms. I think initially this was because licensees 'got it' more quickly than the other brands not least because of the recall of Tango's stand out advertising and the strength of the You've Been Tango'd strapline. This probably got us early meetings and attention.
We have licensees in a range of categories: biscuits, popcorn, ice lollies, confectionery, car air fresheners, shower gel and lip balms. We estimate the licensing programme is worth around £5 million at retail. In categories such as confectionery it has a strong foothold – licensee Rose Confectionery has managed it well, blending innovation with solid distribution. They have core products such as popping candy and add new lines regularly to keep the range fresh.
Which food or drink item has performed best with fans?
Fortunately we have had a lot of successes – particular highlights include Honeycomb Project Management's Robinson's and Fruit Shoot confectionery ranges, which are now in their 7th year in the market. They invested well into NPD and packaging, creating product formats that use the brands well but that are also relevant to the market category they are being launched in.
This is an important point - licensed products are entering competitive market sectors: it is important there is a gap to fill and some consideration has been given to the competition you will encounter. Established brands will not rollover and let you come into their category without a fight.
Yumsh Snacks' Tango popcorn range has been well received. Popcorn is a category that seems to be in growth so it is good to be part of this product category. Brand of Brothers' J20 and Tango frozen ice products have launched successfully with national distribution achieved in significant volume, plus consumer feedback has been positive – they seem to like the products, the taste and the flavours – frozen ice refreshment is a natural progress for Britvic. We also have Fruit Shoot and R Whites ice lollies, which was quite a proud licensing moment for me seeing all four products in one supermarket chiller cabinet.
How does a brand lend itself to food and drink items?
I think there are a number of key factors. My top five points are: first and foremost the brand has to be well established and recognised by consumers ideally number one or two in it's category; it helps to have a distinctive taste or flavour that can be translated into licensed products; it has to be active at retail – a brand that has broad distribution and visibility in grocery will always perform better as licensing can't grow distribution for the core brand.
Licensees need the core brand to be established; a strong visual identity is important. Finally I think FMCG brands may not be licensing experts but they are development experts, they understand product and NPD as it is great to work with people who are looking for NPD and innovation. Think of three of the most successful brands in food and drink licensing 'out' including Tango, Guinness and Marmite. All are good benchmarks of brands that 'work' for and in licensing.
What do you look for when seeking new partners in the food and drink category? Are you looking for more partners currently?
We seek out companies that are established and can demonstrate core competencies. They have to get the philosophy of licensing and partnership - for example acknowledging that they have to get NPD approved and that they have to acknowledge the voice of the brand. We want to work with companies who have established routes to market, but also ones that can demonstrate how the licensed brand will be used and leveraged to achieve more distribution.
I think they also have to tick all the boxes needed in terms of quality control, supply chain and manufacturing as brand owners want to work with trustworthy companies. We are actively looking for new companies and would welcome ideas from prospective licensees. We are good at finding new licensees but are also open to companies pitching ideas to us.
Are there any new deals in this sector you can shout about?
We expect to announce a couple of new deals and products in Q4 2017, as mentioned earlier we have taken a focused approach to licensing the Britvic brands. We we don't have new deals every week but we hope when we do develop new deals they are relevant and are adding to the programme in a positive way. That said a key part of our role is to maintain and develop existing business - licensing shouldn't always be about new deals nurturing existing ones is as important.