Balancing Licensing with Own-brand Assets on Food & Drink Packaging

By: Bobby Patel

Utilizing licensing on product packaging has risen in popularity within the food and drink industry. The main reason for this surge? The instant recognition of well-known licensed characters and the familiarity them, rewarding the new product and brand. The licensing industry is bigger than ever these days and drives hugely powerful brand recognition.

Overwhelmed shoppers will often be attracted to license assets on a packaging because they are accustomed to them. According to Ted Mininni, President of Design Force Inc, in order for a customer to be triggered to commit to a purchase they must feel engaged by the product. Shoppers equate characters with specific traits, values and stories—and when these are successfully carried through to the packaging bringing it to life, the customer will feel compelled to buy. In fact, the Licensing Industry Merchandisers’ Association (LIMA) reported the licensing industry generated $241.5 billion in retail sales globally in 2014.

New products on the supermarket shelves commonly get overlooked by consumers because many find appeal in what they already know. An emerging brand just starting out will therefore benefit greatly from the addition of popular character licensing to their portfolio because it will give more appeal and quicker sales—this is particularly the case within the kids’ market where children are drawn to beloved characters they are surrounded with day to day on television, in apps or in toys. Disney is one such brand that has proved successful across all retail categories, from media and apparel to the food and drinks sector. Disney's 2013 hit “Frozen” grossed $1.3 billion at the box office, and went on to continue capitalising on the “Frozen effect” with numerous licensed goods which raked in a whopping $107.2 billion in retail sales. The category also accounted for 46% of the total $13.4 billion in royalties from licensed merchandise.

Other positives of investing in a license include benefiting from cross-promotion opportunities with other same licensed suppliers and on-going support from the licensors themselves to boost growth into new markets. Plus, it’s usually easier to be listed by large retailers since they'll have more confidence in introducing key licensed products when they are a part of a larger store-wide merchandise plan. The licensors will in return benefit from the partnership because they will reap the rewards of gaining a presence in previously unexplored or unfamiliar territory. Success stories of firms making the most of their brand by issuing licenses include Finnish firm Rovio, which created the Angry Birds app. About 40 percent of its £125million (over $164million) turnover comes from licensing. Ultimately, the addition of a license that fits in with the product, and shares the brand’s own values will speed up growth and offer longevity.

With all this in mind, food and drink manufacturers then face the dilemma of how to balance their own brand assets with the adopted licensing. The most efficient way to grow the master brand and retain a strong brand message is consistency—the brand may collaborate with various different licenses, but the branding has to remain the same throughout the product portfolio. It is the consistent, desired experience that builds trust, and trust is the foundation for customer loyalty and promotion. Richard Branson, a brand name himself, has built a multi-billion dollar conglomerate around his values of risk-taking and adventure. People expect the unexpected from him, but he remains consistent in delivering a customer-centric, aesthetically pleasing, mega-cool experience no matter the venture.

The use of advertising banners, point of sale marketing and the packaging itself needs to be consistently uniform, dependable and unchanging—similar colours for the whole range, with recognisable logo and positive message throughout. In British startup company Appy Food & Drinks’ case, the brand’s ID is emphasised through the use of very soft and inviting rounded fonts which are friendly and suitable for the targeted market. The product’s benefits and ingredient attributes cannot take second place to the licensing or branding, as the customer needs to be made aware of what they are purchasing—and most importantly why they should be purchasing it over other competitors’ offerings. With Appy Food & Drinks’ product range, the packaging always features real fruits on the front and back of the packaging to help the customer to identify the product as healthy. The colour green, globally associated with nature, takes priority and emphasises the wholesome aspect of the product which is at the core of what the brand stands for: no GMOs, preservatives or chemicals.

Graphically, the overall design should resonate with the license and never conflict with it. In Appy’s case, because the drink is targeted to children, the message has to be clear and simple so kids (as well as parents) can understand what the product is right away. Consumers make purchase decisions within seconds, so the information needs to be direct and easy to grasp. As the license characters dominate the front of the packaging, the creative team focused on placing the own-brand assets on the rest of the pack, including the brand’s own engaging characters, games and apps. These direct customers to the brand’s website—rather than the licensors’—which help with on-going brand expansion and long term recognition.

Overall, as in Appy Food & Drink’s case, if carefully planned and thought out it is possible to achieve a very successful licensing and own-brand collaboration. When done well, it has the potential to be appealing to consumers, beneficial to the licensors and profitable for the brand.

Images courtesy of Appy Food & Drinks.

Bobby PatelBobby Patel is the founder and CEO of multi-award winning British FMCG company Appy Food & Drinks. His main drive remains ‘people before profit’ and his continued commitment sees him passionately working to create new innovations that will help global communities, and leave a legacy for healthier generations.