Food licensing explores retail

Food and beverage licensing prevails in distribution channels as diverse as casinos, fashion retailers, toy stores, and drug stores taking food and beverage licensing to entirely new retail locations. This can be agreed upon by looking at the ability of the food brands to transcend their core business and being able to develop a great connectivity with the fans in new product categories which claim to get stronger each year. Food and beverage brand licensing is a proven business abroad with United States boasting of a $6.65 billion business in the category.

International scenario: Leveraging a licensing opportunity

It would be interesting to share that there are prepared meals and snacks that have branded with popular chains like Burger King, TGI Friday’s and California Pizza Kitchen which are sold in supermarkets, club stores, c-stores (convenience stores) and even vending machines. This explains that the brand helps sell and connect with the end user without restricting the chain’s offerings to select outlets. New partnerships in food licensing also include an alliance between General Mills and apparel retailer Steve & Barry’s to sell clothing with food brand characters such as the Pillsbury Dough Boy, Jolly Green Giant and Lucky Charms leprechaun. There is also Jelly Belly’s deal with The Licensing Co. to produce merchandise through multiple vendors.

However, the recent downturn in the economy has made some chains reluctant to rush into brand licensing and they now possess wishful thinking hoping that retail versions of their menu will translate into return visits when times improve. Simply slapping a brand logo cannot be the sole driving force to tempt the consumer to try a new product. The right equation can be achieved when apart from the brand, it offers a tasteful meal experience thereby ‘drawing the consumer closer to the brand’ which forms the very basis of brand licensing.

India calling: Significant Indian initiatives

The concept of food licensing is gradually picking up in India and the sector is experiencing immense exploration while gaining ground. License India, a licensing consultancy firm and a part of Franchise India Holdings, is playing the pioneer role in introducing it as the unique business strategy that holds a promising future. Recently, License India has sealed a licensing deal with Mr. Harbhajan Singh, the popular offspin bowler of the Indian cricket team. Among other merchandise offerings the deal would include Mr Singh endorsing his name to an eating outlet called “Bhajji Da Dhaba” thereby adding to its brand value. The details however are yet to be finalized.

Another recent venture has been the Manchester United Football Club, one of the world’s richest sports clubs which has lent its name to Manchester United Food and Beverage (Asia) Pte Ltd (MUFB) to own, operate, franchise and develop a chain of Manchester United restaurants & bar concept in Asia Pacific region through a licensing deal. Mumbai is to have the very Man Utd restaurant this Diwali. The project was envisaged and conceptualized by Total Sports Asia (TSA), Asia’s leading sports marketing firm. This venture marks Manchester United’s first foray into India in terms of branded cafes and restaurants.

Mr Vishal Jaison, Associate Director - Sales & Business Development, Indian Subcontinent, Total Sports Asia, says, “With over 20 million Manchester United fans in India and a burgeoning football landscape, these cafes, restaurants and bars will bring the brand closer to consumers like never before. With a growing fascination for European football clubs among Indians, there is a huge demand in the market. India has never had anything along the lines of a branded football café and with the biggest football club setting up shop in the form of cafes and restaurants, there is no reason why Indians wouldn’t love the concept. These cafes will be a trendy mix of fine dining, live telecast of sports events and entertainment. Apart from this, there will be Man Utd memorabilia on display.”

Partnering innovate products with the right brands

There are a variety of licensing options available to food and beverage brands in order to make licensing a good fit for brand strategy.

Food to Food: This option tends to be the most lucrative because of the volume of potential consumable food products and the profitability involved. It also helps the licensor’s own business by extending the flavour of an existing food product into closely related food categories. However, a brand owner must be cautious enough to avoid cannibalising his/her existing business.

Food to Non-Food : The licensed products in this category would eventually help in reinforcing a brand’s dominance in its category. For example, a brand gains a real boost if people are willing to flaunt it on their clothes, or better if a celebrity is spotted sporting a t-shirt emblazoned with the brand. For instance, a photograph of Kevin Federline, wearing a Kraft Macaroni & Cheese t-shirt was published in In Touch magazine.

Non-Food to Food : This option is especially popular with kid’s brands, where character-based products offer relevant examples here such as Walt Disney which has brought Mickey Mouse range of chocolates with Leonidas in India or internationally happening Care Bears Fruit Snacks, Pebbles cereal, Nickelodeons’ Nicktrition messages and Scooby Snack dog treats.

Growing trends towards licensing!

Grocery manufacturers are open to the idea of licensing restaurant brands as it offers to be cheaper and faster to rent the equity in a well-known name than to create a new brand from scratch. Grocers understand the consumers’ mindset and they are more likely to pick up a brand which they like rather than the one which they are not very familiar with. Retailers have embraced restaurant-branded foods because shoppers are keen to feel the restaurant experience at home.

The uncertainty of the retail marketplace demands that most chains should either contract with a licensing agency or hire someone with licensing experience. With so many brands trying to enter the retail grocery market, a shake-out can be expected with the supermarkets shifting their priority to store brands. In order to offer a unique memorable experience, it is necessary to look beyond the brand and deep into the fundamentals of the entire culinary experience.