"Licensing is a specialist business, but sometimes it needs to be refined and retuned to suit a new opportunity," Ian Downes, director of Start Licensing tells Licensing.biz.
We're on the topic of food and beverage licensing. In particular, we are on one of Downes' favourite topics within that sector: Britvic. It's been, after all, eight years since the brand came under the Start Licensing portfolio, and in that time it has established itself as a retail favourite.
But as the food and beverage sector picks up pace in the licensing sector and more and more, opportunities begin to present themselves for brands within it, Downes realises that the key to success is in a brand's flavour for adaptability.
The Start Licensing director sits down for an in depth chat with Licensing.biz about the industry's newly refined palate for food and drink brands.
Can you talk us through the strength of the food & beverage licensing sector, what are the biggest trends in this space at the moment?
Food and beverage licensing can be loosely divided into two areas of activity - licensing in, whereby FMCG companies use licensing to create new products and secondly, licensing out, whereby brands license their own brand to third parties.
The former has always been a factor in licensing. Some 25 years ago when I worked at Copyright Promotions the sector was so strong we had three people managing the category. That said the focus was on character licensing and the products were relatively basic.
These days FMCG brands are using licenses to create products in a more focussed and tactical way. The reach of licensing has gone beyond character licensing and now includes brand licensing.
Another trend is that licensees in the children's sector have responded to society's concerns on health and diet. We are seeing more thoughtful products and licensees developing ideas that are responding to market trends and consumer concerns on ingredients , pack sizes and packaging.
My own experience of working with Britvic and their brands such as Tango and R Whites has been a great example of how FMCG brands are engaging with licensing and also that licensees have recognised the value of brands. Brand owners recognise that licensing can add value to their brand, help them reach new market sectors and help them realise innovation that they aren't able to achieve themselves.
It also allows challenger brands in categories to compete with their rivals. That said, a brand used for licensing needs to have consumer awareness , retail acceptance and the ability to embrace licensing - for example having a willingness to develop a style guide and a method for approving products.
On the latter point, when food brands are extended it is important that flavours, recipes and taste are checked. Consumers seem more prepared to try new products and are a little more adventurous - this has opened the way to licensing with brands looking to create new variants and flavour combinations.
One of our longest running Tango products are Tango flavoured Jaffa Cakes - this tapped into a trend for new and unusual flavours in biscuits and chocolates whilst the Tango brand provided retailers with a recognisable brand to feature in store.
How are we seeing this space evolve today? What is leading the way for innovation in this area of licensing?
In my experience, the food industry is getting better at innovating and is also more prepared to invest in NPD. This is also coupled with the recognition that brands have a real value in a competitive consumer and retail market.
We have found that well-qualified and experienced manufacturers are turning to brand licensing as it allows them to deploy their product development skills in tandem with a powerful brand that will allow them to compete at retail.
The skillset from licensees has also got better - if you take a category like celebration cakes, 20 years ago these were generally standard cakes with a sugar plaque on - very simple and unsophisticated. These days, we see more innovation with add ons, shaped cakes and exciting flavours.
The category has evolved and licensing has helped drive this evolution.
In my experience with Britvic we have been able to work with companies like Brand of Brothers and seen our business grow with their business. They were a start up company in the frozen ice sector when we first started working with them but were a company staffed by highly-experienced and respected executives. We were able to work with them in a close way to create bespoke products for R Whites , J20 , Robinson's , Fruit Shoot and Tango.
The development process was rigorous but both sides were determined to create the best products possible - in terms of their fit with the brand, their ability to appeal to consumers and to fit into the market.
Factors like format, taste, flavour, cost and price all come into the mix. The products had innovation at their heart. I think these days it's vital to have a real focus and dialogue on product development with innovation being a key challenge as well.
Licensed products need to compete with established brands in categories. Innovation really helps licensed products compete.
How has Start Licensing's business in the food & beverage sector grown over the last couple of years? Is this in line with the growth of the sector in general?
We recognised that there was an opportunity for us in representation terms some time ago and ended up representing Britvic. We work closely with them and in a very focussed way. This focus and bespoke management style has been the right way of working. It's labour intensive and a new style of licensing but I think it reflects the modern licensing market and opportunity.
Licensing is a specialist business but sometimes it needs to be refined and retuned to suit a new opportunity. I think we have done this successfully.
Outside of our work with Britvic it would be good to see more FMCG companies considering licensing both inbound and outbound. We have spent a lot of time trying to develop business in the category - lots of new business calls, comp shopping and visits to trade shows.
I think awareness and acceptance of licensing is growing but there is still some resistance from manufacturers - I think this can be overcome by showing positive examples of licensing such as the Britvic programme.
How is the Britvic brand sitting within this space? What does the brand encompass now? What are the key partnerships for it? What new partnerships have you got in the pipeline?
We are now about eight years into the Britvic licensing programme and I think it is established in the market.
We have a number of long term licensees such as Rose Marketing who have developed a Tango confectionery line and have been on board from day one. They have been focussed on innovation and constantly add new products and formats. They have realised that a strong brand can be a great asset but as a licensee you need to contribute to the process by committing to NPD and innovation coupled with a proactive approach to retail sales.
Too many licensees think that securing a license means the job has been done. In my experience, the most successful licensing partnerships are ones that combine a good brand with a proactive licensee.
In licensing terms, Britvic has licensed products across R Whites, Tango, Robinson's, Fruit Shoot and Tango. The brands are managed individually but in a collective way - for example Brand of Brothers have accessed the whole portfolio to create a range of frozen ice products.
In other cases, licensees such as Streamline have focussed on an individual brand - in their case Fruit Shoot - which they have used to initially create jam products and more recently fruit snack bars.
This is a good example of how we have worked with licensees on NPD and developed a partnership mentality.
Other licensees such as 151 Products have been on board for a long time - they are marketing car air fresheners - a good use of the brand and a very visible use of the brand which appeals to the brand owner. Even here they have invested in new formats and packaging along the way.
We have added new licenses to take up specific retail opportunities for example More For Your Store has launched tin moneyboxes - they are recognised for this product in the market and have a ready made route to market for them.
Crackerjack has also been a licensee for a long time in their case for lip balms. They have developed Tango and J20 products. They have also developed product at different price points and in different formats to embrace a range of opportunities from impulse in value retail through to composite gifting. They are a very competent and focussed licensee who really know their category well.
Scoop Designs have come on board this year for composite gifting to target the Christmas gift market. This is a good example of targetting a category and finding a way of gaining a presence in it.
We are looking to do more of these kind of tactical deals - pursuing seasonal opportunities and tapping into trends in areas like apparel.
Britvic has worked in apparel before, in fast fashion in particular. There is also a Britvic Vintage Archive which would suit certain categories including apparel and gifting.
We are always looking for new product partnerships but are very careful that they have a good chance of success and that they will add to the programme rather than detract from existing momentum.
You can add new things from existing licensees - it isn't always about launching new categories. We have focussed on nurturing our existing licensees and growing with them by NPD, extending retail reach and promotions.
What is the appeal of the Britvic brand in the Food & Beverage arena - what are the values of the brand and how are these applied/do they translate through partnerships?
I think the core appeal is that Britvic Soft Drinks are a well established and successful business. In retail and consumer terms they are firmly on the map.
Have a look in retail and in most types of accounts you will see Britvic products on shelf. They have a distribution reach which stretches outside of retail into leisure, theme parks, the pub trade and cinemas.
Licensees are aware that brands like Tango have a great track record and are proactively supported by Britvic. In food and beverage terms brands such as Tango, J20 and Robinson's have well established flavour profiles, brand identities and recipes. All of these make good sense in NPD terms as a licensee has a lot to base their product on and they are working with proven brands.
There's a big call for consumer experience within licensing now, and F&B is moving more and more into it - is Britvic tapping into this currently?
Britvic's marketing, PR and promotional plans tend to reflect new marketing opportunities well and their brands connect with consumers in different ways and consumer 'experiences' are part of this.
Some of these activities are partnerships that have been around for some time - for example Robinson's involvement with the Wimbledon Tennis Championships.
Britvic tends to use this sort of thing as a brand focal point and carry out retail activations to coincide with it - for example creating replica tennis courts in retailers. Another example is that Tango is available in an ice blast format in cinemas giving consumers a different but still 'on brand' experience.
I think licensing can help by supporting this sort of thing to amplify the activity further rather than create standalone events.
What future growth do you see for F&B licensing? Where is Britvic's place within this?
As the media and advertising markets shift and change I expect to see F & B licensing coming to the fore more - it will give brands new options for product development, brand communication and consumer connections.
It is an opportunity for brands to innovate and be dynamic while remaining on brand. I think brands will look at other brands like Guinness and Britvic which have had success in licensing and be encouraged to look further at licensing.
I think confidence in the process will encourage other brands to take part in it.
Conversely I think some manufacturers who are struggling to break into retail with their own brands or who are looking to create a brand may look to 'rent' a brand through licensing to allow them to gain market entry and be competitive.
Britvic is well placed to continue to be successful in licensing. They have a solid track record of success in qualitative and quantitative terms. They own brands which are well established and successful in their categories.
There is reason to be optimistic for ongoing success.