Start Licensing’s Ian Downes looks at how Iceland is using licensing and why it is a reminder that brands have real value in the competitive world of grocery.
In last week’s Lookout I talked about how I think it is important that licensing pushes itself into new parts of the retail market and explores new ways of distributing licensed products.
With this thought in mind, it was interesting to see how the retailer Iceland continues to embrace licensing and how much licensed product features in its current offering.
Iceland is a great case study of how a retailer is using licensing to offer its consumers choice and variety in a strategic way. Broadly speaking, Iceland’s use of licensing divides into two main strands: selecting licensed products from trusted suppliers to supplements its own ranges and existing FMCG brand offerings and, secondly, taking the initiative and licensing brands directly to create its own brand offers under licence.
In terms of Iceland’s own brand offerings, it has had long-term partnerships with Greggs and Slimming World.
In the case of Greggs, it was a bold move to develop a range featuring another retailer but it seems to be one that has paid off and one that works for both parties. Greggs is a trusted and familiar name for Iceland consumers with a portfolio of products that work well in the context of Iceland.
The Slimming World range has been a great success for Iceland and is a great example of a retailer identifying a gap in the market and using a brand to build an offer within that gap. In both cases Iceland supports the brands with dedicated space in-store, signage above fixtures and a commitment to NPD.
The success and experience from these two ventures has, I am sure, inspired and encouraged Iceland to seek out other opportunities.
A trio of newer direct deals in Iceland at the moment caught my eye. They show how Iceland seems to be trying to use brands to help engage with consumers and to encourage consumers to top up everyday shopping. Brands catch the consumer’s eye and of course give them reassurance.
While Iceland is a very competitive retailer price-wise, it seems to have recognised that consumers also want to try new products and trade up.
The first is a range of TGI Friday’s branded products including signature items like a Brownie Obsession dessert, Jalapeno Cheese Bites and BBQ Ribs. Again the range is well promoted in-store and uses the signature TGI Friday’s branding to signpost its location. The products in the range are competitively priced around £2 – £3.
There is a risk in a restaurant chain licensing its name and brand into convenience foods – is it undermining its own offer? But, of course, in recent times having your brand available via a retailer like Iceland has probably been a great Plan B for a restaurant chain.
As in all licensing deals, it is vital that the rights holder is happy with the product, the design and the overall presentation, so I am sure this range was developed with care by both parties to ensure there was a consistency with the restaurant offer.
The second example of a new ‘exclusive’ to Iceland that I spotted is a very recent addition I believe. It is a range of Del Monte branded frozen fruit including Lime Slices and Raspberries. Again here Iceland has used its knowledge of its consumers and pre-existing categories to identify an opportunity to add value with a trusted brand. Del Monte is a brand consumers know and trust – it is naturally associated with fruit produce. It is another example of smart practical thinking from Iceland – products like Lime Slices offer value and convenience to consumers.
Iceland is also running a ‘frozen iced refreshment’ range aka ice lollies featuring Barratts’ confectionery brands such as Black Jacks, Fruit Salad and Sherbert Fountains. I understand this range has increased this year building on a 2020 launch. It is encouraging to see Iceland growing a range and is a good reminder that there is a value in nurturing relationships in licensing.
There is always a ‘watch out’ when working with a retailer exclusively as it can be difficult to build other relationships outside the ‘exclusive’ retailer. That said, Iceland’s recent track record shows it is more than capable of building a long-lasting presence for a brand in its stores and is clearly committed to NPD within a range.
I spotted another Iceland exclusive that is using a well known brand in an innovative way.
In this case for an individual product rather than a range. Iceland has created a range of Butterkist toffee and popcorn flavoured ice cream cones. Products like this will catch the consumer’s eye and are ‘call to action’ type products. They give a consumer a fresh and new reason to shop in Iceland. They are also products people will talk about and share with friends. For the brand owner it is an effective way of testing the NPD waters and feeling their way in licensing. It gives them some sense of how far their brand can travel.
Iceland also supplements its own licensed ranges by cherry picking licensed products from other suppliers. Again I am guessing this is to ensure it has an interesting and compelling product, plus working with suppliers allows it to take up opportunities that appeal to it in a flexible way. My sense is that Iceland is keen to be an agile retailer capitalising on opportunities that present themselves quickly. Of course, it is also looking for good deals from suppliers to pass onto consumers.
Examples of licensed products that it was stocking included R Whites Lemonade Ice lollies and a range of Swizzels Matlow Ice Lollies featuring confectionery brands Drumstick Squashies and Parma Violets. It is interesting to see the breadth of innovation and licensing in this category across the board. Iceland’s support of licensed products extends into other categories as well. It was also stocking SPAM Fritters – again using a well known brand on a product that is a perfect fit and creating a convenient product for consumers.
It was very encouraging to see how a retailer like Iceland is using licensing and a reminder that licensed brands have a real value in the competitive world of grocery.
Brands bring credibility, depth and consumers. Iceland is a great example to point to of a retailer that gets licensing, but also one that knows its customers and what they want.
Ian Downes runs Start Licensing, an independent brand licensing agency. His Twitter handle is @startlicensing – he would welcome your suggestions for what to look out for.
