Food licenses can provide instant identification with a brand, but also work across a variety of categories because they embody utilitarian concepts, such as freshness, wholesomeness and youth, that can be applied beyond edibles.
Global Icons, which handles the Cold Stone Creamery license, has been developing programs for foodservice operators who are rolling with the punches thrown by the recession. Bill McClinton, Global Icons' senior vice president of licensing, says that as consumers have shifted to more at-home dining, foodservice operators have moved into licensing.
"We have a number of food clients currently including Cold Stone Creamery, Mrs. Field's and Steak and Shake and we just signed Danon yogurt, Bennigan's and Steak and Ale. With Cold Stone, we just finished a dessert topper deal that comes out to the market in the first quarter of next year. For Mrs. Field's, we are finalizing an in-store bakery cookie program for a major retailer. And for Steak and Shake, we're signing a deal for their singular Frisko steak sauce."
McClinton says that for restaurants—even defunct operations such as Bennigan's—the branding done to position the eatery is readily transferable and an asset that can be licensed.
"A lot of these restaurant brands had been hesitant prior to when the recession hit, but now they are looking for incremental revenue streams. And, with a lot of families staying at home, they want to have the interaction at home and eventually drive them back to the restaurant with value," says McClinton.
In today's food licensing, attention is paid to maintaining the integrity of the brand, another factor that can make a potential licensor more confident in undertaking a project. Products developed must be consistent with existing brand identifications and values and not dilute a reputation.
For Cold Stone, the dessert topper program is a natural fit with the ice cream parlors and how to mix different treats into one of the chain's "signature creations." The program not only creates revenue, but keeps the experiences associated with the brand, McClinton notes.
"We started with products that stay closer to the menu," he says. "Then we evolved to products that contain the essence of the brand."
A few years ago, Jelly Belly's developed a candy line, now widely available at retail, using signature creation flavors made famous by Cold Stone. Launched last year, Cold Stone Creamery chocolate truffles from Turin Chocolates expanded in 2009 and now are sold at mass, club, drug, grocery and specialty stores including Target, Walgreens, CVS and BJ's. Now, Cold Stone Creamery ice-cream makers are rolling out at mass market, including Toys"R"Us and specialty stores.
McClinton noted that, while general merchandise deals are great, licensing food products has particular advantages. "There are so many more grocery doors, more places to sell into than just Walmart, Kmart and Target. You can do a regional program and still have a huge revenue hit with an independent, or with one Kroger region or a club region rather than depending on one buyer at Walmart to make your year."
At TLC, consumables is a licensing category that has quickly built momentum. Angela Farrugia, group managing director, says that anything consumers regularly put into their shopping baskets—and that includes, for example, laundry and cleaning products—makes so similar an impression that it should be considered as a category with food rather than artificially segregated.
"Food licensing is still developing and growing," she says, "but only with brands that clearly reflect what consumers want in life. We have signed new agreements across the board, with a host of new product areas either in development or just breaking into the market. We launched Jim Beam premium chili with Whiteys for foodservice, which has been greatly received in restaurants and bars. Malibu premium chocolate bars with our partner Turin will be launching shortly. We have also signed an exciting new brand that will allow us to re-create restaurant meals at home."
TLC is Jelly Belly's representative and has new products coming out beyond the candy category, with soft drink launches on the way. "Jelly Belly sodas are exciting as well as Jelly Belly smoothies, both utilizing the top tastes and flavors of Jelly Belly candy. Alongside, we have Jelly Belly ice-cream toppings and sauces about to come into the shelf-stable aisle. We also signed our first deals with Welch's," says Farrugia.
Farrugia says that product emerging under the Welch's label will remain true to the core brand attributes the grape juice producer wants to project—healthfulness, antioxidants and wellness. Welch's has been slow to license for fear that a frivolous product with its name might undermine the brand building it has done for its grape juice products. It is working on new programs with the understanding that its core brand assets will be supported rather than undermined.
"The antioxidant power of the purple Concord grape is well documented. So all categories that we are developing will have this health and wellness promise attached," says Farrugia.
As the basis of its licensing, Dr Pepper Snapple Group is leveraging a strong portfolio of widely regarded brands, says spokesperson Carla Peyton. "DPS has a trademark to fit many opportunities. We have strong carbonated beverage trademarks in Dr Pepper, Crush, 7UP and A&W, as well as non-carbonated teas and juices such as Motts and Snapple. We also can help a partner gain credibility with the Hispanic population by utilizing our Hispanic-skewed trademarks such as Clamato, Hawaiian Punch, 7UP, Squirt and Penafiel."
Dr Pepper Snapple Group is concentrating on relationships to keep its licensing operation tight and to the point.
"We are looking to create long-term relationships with a few key partners," says Peyton. "We have great partners in Anheuser Busch, Jelsert, CH Robinson, Jelly Belly and Brachs. Some of these relationships we have had for more than 20 years. We are looking to continue to build our trademarks in the key channels where we sell our core beverages like grocery, mass, drug and convenience. We are also looking to expand to other non-traditional channels for our core business like better department stores. This will allow our consumers the opportunity to experience our brands in every part of their lives."
Another Jelly Belly partner, Dr Pepper Snapple Group's work with the brand suggests how it wants to develop its overall licensing business. "Our partner, Jelly Belly Candy Co., started with one product, the Dr Pepper-flavored Jelly Belly bean. They followed that up with A&W Root Beer and A&W Cream Soda, then 7UP, Orange and Grape Crush. Last year, they launched a mix of our trademarks called Soda Pop Shoppe in bags, bottles and gift tins. This is a perfect example of innovation over a 20-year time frame," says Peyton.
Ross Misher, chief executive officer of Brand Central, which represents Dr Pepper Snapple Group, as well as Kellogg's, Keebler and others, notes, "The success of food licensing has positioned the category for continued growth over the next few years. Food manufacturers are becoming increasingly aware of the positive impact that licensing can have on their business when they are looking to expand into new categories, improve upon or expand their existing offering or developing exclusive SKUs for retailers."
The Rice Krispies treats cookbook, from publisher Weldon Owen, featuring 40 kitchen-tested recipes just launched at booksellers.
Some food licenses come with particular advantages. Aviva Rosenthal, partner at Act III Licensing, says that when the company began representing the Sunkist brand, it had to honor its traditions, but recognized that significant elements of those traditions could translate effectively into the licensing operation. The Sunkist name and logo recalls freshness and wholesomeness and will be the centerpiece for some programs, including branded kitchenware. Indeed the logos themselves have history and Act III plans to use '70s-era logos.
Sunkist also comes into its licensing program with a 100-year history of orange crate art generated by the growers who make up the cooperative. Although some of the art, often elaborate and celebrated, has appeared on products before, Act III is planning to develop a comprehensive program that reflects its true value, planning to divide the program between more everyday, mass-market applications for the logos and more upscale, mid-tier and specialty applications for the crate art. "The art offers a retro California look. In apparel, we will have men's, women's and children's—all based on retro food crate art," says Rosenthal.