Updated: Jan 2, 2021
This brief interlude on the food licensing world will give you an insight into some of the challenges you will have to overcome if you are thinking of using licenses for your new product development.
There are many positives to using someone else’s intellectual property which we will list just a few to give you a insight of the benefits:
1. The use of a license can help you gain a quicker reaction and route into the market as long as you do not just “logo slap” and ensure your own brand stays key to the overall look.
2. You will benefit from cross-promotion opportunities with other same licensed suppliers, in fact, as long as the license holder is responsible you can create a proposition with the character and other brands that will push an agenda for good to the target audience.
Barbie (Mattel) is a great example of this where they will only work with suppliers that meet their nutritional guidelines, thus elevating all partners to be at the same standards and push boundaries within the kid's category.
3. Retailers are happy to introduce key licensed products in their catalogues as they are usually a part of a larger storewide merchandise plan (especially for seasonal opportunities). So as long as you work with the right partners and your product fits a need, you will have volume sales.
4. Licensors want your product to do well so they support their growth into new markets, such as the FMCG sector which is fairly new for licenses. It is key that their brand gives eyeballs the chance to see their brand in as many different areas of shopping as possible which ultimately feeds back to their core demographic, kids. They can also assist you with retail listings.
On the other hand, there are some obstacles along the way, and the main one maybe license brands playing a slightly less influential role on the product packaging. Why? Because they are an entertainment medium whilst the master brand could be a food specialists.
So, in the same way, you must retain a strong master brand message that resonates with the license - not conflict with it. You also need to make sure the license has its vision aligned with doing things the way that matches your brands vision.
It is also advisable that you work with a company that is familiar with the licensing world to broker the best deal for you so you do not overspend on royalty fees and minimum guarantees (upfront fees for use of the license)
There is also other problems to consider like competing against household brand names in the sector that have years of history and presence ahead of you, as well as a bigger budget and usually a rather influential status in the retail chain.
This can be seen as an opportunity rather than a challenge. When you are a smaller brand/producer you can be more dynamic and quicker to react to market trends; in our case, when formulating our license drinks for our clients we were the first adopters of the now widely used stevia leaf. This helped us reduce the need for sugar in our drink product developments and give us a unique avenue for potential retail listings.
This also meant that through our collaboration with our license client we could scale up knowledge of the innovative ingredient quickly, and influence a change in the children's beverages category generally.
In fact Stevia is now being used by large brands such as Coca Cola, who cited our use of the ingredient in internal presentations.
We have an obligation to make sure that kids are given great products that are great for them too. At times licenses can go for the shortcut and allow products that are less beneficial for kids to bestow their trademark, we will not work with licenses that think in this way.
The license partners we work with also see the benefit of our approach and are reaping the rewards from us giving them a presence in the previously unfamiliar territory. We pick licenses that we enjoy, and that has a fantastic story to tell!
Our product development is important to licensors, they know when they work with us all our products will meet our set of rules:
Drinks: We never add sugar to our drinks
Dairy: We only use real milk from farms that treat the animals properly.
Food: We only make portion sizes that have no more than 100 calories.
Because licenses help boost sales they help us meet more important targets*:
Cutting sugar from supermarket shelves
Replacing plastic straws with biodegradable ones
Reducing plastic use by reconfiguring our outer case packages