Start Licensing’s Ian Downes returns with the first Licensing Lookout of the year and a look at the flourishing food and drink category.
Barely a week goes by these days without a news report in the licensing press about a new deal or partnership in the food category. Last week LicensingSource.net reported that Krispy Kreme is launching a limited edition collaboration with Pop Tarts for example.
The food and drink category seems to be one that is flourishing in licensing at the moment. My Looking Out experience certainly suggests that. There are undoubtedly a number of reasons for this apparent upsurge. These include the ‘one gets two’ theory – brands are encouraged to get involved as they have seen others go down the licensing route and succeed; it is also likely that brand owners realise well chosen licensing partnerships can achieve cut through with consumers and drive brand engagement.
Another explanation is probably to be found in and at retail. It is increasingly difficult to secure space for new products. Adding a licensing dynamic helps brands secure space and also bring something new to a category. It is also a way of insulating a product against competition from own brand and price reductions.
One additional observation I would make about food and drink ‘licensing’ is that it isn’t always licensing in the conventional sense. There is a blend of activities going on including licensing, but also short-term marketing driven partnerships where revenue generation isn’t necessarily the prime motivator for the deal and also inter company ‘brand partnerships’. In a world where there is a lot of brand consolidation going on in the FMCG sector, it is not surprising to see some of these brand owners cross pollinating brands within their portfolios.
There are also increasing examples of brand personalities taking up ambassadorial type roles in the FMCG sector. Here there isn’t a fully fledged licensed product, but the brand personality endorses an existing range. A good example of this is TV personality Fred Sirieix’s partnership with the Knorr cooking sauce brand. It recently launched a new range of sauces infused with red and white wine. Fred has partnered with Knorr to promote the range. This includes in-store FSDUs featuring Fred and the product. Here it is worth noting the ongoing trend for brands to use FSDUs as part of their retail promotion (often but not always at launch). This technique helps grab the attention of consumers as they shop and generates good PR. When a brand works with a personality like Fred Sirieix they are also tapping into the personality’s profile and the fact that they are an authentic fit with the brand.
Fred fits the bill for Knorr’s new products well and in the context of the FSDU he helps grab consumer attention in-store. He is also a credible ambassador because of his experience and knowledge. In the context of personality endorsements, authenticity is a key component. In broad terms consumers are better at seeing through things these days and as such a ‘good fit’ in a partnership is essential.
It is also more common to see partnerships between FMCG brands and the world of sports. A good recent example of this I spotted is Chelsea FC Women partnering with Lindahl’s Protein Yoghurt. Chelsea FC Women are featured in advertising for the brand and positioned as an ‘official partner’. The link goes further with advertisements featuring a QR code to buy match tickets. This is a good example of how a promotion can help a team like Chelsea FC Women reach a wider audience and help stretch their media budget.
Christmas is a good season for FMCG licensing. Brands recognise they need to be more proactive to succeed in a competitive trading period and in this context licensing becomes an attractive option.
I flagged up before Christmas the success brands like Baileys have in the FMCG market in categories like confectionery, biscuits and pouring creams. Brand profile, taste and flavour are keys to success here and a brand like Baileys fits the criteria well. But this sort of partnership isn’t just confined to product. Coffee chains like Costa are dipping their toes into the partnership waters more often these days with a focus on taste and flavour. Costa has a partnership with Terry’s Orange to market a Terry’s Orange Hot Chocolate. This features in Costa’s seasonal range which was being marketed under the banner of ‘The Yearly Reunion’. A set of products that has worked for Costa and ones it can trust to perform. In a sense, products like the Terry’s Orange Hot Chocolate have become ‘event’ products – ones that consumers look out for and ones that become part of their Christmas routine. For Terry’s it is a great way of extending its brand experience, dialling up the flavour credentials and reinforcing the Christmas credentials. It seems to have very strong Christmas credentials – to illustrate this my son who is now 31 still gets a Terry’s Chocolate Orange from my mum as part of his Christmas presents for her; a tradition that is now 26 years old!
Rather like Baileys, a brand that has cracked the licensing code is Marmite. It has forged a number of successful partnership with partners like Nairn’s for Marmite flavoured oatcakes.
Another long-standing Marmite partnership that I spotted in-store at Christmas which people seem to love is Marmite flavoured Cheddar Cheese. This is part of M&S Food’s cheese range. It is a great example of how a licensed product in FMCG category can become a perennial in a category, not least because it offers a point of difference and exclusivity.
An example like Marmite Cheese also shows how brand loyalty can move across from a core category if the product is well produced and delivers a good brand experience.
Another example of a distinctive brand that is working more actively in the licensed space at the moment is Oreo. I noticed Oreo doughnuts for sale in the Co-Op this week. This seems to be an established product rather than a limited edition one. Again, rather like Marmite, Oreo brings a consumer following with it and delivers a distinct flavour profile. It also creates social media content as consumers seem to enjoy posting about products and partnerships like this one.
It is also interesting to see how a brand like Heinz is working in partnership with other FMCG brands to add value to a category like tinned beans. Tinned beans are a grocery staple and a product that is often price driven. Heinz, of course, is a market leading brand with great distribution and recognition but even it has realised sometimes a category needs innovation. The thinking seems to be that consumers need new reasons to buy a staple product. In its case, it has partnered with two well known FMCG brands to create unique products: Cheesy Heinz Beanz with Cathedral City cheese and Heinz Beanz with Richmond Pork Sausages. In both cases adding these two brands adds value to the product proposition, but also thinking about the busy shopper the brand association creates in-store recognition and additional reason to purchase.
It was also interesting to see the Paddington brand launch some new FMCG products in WHSmith recently. I noticed two products in a WHSmith Travel branch. One of which I bought – strictly for research purposes of course. It was a Real Chocolate Brownie with an Orange filling. I guess the filling is dialling up Paddington’s Marmalade heritage. It was a well made product and had a good flavour. It was interesting to see it being sold in WHSmith Travel – near till points – but a good reminder that there is definitely an emerging opportunity for licensing in the ‘on the go’ category in FMCG. Retailers like WHSmith Travel have upped their game in the food and drink category. People are looking to buy products quickly and move on – things like snacks, sandwiches, drinks and confectionery – in this context a well chosen licence can help manufacturers develop a product that gets recognised quickly by shoppers. A licence can also help get the product’s core proposition understood in a fast moving shopping environment. Paddington, Marmalade and Orange are three things that consumers ‘get’ and respond to.
Lots to report about in the Look Out this week, but I think my first Look Out of 2025 has certainly made me hungry. I am off to the shops to buy myself a licensed filled lunch. Judging by my recent shopping experiences it won’t take long to find my licensed lunch these days.
Happy New Year to everyone and I’m looking forward to Looking Out in 2025.
Ian Downes runs Start Licensing, an independent brand licensing agency. His X handle is @startlicensing and on Instagram he is @iandownesphotos – he would welcome your suggestions for what to look out for.
