In today’s market, consumers have more choices than ever, with innovative new products landing on shelves every week. Time constraints on shoppers in addition to the proliferation of choice means that stand out is everything. So, how do manufacturers cut through the noise and create products that stand out and excite consumers?
As part of a route to market strategy, a high-potential growth opportunity is to leverage partnerships with established brands, building on their strong saliency and recognisability with consumers. By integrating licensing with their products, manufacturers create a dynamic portfolio that aligns with market trends and offers exclusivity and familiarity. Food and beverage is also one of the fastest-growing sectors within the brand licensing industry, worth more than £58 billion according to the 2024 Global Licensing Industry Survey.
Culture
Engaging in licensed partnerships enables manufacturers to unlock new avenues for innovation, by introducing products that combine the appeal of established brands with current trends and unlocking exciting new flavour combinations. This strategy not only enhances product visibility but also ensures a competitive edge in crowded markets.
Guinness’ recent fashion collaborations with eponymous brands like Primark and sports fashion brand, Art of Football, demonstrates relevancy and enables Guinness to show up in an alternative category, driving penetration and brand equity. Baileys Original Irish Cream, the number one loved spirits brand according to Kantar, has an expansive licensed product range in the treat category, extending beyond their traditional liqueur category, with the Euromonitor data showing that the brand sells 4 million licensed products a year.
By tapping into existing brand saliency, leveraging the emotional connections and trust associated with iconic names, manufacturers can craft offerings that resonate with consumers.
Cost
As seen in the latest Food & Drink Federation State of Industry Report, manufacturers are having to scale back growth plans as costs have increased by up to 10%. However, the benefit of licensing is that the saliency of both the product itself and the trademarked brand ensures high levels of awareness and standout.
By partnering with existing hero brands, new and relevant products can get to market quickly, taking advantage of trends or cultural moments, without the need for new kit or a new process. It means manufacturers can explore a growth strategy into new areas and diversify their portfolio with minimal risk – and at the same time, delight new or potential customers with innovative products that also strengthen their brand equity and revenue.
Collaboration
Licensed products of known and loved brands have proven themselves as powerful connectors to both existing and new consumers – consumers mentally shortcut to the taste through brand queues and the presence of it alongside an unexpected product in a new category, which further drives consumer intrigue. Diageo’s powerfully distinctive, purposeful brands and iconic markings are highly valuable especially within the context of Licensing. Take Baileys and its partnership with Grind, combining experiential coffee-flavoured cocktails and retail sales of coffee pods; two established brands benefitting from the others consumer base.
Stepping out of traditional categories into new ones is a great opportunity to drive growth. Seasonal exclusives and limited-edition collaborations can also help create new memory structures for consumers and drive sales during key trading periods.
In a noisy and competitive market, the right collaborations give manufacturers the opportunity to develop creative products under dual branded partnerships and help brands extend their reach into new segments, driving innovation and growth across categories.
Adult treating
Despite current living costs, consumers continue to seek moments of indulgence in food and drink, and want to treat themselves to small, accessible products.
The global treating category is expected to be worth $479 billion in 2027 according to Euromonitor, and within that the adult treating market (for those 18+) is thriving – Kantar data from October 2023 revealed there were 4.5 billion digital searches for treats, which tells us that consumers are regularly seeking out indulgent moments.
Four key trends - coffee, chocolate, cake, and ice cream - will continue to drive growth in Adult Treating. At £6.8 billion, chocolate is the biggest treat category, with ice cream being the fastest growing according to the Euromonitor Diageo Market Report from November 2023. Meanwhile, coffee is a flavour that is set to percolate in all areas – currently worth over £2 billion in retail sales and forecast to grow at 1.3% per year.
Licensing supercharges the opportunity for Baileys brand’s adult treating agenda and provides the No.1 most loved spirits brand saliency in indulgent moments all year round.
Under licence, manufacturers can take iconic brand flavours and adapt with favourite formats – Baileys recently launched Baileys flavoured popcorn with Joe & Seph’s, and last year, expanded the partnership with Arla to launch Baileys Squirty Whipped Cream, taking coffee-flavour and blending festive with premium and convenient, to drive growth.
Final words
Combining trust, excitement, and emotional pull, branded licensed products offer innovative ways for manufacturers – and their customers – to stay culturally relevant, differentiate their range, and drive profitable growth.
Licensing also serves as a powerful tool for fostering collaboration between brands and manufacturers. By staying close to trends, embracing innovation, and working with high profile brands to bring products to life in-store, manufacturers can turn branded licensing into a year-round growth driver for everyone.
