Driving Growth: BAC on Food and Beverage Brand Extension Strategies

License Global speaks with Michelle McLaughlin, chief executive officer, Brand Activation Consulting (BAC), to explore the power of food and beverage and the best-in-class strategies bringing the brands we love to life.

Ben Roberts, Content Director

May 14, 2024

6 Min Read
Michelle McLaughlin, Brand Activation Consulting (BAC)
Michelle McLaughlinBrand Activation Consulting (BAC)

Can you discuss the expanding licensing landscape in the food and beverage industry and how this evolution impacts agents today?

The emotional connection consumers have with their favorite brands is a powerful force cultivated over years of effective advertising and brand messaging. This connection makes consumers more open to trying licensed products with familiar logos or flavors, reducing the need for extensive marketing efforts and allowing brands to focus more on innovation and quality.

Additionally, the trusted brand identities and distinct flavor profiles of food and beverage brands create an immediate understanding with consumers. This familiarity streamlines marketing efforts and enhances brand loyalty, as consumers are more likely to stick with what they know and love.

The evergreen nature of food and beverage brands further adds to their appeal as licensing opportunities. Unlike entertainment properties, which may experience fluctuations in popularity, food and beverage brands tend to maintain their relevance over time. This reliability makes them attractive investments for brands looking to expand their reach through licensing agreements.

As a result, the growth of food and beverage licensing is reshaping how brands plan and strategize for the future. Traditionally, consumer product revenue and marketing impressions were the primary metrics for success. However, with the increasing importance of licensing, brands now need to consider how these programs can help them reach new audiences and contribute to overall brand valuation.

Overall, the expansion of licensing in the food and beverage industry presents exciting opportunities for agencies to assist brands in leveraging their equity and expanding into new markets. By tapping into consumers’ emotional connections and trusted flavor profiles, brands can enhance their value and reach a broader audience through strategic licensing agreements.

What do you identify as the primary trends driving the food and beverage licensing market, and how do these trends influence the strategies you employ for your clients?

The primary trends driving the food and beverage licensing market include:

1. Nostalgia Factor Many major food brands leverage nostalgia as a key factor, appealing to multiple generations while remaining relevant to younger audiences. Brands like Hershey’s exemplify this by maintaining their classic heritage appeal while generating relevance with younger audiences via new and consistent marketing campaigns. This approach attracts consumers who grew up with the brand and new “kidult” audiences.

2. Seasonal Merchandise Licensing There’s a rising trend in seasonal merchandise licensing, particularly with confection brands. Confection brands hold a unique leadership position in the seasonal space, translating to general merchandise and food gifting beyond the core confection. PEEPS marshmallow confections demonstrate this trend, capitalizing on the leadership position in non-chocolate confections and its iconic character to dominate the space with consumer products and confections during the Easter period.

3. Expansion of Tried-and-True Flavor Profiles Beloved brands are expanding in their core consumption occasions by leveraging their tried-and-true flavor profiles. For instance, Skippy Peanut Butter’s consumption during breakfast and protein shakes led to the success of Ryse x Skippy Protein Powder and Skippy Breakfast bars.

4. Unique Flavor Mash-Ups Limited-time offers (LTOs) featuring unique and unexpected flavor combinations generate buzz, secure incremental retail space and attract new audiences. Both branded and unbranded flavor LTOs have been successful across the industry. Major brands like OREO, Pringles, and Van Holten’s have been leveraging this strategy for years. This strategy is also being implemented in unexpected categories, such as bacon. Hormel Black Label Bacon-flavor LTO’s success led to a series of new LTOs coming to the market.

Agencies can capitalize on these trends by developing licensing strategies that align with consumer preferences and market dynamics, helping their clients maximize brand value and reach new audiences.

As BAC, how have you expanded your portfolio to onboard new clients, particularly in the food and beverage realm, and introduce their products to the market?

At BAC, our approach to expanding our portfolio in the food and beverage industry has been all about strategy, customization and long-term success. First off, we take a boutique approach. We keep our portfolio tight, focusing on brands that resonate with consumers. It’s all about finding those gems with strong emotional connections and distinctive flavor profiles. By tailoring our strategies to each client’s specific needs and brand identity, we ensure our partnerships hit home with consumers. We’re not about rushing things. Unlike a license factory, we prioritize quality over quantity. We take our time to develop comprehensive strategies in collaboration with our licensors. This patient approach allows us to cultivate each brand’s presence in the market carefully, ensuring long-term success for everyone involved.

One key to our success has been our strategic retail partnerships. We work closely with retailers to ensure our clients are represented by preferred vendors as licensees and fill gaps at retail. It’s been a win-win situation, driving success across all the food and beverage brands in our portfolio.

Speaking of success, we’ve had some pretty big wins. Take PEEPS, for example. Since we took on the business in 2016, they’ve experienced nine consecutive years of growth, securing major annual sections across all major retail channels, including 32 feet at Walmart in 2024. And let’s not forget about The Hershey Company’s general merchandise program, which we’ve managed since 2020. It’s achieved record-breaking general merchandise revenue and is gaining major retail section traction.

But we’re not stopping there. We’ve got big plans for the future. We’ve already launched two successful programs for Hormel Foods Skippy Peanut Butter, and now we’re gearing up with Planters, Hormel Chili and SPAM program launches planned for 2024 and 2025.

In your interactions with major F&B brands like Hormel Foods, where do you observe the most significant shifts in activity when brands are looking to expand into new markets and connect with diverse audiences?

When it comes to major F&B brands like Hormel Foods, we’ve noticed some significant changes in their approach to breaking into new markets and appealing to diverse audiences.

Hormel Foods has really embraced the idea of licensing, especially after seeing the success of the Skippy program. They’re expanding their horizons by bringing in other big brands like Hormel Chili, Planters and SPAM, as well as inbound licensing. It’s a clear sign that they’re serious about broadening their reach through licensing across the board.

They like BAC’s strategic and calculated approach, which aligns with its mission. They pay close attention to consumer preferences and trends, shaping their products and market accordingly. It’s all about creating offerings that really resonate with different audiences and foster loyalty.

Lastly, when we collaborate with Hormel Foods, it feels like we’re part of the same team. They trust us to represent their brand effectively, and we work closely together to ensure success.

Brand Activation Consulting will be exhibiting at Licensing Expo in Las Vegas (May 21-23) at booth C154.

Register for Licensing Expo 2024.

About the Author(s)

Ben Roberts

Content Director, License Global

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