Private Label Push

Private label opportunities are growing for licensors and to facilitate partnerships that can build on the trend, the Private Label Manufacturers Association's 2008 convention in Chicago, running from Nov. 16 to 18, will

April 6, 2018

5 Min Read

Private label opportunities are growing for licensors and to facilitate partnerships that can build on the trend, the Private Label Manufacturers Association's 2008 convention in Chicago, running from Nov. 16 to 18, will feature a Licensing Pavilion where own-brand decision makers from leading retailers and wholesalers can explore rapidly evolving opportunities. In addition, licensing companies can familiarize retailers and their suppliers with critical properties and do some exploring of their own, particularly in sectors such as food and consumables where licensed products have established a strong presence. i1_481.jpg

The Licensing Company, for example, will focus on its Lysol, Jim Beam, Jelly Belly, Airwick, Bic, Malibu, Kalhua and related properties that could be attractive to a range of retailers, including supermarket operators who haven't been deeply involved in licensing previously, even with national brands.

Angela Farrugia, managing director, noted that TLC's "biggest areas of growth are in the food and beverage arena. Private label relationships are an important part of the licensing mix," Farrugia said. "Particularly in the food and beverage space, we have been able to create some innovative relationships with retailers and buyers who would never normally be offered brand licensing opportunities in their departments." i2_37.gifi2_t_37.gif

PLMA president Brian Sharoff said the Licensing Pavilion establishes a convenient place for retailers and licensing companies to meet and discuss options. The face-to-face advantage offered is important because licensing is an option that works better for some retailers than others. Food retailers particularly will look at the property mix and go-to-market strategy to determine if and how to capitalize on private label. Having expert advice on hand can help retailers attending the show weigh how they might affect a private label strategy. "It provides an opportunity to the two sides," Sharoff said. "Retailers get to talk to a lot of licensing people in one place at one time. Licensing companies can really find out what retailers are thinking."

Licensing companies also can articulate the advantages they offer. TLC's Farrugia asserted that licensing provides retailers the ability to target specific demographics more efficiently, create theater and excitement for customers and develop a good/better/best strategy that uses preferred vendors. In other words, properly executed licensing strategies help retailers build on the strength of their private label programs while reaching out to customers in a more creative, impelling manner.

MODA International Marketing is targeting two promotions for its PLMA Licensing Pavilion participation—Henry's Garage in the car care/automotive accessories category and Greenfield Village in the food and beverage category.

Executives at MODA have found a growing understanding of licensing's value at PLMA, represented by PLMA's commitment to a segment-specific pavilion, and among vendors and retailers aware of initiatives at Costco, Kroger and Safeway, among others.

Michelle Alfandari, MODA's president, says, "We definitely see licensing as a means for retailers and vendors to fast-track market acceptance with brands that will resonate with the consumer."

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As well as specific licenses, MODA has specific goals for PLMA. "For MODA and the brands we are representing at PLMA, we are targeting two potential partnerships," said Alfandari. "One is licensing as a private label that will be exclusive to a retailer, and the other is exclusivity to a vendor who may distribute in multiple retail channels or choose to sell exclusively to one retailer."

Alfandari said MODA sees both as viable strategies and any preference will depend on what will deliver the best opportunity and longest-term ROI to its client and the licensee. Moreover, the licenses that MODA is offering, because they aren't popular entertainment properties, offer a degree of flexibility in their positioning. "For example, many private label vendors are seeking some leverage with retailers by having a 'brand' and many retailers are seeking ways and means to drive traffic to their stores and generate incremental sales and loyalty from their customers. The right brand can deliver this more quickly and effectively than building a brand from the ground up," says Alfandari.

Licensing can build momentum in a successful private label program, Alfandari notes. "Many well-established private label brands are now considered national brands. Think of Kenmore, Kirkland, Archer Farms. Most recently, Safeway developed O Organics, which is now sold in other non-competing supermarkets. That said, for the most part, those brands have been establishing a presence and brand 'trust' in the marketplace for a very long time and/or at great cost. Retailers may not have the luxury of building their own private label brands over a long period of time and licensing an existing brand may fast track consumer acceptance."

Participation in the PLMA Licensing Pavilion allows Nancy Bailey & Associates to point out the several benefits of licensing to the private label sector, president Nell Roney says, such as bringing an immediately recognizable identity to a particular product, expanding the offering within a category while providing the consumer a choice and increasing manufacturer and retailer margins. She adds that, on the retail side, licensing heralds "new news" in a category while, on the manufacturer's side, it provides for expansion of the product portfolio and maximization of manufacturing facilities.

Establishing relationships between licensing companies, private label manufacturers and retailers has significant advantages, Roney said.

"Many of our brands offer credible points of difference and instant recognition that private label products cannot," she says. "As retailers continue to consolidate and shrink their vendor bases, their private label manufacturers may have some advantages and a reason for being that other suppliers might not."

For additional coverage of PLMA, visit www.licensemag.com.

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