Like any business, the licensing industry goes through its share of growth spurts, both long-term and short-term.
While some categories have quick-fix fad periods that give the industry a sudden boost, others show a steady rise, allowing licenses to become an important part of a company’s overall business and marketing program.
This latter scenario has been the case in the food and beverage arena, where brand-building initiatives and product extension plans have both licensors and licensees seeking long-term commitments.
Food-to-food licensing has been extremely prevalent in recent years, as many companies have seen the inherent psychology to branding a product, and are realizing the many benefits of an effective licensing program. Since the brand name is already embedded in consumer minds, there is no learning curve. That reduces research and development costs, and also provides an additional recognition and awareness opportunity as well as a new revenue stream from royalty income.
For example, Good Humor/Breyers recently signed a 10-year deal to license its Creamsicle brand name to a candy company. This is a natural extension for an already recognized product. The license extends the brand from the frozen aisle to the candy section of grocery stores.
Through clever identification with a favorite character or classic property, a basic cereal product can become a favorite food for kids. Nowhere is this more evident than with Post Cereals’ Pebbles brand which, at 31 years, is one of the longest-lasting branded food products in the history of licensed merchandising.
If the Glove Fits
Non-food companies also are focusing attention on long-term deals to keep licensed brands in the public eye. Little League Baseball is an example of a classic program that has become an enticing entity to which food companies and other marketers are attaching themselves. From bat-shaped pretzels and ball-shaped cereal to league-branded packaged lunch foods, companies are recognizing the value in this and other classic American institutions.
Binney & Smith likewise sees a natural fit with foods. The company’s Crayola brand is all about color, creativity, and fun, which leads seamlessly into the baking product category for such extensions as cupcakes, decorations, cookie bouquets, and holiday baking kits. The current new-color trend in the food market (for ketchup, spreads, and other products) has opened the door for one of the country’s most recognizable names in color to succeed with co-branding.
These are just a few examples of the plethora of entities which have become a staple of consumers’ lives over the years. The demand for these types of products and properties will never wane, leaving the food and beverage arena open for business for years to come.
With the annual Licensing International Show just around the corner, food and beverage licensors are gearing up to meet with manufacturers, marketers, promoters, and retailers from around the world. Scheduled for June 11-13 at the Jacob K. Javits Convention Center in New York City, the event will bring together more than 18,000 industry insiders from 72 countries.
Charles Riotto is president of the Licensing Industry Merchandisers’ Association. Reach him at email@example.com.