Meet the pied piper of consumer products at Mattel, Mr. Permendra Singh

permendra-singh-mattel-india

We caught up with Mr. Permendra Singh aka Param – Head, Consumer products, Mattel India at his very swanky (and funky) office in the hip-side of Bandra East! If you love your Hotwheels (who doesn’t?), scrabble or Barbie – then this place is nothing short of “heaven” – but duty calls and we get down to discussing the business of licensing.

 

For a radio like experience you can listen to the conversation at the bottom of the page or have a read!

 

ILP:You have worn many different hats throughout your career,with a strong background in retail &sales. Was joining Mattel a natural progression, how has the journey been thus far?

 

Param:My experience has primarily been in Sales Management & Marketing before I got introduced to Disney – the licensing world is beautiful & you generate business by collaborating & influencing the right partners. The business model gives one a lot of flexibility & allows to explore multiple categories. You can only be limited by your ambition to grow. Mattel boasts of the iconic brands like Barbie, Hot Wheels, Fisher Price – in today’s age every brand is looking at ways to engage with their consumers & here the brands are built purely on engagement. Hence, working at Mattel becomes a perfect fit for me.

 

ILP:You have possibly 2 of the most iconic brands in the kid’s space – Barbie and Hot Wheels. How does this play out in the licensing space where you’re up against the biggies?

 

Parambarbie-products-mattel-india:As mentioned the challenge for most of the brands today is the engagement & here are the Mattel Brands – Barbie, Hot Wheels & Fisher Price that are built primarily on the engagement apart from the content. The way the consumer engages or plays with Hot Wheels Car or the Barbie Doll makes the brand an integral part of the play & learn journey for the child & hence these brands are iconic. In fact, given the neutral retail environment these brands literally tower over the rest Licensing brands & hence we see an untapped market with a strong growth forecast in key categories.

 

ILP:What are the key tick marks you must have in place before bringing in a new licensee on board?

Param: OK, so this is something like what is the perfect recipie to a butter chicken. Slightly tough one to answer but there are some basic principles to making the Licensing partnership successful & the key aspects to the Licensee includes:

 

  1. Passion & belief in the Franchises that the Licensee wants to work upon.
  2. Category Expertise.
  3. Make Licensing a part of their long-term strategy.
  4. Transparency & open to feedback.
  5. Nimble & Proactive Approach to scenarios.
  6. Financial Discipline.

 

 

ILP:How has the proliferation of digital devices and high-speed broadband impacted Mattel in India and overseas?Has it helped acquire new consumers on the content front?

 

Param: The country is presently seeing a rapid growth in terms of digital content consumption and users are today able to seamlessly experience the content they love to watch. All of this has been made possible due to affordability of smartphones and cheap data rates being available.

 

As a company, we believe that storytelling becomes a cornerstone in our approach to connect with kids and parents. We have achieved this by providing a rich selection of content to connect with kids via leading OTT platforms such Youtube Kids, Netflix, Amazon Prime and Voot. Outside of OTT platforms, we also have an established social media presence by which we engage with parents and fans daily. We are presently undergoing a revolutionary change in the way kids/parents consume digital content where it becomes imperative for us to build our business around them by delivering a narrative that resonates with them.

 

ILP:How has the growth of E-commerce impacted the licensing business for Mattel in India?

Param: If we look at the last 5 years, ecommerce has seen an incredible growth rate of internet penetration in the country which in turn has also led to a fast-growing online shopper’s community. In 2016, the e-commerce market comprised of only 2% of the overall retail market which is expected to grow to 12% by 2026, as stated in the Morgan Stanley report titled – India’s Digital Leap.

hot-wheels-products-mattel-indiaAt Mattel, we see this growth as an opportunity to scale up our business by offering a seamless omnichannel experience to our customers to shop what they want and when they want. More importantly, the channel helps us to overcome distribution challenges that existed earlier and today we can connect with our customers across the country.

Over the past year, we have invested heavily in strengthening our e-commerce partnerships. We launched exclusive stores for our brands – Barbie, Fisher-Price and Hot Wheels on platforms like Amazon, Flipkart and Firstcry. We recently also initiated an occasion led shopping event with Flipkart on Barbie’s birthday in March. Moving forward, we will continue to invest in this channel to reach out to our consumers more efficiently.

 

ILP:With the growth in private labels, do you see Direct to Retail also growing as a business proposition and in helping retail drive value?

Param:Yes the private label will grow primarily in organized retail including E-commerce. With low net margins for retailers worldwide the focus on private label to improve the realisations is natural. We have seen certain private label brands growing tremendously in last 10 years & the same will continue provided they are focused in their offering & in line with what consumer is seeking.

Licensing has gained & grown a lot as part of the private label by key retailers.

 

ILP:Any key learnings you would like to share as a licensor of some of the biggest and well-known brands in the market?

Param:Licensing is all about believing in the partnership & being completely committed to it – the key cornerstone for the business is the trust between the Licensee & Licensor. The relationship needs to involve positive push to each-other to build the business. The framework & success matrix needs to be clearly defined & worked upon. If there is passion & commitment the journey is fun & results are always there for others to notice as a case-study of what went well.Its all about making it successful on these.

 

ILP:What do you feel is lacking in the Indian licensing eco-system which could bring about a watershed of change and progress?

Param:The way we build the partnership – Licensee & Licensor needs to be a lot more engaging & needs a stronger collaborative approach. They need to move & build business like a Tribe.

The key area is the engagement or consumption of content is far leading the consumption of consumer products & need to be tapped at the right pace. The eight-year old inTiripur orTezpur have quite a similar urge to owning the Barbie T-Shirt as the eight-year old in Mumbai & hence distribution is the key driver going forward.

 

ILP:Mattel does a lot of CSR work in the US especially around the ‘Power of Play’. Are we likely to see such initiatives in India as well?

Param: Mattel is a creations company that inspires the wonder of childhood and one of our core beliefs lies in the value of play. According to American Academy of Pediatrics, Play is essential to development because it contributes to the cognitive, physical, social, and emotional well-being of children and youth. Play also offers an ideal opportunity for parents to engage with their children and we have been making concerted efforts to educate parents about the underlying benefits of play with toys. It is our mission to be the recognized leader in play, learning and development not just in India but across the world as well. We are extremely committed to investing in product development and, thus, focus heavily on R&D to solve fundamental problems that parents face with baby products and child development. It is our constant endeavor to not only keep the child engaged but also make life easier for the parents by providing best-in-class, safe and quality toys that aid in the be overall growth and development of the child. We are committed to bringing this thought alive through all our initiatives – be it engagement with parents or through our product development. Through the Mattel Children’s Foundation, we have awarded a grant of INR 15 Lakhs to launch Project Udaan under the aegis of Barbie, in association with Masoom, an NGO that offers quality education in night schools for girls from marginalized sections of society. This was in line with Barbie’s philosophy of ‘You Can Be Anything’ and the program was 3-fold that focused on leadership skills, feminine hygiene program and vocational training.

 

ILP:What advise would you give to young professionals starting out in the licensing business?

Param:It is a model that offers great flexibility & you can marry the basic principles of Sales & Marketing to build large businesses. This is a fast-growing business & primarily driven by Franchisees that connect emotionally to the consumers. The business also feeds continuously upon the Consumer Products to build the brand with so-many touch-points. The key principles are passion in the brand & collaborative approach to building large partnerships.

It brings immense possibilities & sky can be the limit in terms of the revenue that one can target. Companies are now making Licensing as part of their long-term strategy & you can have a fascinating career with good career progression. The cross-category mix adds a lot to the learning as an individual.

 

 

To read more such interviews check our Interviews section and for expert opinions check the Open Mic section.

For feedback please write to us at indialicensingpost@gmail.com!

LICENSING EXPO UNVEILS ROBUST SPORTS LINEUP

licensing-expo-2018-las-vegas

NORTH AMERICA–Licensing Expo has revealed that it will feature some of the world’s leading professional sports associations and several sports-focused agencies during this year’s event.

Sports licensing has experienced significant growth in the last decade and in 2016, retail sales of licensed sports properties grew to $25.3 billion, a 2 percent increase year-over-year, according to LIMA’s 2017 Global Licensing Industry Survey.

As licensed sports and athlete properties continue to experience year-over-year growth, participation in Licensing Expo will also provide athletes with opportunities to generate revenue by using their likeness for products and services–solidifying their personal brand outside of their respective field of play.

Key players associations exhibiting at Licensing Expo 2018 include the Major League Baseball Players Association) and the National Football League Players Association. Also bolstering the sports category are industry leading licensors and licensing agents including Brandgenuity, Dorna Sports, Edge Americas Sports, IMG Licensing, Learfield Licensing Partners, One Entertainment and REP Worldwide, among others. These leading licensing agents represent a variety of sports properties and brands including:

  • 24h Le Mans
  • C. Milan
  • S. Roma
  • FC Bayern Munich
  • Club Deportivo Guadalajara
  • Club América
  • Cruz Azul Fútbol Club, A.C.
  • DFB
  • Fútbol Club Barcelona
  • Inter Milan
  • Juventus Football Club
  • KNVB
  • MotoGP
  • Lucha Libre Racing
  • Paris Saint-Germain Football Club
  • Real Madrid Club de Fútbol
  • Rugby World Cup
  • The Open
  • Tough Mudder
  • UFC
  • U.S. Women’s National Team Players Association
  • Wimbledon
  • World Boxing Council
  • Women’s National Basketball Players Association
  • World Poker Tour
  • World’s Strongest Man

“The NFLPA is proud to once again exhibit at Licensing Expo, which has proven to be one of the best annual opportunities to build new extensions for the NFL player group licensing program,” says Steve Scebelo, president, licensing and business development, NFLPA. “We are thrilled to be representing players from the US Women’s National Team and Women’s National Basketball Association, as partners in REP Worldwide, a new licensing representation business launched late last year. The presence of these player group licensing programs at Licensing Expo 2018 allows us to build and grow new licensed merchandise programs for women athletes, in the same manner we have been doing for NFL players for the past 25 years.”

Licensing Expo takes place May 22-24, at the Mandalay Bay Convention Center in Las Vegas, Nev. For more information and to register, click here.

MERCH BY AMAZON RESHAPES LICENSING

Amazon-partners-with-KOTRA

Merch by Amazon is reshaping how brands do business, offering a one-stop-shop for products that allows licensors, licensees and content creators more flexibility than ever before.

There’s absolutely no question—Amazon is changing everything.

From the way customers shop to the quality of product expected, speed of delivery and convenience factor, Amazon has grown to become one of the largest and most influential online retailers in recent memory.

According to the International Licensing Industry Merchandisers’ Association’s 2017 Annual Global Licensing Industry Survey, online sales accounted for 21 percent of all licensed retail sales worldwide in 2016. But that is just an average, with variants around the globe. When you drill down by region, the U.S., for example, booked 28 percent of sales online, whereas in China, a staggering 41 percent are via e-commerce.

It is without a doubt that Amazon, with its hundreds of millions of customers, has cracked the e-commerce code.

And the online retailing giant has another tool in its offering that is poised to further change how licensors, licensees and content creators in particular garner sales—Merch by Amazon.

Merch by Amazon is a print-on-demand service fully operated, from beginning to end, by Amazon–they manufacture, sell and ship all product using Fulfillment by Amazon, which gives Prime members free two-day shipping, among other benefits.

“A good way to look at [Merch by Amazon] is this: we provide a full supply chain without you needing to have supply chain management,” says Miguel Roque, director, Merch by Amazon.

Merch by Amazon makes it easy for licensors, licensees and content creators to create, promote and sell branded merchandise without risk and without any up-front costs.

And it’s not to be confused with the Amazon Marketplace.

“Merch by Amazon differs from the Amazon Marketplace because brands don’t need to manufacture or own any physical inventory, rather they rely on Amazon’s inventory and accumulate royalties for every product sold,” says Roque. “We essentially take a physical product, make it digital and then make it physical when a customer buys it. These products are shipped with Prime, and of course carry the customer service promise that comes with Amazon.”

Launched just under three years ago as a service for app developers with the goal to further support them on Amazon by providing a way to get merchandise into the hands fans, the online retailer quickly began to see additional opportunity.

“We noticed that many app developers have a few things in common: a fan base, creativity and design skills and no easy or natural path to get their own branded merchandise into the hands of fans,” says Roque. “With that in mind, we developed Merch by Amazon to help developers increase revenue through the sale of branded merchandise designed by them and produced, sold and shipped by Amazon.”

It was immediately apparent to the company and its sellers that there was gold in the service.

“Merch by Amazon officially launched in 2015 and immediately took off,” says Roque. “In fact, 10 days after launch, we shut down the application process due to an overwhelming response from designers, brands and customers. We stepped back and recalculated what it was going to take to meet customer and seller expectations, then refined our process and infrastructure requirements.”

Merch by Amazon is an invite-only model now.

“We use the invite-only structure for a couple of reasons,” says Roque. “First, it helps us maintain high standards on behalf of Amazon customers looking to buy branded products. Secondly, it allows us to regulate the amount of sellers joining the platform. Finally, it is important to ensure our capacity meets demand so that we have happy brands and happy customers.”

Merch by Amazon works like this: the online retailer makes available pre-defined goods which licensors, licensees or content creators can choose from and then transfer their designs to. Currently, offerings include two types of t-shirts, long sleeve shirts, hoodies, crewneck sweatshirts, PopSockets (mobile accessories) and phone cases. Merch by Amazon says more product and apparel styles will be continually added to increase product selection. As of now, all products are manufactured and produced in the U.S.

Because Merch by Amazon is integrated with Amazon.com, designs then live on the marketplace as regular product listings. Branded storefront pages (which are optional) enable brands to provide their full assortment of products sold on Amazon, giving the buyer a seamless shopping experience.

“There are many popular branded products that are performing extremely well on Merch by Amazon,” says Roque. “For example, Sanrio has a wide assortment of PopSockets across all of their characters. This is alongside other items their licensees are selling and their apparel items from Merch by Amazon. It makes for a great customer experience to find all of these different products in one place.”

Popular brands using Merch by Amazon include Sanrio, Disney, Cartoon Network, Activision Blizzard, AMC and many more.

The nature and structure of Merch by Amazon also allows it to be fast and nimble, bringing unique product assortments that are of-the-moment to customers almost immediately.

“Because we provide an opportunity to create, publish and sell content within minutes, timely products tend to do very well. Think pop culture moments like viral quotes and social events, etc.,” says Roque. “Designers who are forward looking and can tap into those moments in time have seen amazing success.”

The service is a win-win for everyone. Sales insight can be derived from a multitude of data points, allowing the licensors, licensees and content creators to see immediately what is working and what is not. And because the product carries no risk or overhead, licensors, licensees and content creators can also use Merch by Amazon to analyze sales and adjust strategy before delivering large orders to other retailers.

“Brands who are using Merch by Amazon are able to see in real-time what their customers are buying or which colors and sizes are selling. Access to this data can support defining what products you want to offer in other sales channels,” says Roque. “The power of this tangible data can drive huge efficiency in the selection mix when there is a requirement to produce merchandise in advance. That’s not something brands have been able to achieve, at scale, previously.”

An example? Netflix’s 2017 satirical crime series “American Vandal.” Launched exclusively on the VOD network in the increasingly common single content drop model (meaning all episodes were available at once, allowing for binge sessions), “American Vandal” merchandise was scant, and producers CBS and Funny or Die had no idea what elements from the show were going to resonate with fans and translate to product. But through Merch by Amazon, CBS was able to get product to market and available to customers almost immediately, capitalizing on the short content delivery window and spike in activity.

This ability to test items online and to analyze and better understand customer demand in real-time is critical to brand growth. With brick-and-mortar traffic shifting and the retail landscape changing rapidly, more than ever data is key to defining a brand and delivering on that brand’s promise. No more can brands afford to launch a program and wait and see–shelf space is limited and retailers are more measured than ever in what product assortments they are willing to take risks on.

According to Roque, the good news is that experimentation is getting cheaper because of print-on-demand services like Merch by Amazon.

And make no mistake, the print-on-demand opportunity is delivering financially. Merch by Amazon has a clearly defined royalty formula structure that it rolls out to all licensors, licensees and content creators.

“The key difference [between traditional retailers and Merch by Amazon] is that we pay royalties on every product sold based on the retail price, which the brand establishes. Given there is no inventory, inventory risk is mitigated and there are no upfront production costs or having to make assumptions around what customers want. You can take some great creative liberties, and if something sells, you know pretty much in real-time,” says Roque.

Merch by Amazon is also positioned, thanks to its bird’s-eye view of the marketplace, to identify macro trends across industries.

“Overall, through social media we’re seeing that new brands can have very spikey, and sometimes short-lived, demand curves,” says Roque. “Additionally, customers more and more require a tailored shopping experience. Customers expect to be able to find exactly what they’re looking for, when they want it. This means brands need to expand their selection and ability to respond to the customer’s timing in ways previously unanticipated.”

Speed is also a huge factor in customer experience, and nobody is better at that than Amazon.

“Two-day delivery is kind of the norm right now, but we’re headed toward two-hour and one-hour delivery,” says Roque. “That’s what customers want, and where the business is headed.”

Merch by Amazon is also fundamentally redefining the very definition of what it means to be brand, and how that brand awareness is created in the marketplace. Smaller brands are able to gain exposure, setting them up to capitalize on licensing moving forward.

“The ability to create thousands of products without any risk, learn from what customers want in real-time and action things that are topical within minutes redefines the way a new brand can operate. What previously took months or years can now take literally minutes,” says Roque.

Ultimately, Merch by Amazon is offering a platform that is simply delivering on what customers are demanding. And as the average buyer shifts younger, and new generational habits continue to evolve the retail landscape, it is nimble companies and solutions such as Merch by Amazon that are paving the way for innovations yet to come, even for this very service itself.

“What started out as a proof of concept for print-on-demand t-shirts has morphed into so much more,” says Roque. “Our product range and capacity to manufacture has grown by leaps and bounds since launch. Now we have become a scalable print-on-demand service accessible to a massive customer base, and for the first time ever, there is a place where a brand can come and launch a product in minutes and have in fulfilled to a customer in two-days with Prime.”

Amazon will be heading to Licensing Expo, taking place May 22-24 in Las Vegas, Nev., at the Mandalay Bay Convention Center, as well. Nicholas Denissen, vice president, Amazon, will host an opening keynote panel on Tuesday, May 22, at 8 a.m. local time. The panel discussion, titled “Great Expectations: Pace, Selection, Convenience and the Customer,” will speak to how brands can grow their business online and what Amazon is doing to enable that. With the increase in customers’ appetite for unique content and larger selection, Denissen and a panel of industry leaders will discuss how together businesses can support and challenge the industry to scale business faster and greater than industry expectations, with clear value for customers.

HOW TO EVALUATE A LICENSING PARTNER

jeff-lotman-profile-picture

To do licensing right, resist the temptation to do it right now.

If you’re reading this, then you’re no doubt familiar with the world of brand licensing. You know the difference between celebrity licensing and brand licensing. You can regurgitate the perils of logo-slapping at a moment’s notice. You have LicenseGlobal.com bookmarked in your browser.

Yet, even when brokered by experts, licensing partnerships can fail. Licensors sometimes let their guard down when dollar signs loom, while reasonable sounding exclusivity clauses almost always sentence a deal to stagnation. Over the past 20 years, here are the four biggest signs I’ve learned that your potential partner will be a problem.

They Have No Patience

Licensing can be profoundly profitable, but it’s not a get rich quick scheme. Deals take time—to vet partners, to negotiate contracts, to conduct market research, to develop supply chains, to execute marketing plans, to respond to market conditions—and that’s all for a single product.

A clear sign that a partner doesn’t appreciate this scope comes in the form of a seemingly innocent question: “Can I count on licensing money for my profits and loss next quarter?” The truth is, they probably can’t. Typically, it takes 24-36 months before sales kick in. That’s not only because of the work involved; it’s also because of a cardinal rule known to every businessman everywhere—you only get one chance to make a first impression.

The bottom line: even if you, as the licensor, aren’t doing the heavy lifting, there’s still a lot of lifting that needs to get done.

They Don’t Respect the Process

Here’s another litmus test we pose to partners: will you complete a 10-page business plan? For big companies, this is child’s play, both because they’re filling out a template rather than creating a document from scratch, and because the questions are so common in the C suite, such as what licenses do you hold? What royalties do you render? What guarantees do you offer? And most importantly, how does your brand complement the licensor’s?

If a licensee isn’t willing to fill out this form, they’re not serious. (Years ago, one potential client balked at this paperwork. “You know who we are—just do it yourself,” the CEO said. His more-indulgent competitor is now cashing major checks each month.)

The bottom line: Licensing is too important to your reputation and to your revenue to be left in the hands of a partner that can’t be bothered with the equivalent of the clipboarded questionnaire you get before seeing a doctor.

They Want the World

Every licensee wants global rights. I get it—in theory, they should be able to sell their wares wherever they want. Yet the smartest licensors refrain from ceding this ground upfront. It’s too important.

The probable retort is predictable. They say, “This means I can’t lock up China.” Here again, the truth is hard: That’s correct, at least initially. While many licensees claim global reach, only 1 percent operate on a truly global level.

Indeed, licensors who let licensees tie up territory invariably encounter intractable issues, such as what if your partner fails to meet their sales or royalty targets? What if their relationship with a key vendor sours? What if they start selling outside an authorized channel? Sorry. You’re stuck, your contract gave them exclusivity.

What’s worse, by the time you figure out a solution, it may too late.

The retailers that have been putting your products on their shelves will now demand tougher terms.

The bottom line: The smartest licensors think globally, but act regionally.

They Focus on the Short Term

I hear the following story about once a month: a hot brand owner gets cold-called by a licensee. “We want to make you rich,” the latter promises. The advances sound generous and the projections rosy. Naturally, the licensor is flattered.

But licensing is a long-term program. The smartest licensors don’t chase short-term payouts, they think in terms of decades, not quarters.

To wit, here’s what I tell clients: never accept the first deal you’re offered. Similarly, the biggest company isn’t always the best. Instead, the longest-lasting and most lucrative deals spring from deep research. Who’s the best manufacturer? Who has the best distribution network? Who provides the best royalty rate?

These are questions that require deep diligence to answer. But if you invest the time and resources from the get go, then I can tell you this with the confidence of having founded and run one of the world’s top licensing agencies: You can make a mountain of money.

Jeff Lotman is the founder and chief executive officer of Global Icons, a brand licensing agency. His growing corporation is a licensing agency that specializes in the extension of corporate brands and trademarks since 1988. His prescience that employees in global markets would better service clients in those areas has helped propel his company to becoming the largest global brand-focused agency, generating more than $5 billion in retail sales. Clients include Bob Evans, Crock-Pot, Ford, Nutella, Qdoba, the U.S. Postal Service and Vespa.

TOYS ‘R’ US FINDS BUYERS AND BIDDERS

toys-r-us-store

More updates on the state of Toys ‘R’ Us are coming in, and buyers for the toy retailer operation are starting to trickle in.

In Central Europe, Smyth Toys has acquired Toys ‘R’ Us’ operations in Germany, Austria and Switzerland for €80 million (on a cash-free and debt-free basis) and an estimated aggregate purchase price of €79 million.

Meanwhile, Isaac Larian, chief executive officer, MGA Entertainment, is ending his efforts to purchase the Canadian arm of Toys ‘R’ Us and is cushioning his formerly rejected bid for the toy retailer’s U.S. arm, according to The Los Angeles Times.

According to the source, Larian is “satisfied” with the idea that 82 Canadian stores may be operated by Canadian investment firm Fairfax Holdings. Fairfax Holdings and Toys R’ Us reached a tentative agreement to buy the stores for $237 million.

The bankrupt toy retailer rejected a bid from the toy billionaire for $215 million. Larian’s bid included $675 million to operate 200 U.S. locations, a point that was not included in Fairfax’s bid. Larian and his team plan to spend the next week re-evaluating the value of the store as well as unnamed Toys ‘R’ Us IP. Several sources have named Li & Fung as a top contender for the retailer’s Asian operations.

BRANDGENUITY TUCKS ‘ODDBODS’ INTO BED

oddbods-screen-grab

One Animation has partnered with Concept One Accessories and American Marketing Enterprises, a Global Brands Group subsidiary, for a line of sleepwear and accessories featuring its animated series “Oddbods” in North America.

One Animation has partnered with Concept One Accessories and American Marketing Enterprises, a Global Brands Group subsidiary, for a line of sleepwear and accessories featuring its animated series “Oddbods” in North America.

Brandgenuity, One Animation’s North American licensing agent, brokered the deal.

Under the terms of the agreement, both companies will develop a line of children’s sleepwear including pajama sets, gowns, sleep pants, robes, boxers, thermal underwear and more inspired by the “Oddbods.”

“We are thrilled to bring American Marketing Enterprises and Concept One on board in the U.S.,” says Will Ochoa, international licensing director, One Animation.  “Both of these partners make fantastic products and will complement our core toy and apparel lines to create a complete ‘Oddbods’ statement at retail in 2018.”

‘SESAME STREET’ IS STYLING APPAREL ALL ACROSS ASIA

sesame-street-apparel

Sesame Workshop is set to expand its fashion and lifestyle offerings with a slate of licensing partnerships across Asia.

New partners include:

  • Lalobo, a casualwear brand that launched a “Sesame Street” collection in more than 200 of its Chinese stores. The line included sweatshirts, sweaters, bomber jackets, jeans, down garments and dresses.
  • Tyakasha, a Shanghai-based label that will introduce a new range of “Sesame Street” apparel and accessories including lunch boxes, umbrellas and phone cases via its online shop.
  • Chocoolate, a Hong Kong-based retailer for a line of themed t-shirts, hoodies and tote bags, which will be available in Hong Kong, Macau, Taiwan, China, Singapore and Canada.
  • B. Duck, a Hong-Kong-based retailer for a line of graphic t-shirts, sweatshirts and pants.

“We’re able to reach our fans in ever-expanding ways with exciting new ‘Sesame Street’ content and products fueled by the power of partnerships,” says Ed Wells, senior vice president, head, international media and education, Sesame Workshop. “Collaborating with these top fashion labels allows our brand to continue expanding and growing as we approach our landmark 50th anniversary.”

PEPSI IS STAYING FRESH WITH NEW FASHION COLLABS

pepsi-fashion-collab

Pepsi is expanding its “Love It. Live It. Football” campaign with a new capsule collection supported by fashion partners from around the globe.

The “Art of Football” collection features styles from labels including U.K.’s Boohoo and Umbro, Australia’s Le Specs, Tthe U.S.’s New Era and Russia’s Anteater, and celebrates soccer culture around the world. The streetwear-inspired range also features apparel and accessories such as t-shirts, backpacks, bucket hats and iPhone cases from Anteater; hoodies, tracksuits, t-shirts and cropped jackets from Boohoo; soccer t-shirts, shorts and balls from Umbro; sunglasses from Le Specs; and fashion headwear and t-shirts from New Era.

“Pop culture acumen–from sport and music to art and culture–is embedded in our Pepsi brand identity. It’s exciting to see our brand extend its power beyond the refreshing cola it is traditionally known for,” says Natalia Filippociants, senior marketing director, global Pepsi trademark, global beverage group, PepsiCo. “Football is the world’s game–and that culture and lifestyle goes beyond where and how we watch the game, to how we love and live the game. And that is where this fresh capsule collection plays. It brings the spirit and energy of football off the pitch and into lifestyle apparel and accessories.”

The collection will be available beginning May 21st on each partners’ e-commerce site as well as at department stores, fashion retailers and online at BooHooman.com/Pepsi.

LICENSING BEYOND THE SNACK AISLE

kellogg's-rice-krispies-treats-packets

Although the licensing industry has heavily leaned on entertainment and character brands in recent years, another sector of the industry is quickly gaining traction and making waves in a host of categories–food and beverage.

The food and beverage sector is part of the larger corporate trademarks and brands category, which represented 21 percent, or $54.6 billion, of global retail sales of licensed merchandise by property type in 2016, according to the International Licensing Industry Merchandisers’ Association (LIMA) 2017 Global Licensing Industry Survey. Furthermore, food and beverage licensing represented 6 percent, or $15.6 billion, of global retail sales of licensed merchandise by product category in 2016. In terms of product type, food and beverage licensing trailed only a handful of categories: apparel (15 percent), toys (13 percent), fashion accessories (11 percent), home décor (7 percent) and software/video games/apps (7 percent).

“It is a healthy market to enter and can by very profitable, if done right,” says Lauren Montemaro, associate director, Beanstalk. “There is an openness to licensing and there is a lot of activity and partnerships in the space because of this. Currently, we are seeing a lot of innovation with a focus on taste and health. More and more, we are seeing flavor as the most important purchase driver for many of the food and beverage players participating in licensing, especially with younger consumers who buy on impulse. We are also seeing a push toward organic and natural ingredients–health and quality are some of the more important purchase drivers today in the food and beverage space.”

So, what does this mean for classic food and beverage brands like Hershey’s, Kellogg’s, Chupa Chups, Breyers, Welch’s and more? A host of licensing opportunities in both the food and beverage sector and other categories such as apparel, accessories, home décor and more.

One example of a successful food brand in the licensing arena is Perfetti van Melle, which owns both the Chupa Chups lollipop brand and the Airheads confectionery brand. For Chupa Chups, the company has expanded the brand in both the food and beverage space and additional product categories, and now reports that the food and beverage portion of the Chupa Chups licensing business now represents close to 20 percent of the overall licensing business. Recent partnerships include Vandemoortele for doughnuts, London-based fashion label Fyodor Golan for an assortment of womenswear, Spanish fashion brand Macson for menswear, Cotton On for kidswear and Thailand-based Take n’ Care for bath and body products, among many others.

Meanwhile, for Airheads, Perfetti van Melle has partnered with chains like 7-Eleven and Taco Bell for Airheads ice drinks. The confectionery company has also teamed up with Jelsert for an Airheads freezer bar based on its mystery flavor concept and Bahama Bucks for a shaved ice drink, among others.

Both brands have also collaborated with Unilever for water-based frozen novelties.

Moving forward, Perfetti van Melle is looking to expand both brands across frozen novelties, desserts, bakery products and drinks. In addition, one of the company’s agents, Beanstalk, is exploring additional partnerships.

“To enter into the food and beverage arena, a brand should be well established and have longevity in the market to enjoy full consumer trust,” says Christine Cool, licensing area manager, Perfetti van Melle Group. “If the brand is known for its large flavor variety, this is a huge asset to take to adjacent food and beverage categories.

“To have success and be sustainable, each food and beverage extension should bring an original proposal to the market with a clear unique selling point that adds value to the core brand,” continues Cool. “Another key issue is striving for product excellence. To do so, food and beverage licensing programs require the full in-house support and coordination of marketing and research and development teams of both partners. It is also necessary for the brand owner to develop internal protocols that ensure the alignment of licensed products with the product policies of the core product.”

Another food brand that is continuing to expand its reach through licensing is The Hershey Company, which is known for popular confectionery brands like Hershey, Hershey Kisses, Reese’s and Jolly Rancher, and reported $1.5 billion in licensed retail sales globally last year.

According to Ernie Savo, director, global licensing, The Hershey Company, ice cream and frozen novelties are the largest category for the company’s licensing business, both domestically and globally, followed by beverages, cereal and “ready-to-eat” desserts.

Key food deals for the classic chocolate brand include Kraft for Hershey’s pudding and International Delight for Reese’s-flavored coffee creamer, which originally launched as a limited edition item but will debut as an everyday product this year.

Most recently, CAA-GBG Global Brand Management Group signed on three new partners to develop a variety of products for the brand including Jacmel Jewelry for Hershey’s- and Hershey’s Kisses-themed jewelry, Animal Adventure for plush assortments and FloraCraft for crafting goods such as foam shapes and accessories.

Other key non-food deals for the Hershey’s brand include s’mores accessories, grilling accessories, caddies and more from Blue Rhino, as well as Hershey’s Kisses-shaped lip balm.

In the coming months, The Hershey Company will look to expand its reach in the frozen dessert space as well as the refrigerated space.

While many food and beverage brands have their own in-house licensing teams, many choose to look to agents to expand their reach into new categories. For example, The Joester Loria Group is known for representing a score of food and beverage brands such as Pepsi, Corona, Kellogg’s and Entenmann’s, among many others.

In the coming year, JLG is focusing on direct-to-retail partnerships that coincide the 2018 Pepsi Generations global marketing campaign, which will celebrate Pepsi moments that matter from the past, present and future. For its first spring 2018 collaboration, JLG has teamed up with Coach for an 18-piece collection of limited edition items including Pepsi-themed leather goods, apparel, footwear, accessories and more. JLG is also planning additional fashion-forward, Gen Z-targeted collaborations that will launch this summer and be in store for the back-to-school and holiday seasons. Other key licensing deals for Pepsi include Cotton Citizen, which developed a Pepsi-themed capsule collection featuring hoodies, denim styles and more.

Another PepsiCo brand that JLG represents is Mountain Dew, which kicked off a year-long partnership with VFiles last year that saw a series of capsule collections and activations. To enhance the collaboration, Mountain Dew teamed up with a host of influencers to promote merchandise drops and events. The result? More than 3 billion media impressions, including placement in top publications. The co-branded collection also saw key pieces launch at PacSun.

Meanwhile, for Corona, JLG has crafted a robust program that spans multiple seasons throughout the year (including Cinco de Mayo, summer and Day of the Dead). The brand’s key categories include apparel, swimwear, footwear and headwear; however, home products have grown significantly in the past year with glassware, barware, serveware and more, according to Debra Joester, president and chief executive officer, JLG.

The Corona brand has partnered with Reef for a 3 season collaboration kicking off with men’s and women’s footwear and apparel collections timed for Cinco de Mayo, 2018. Corona and Reef plan join marketing support of the collaboration through Electric Beach events, social media, influencer campaigns, Corona’s Summer Beach House promotion and other activities that will kick off during Cinco de Mayo and build throughout the summer. Corona x Reef footwear and apparel will be available at better specialty retailers that sell Reef branded product. This fall, the second Corona x Reef collaboration will hit the market to coincide with Dia de los Muertos on November 2nd.

Furthermore, Walmart continues to serve as the brand’s largest retail partner, and national chains including Target, Kohl’s and Kmart also have multi-category offerings.

In 2018, Spencer’s will serve as a “Cinco de Mayo headquarters” for a broad assortment of Corona licensed products with merchandise, in-store displays and window signage.

Walmart continues to drive the greatest sales volume for the brand, with national chains including Target and Kohl’s supporting multi-category offerings, and grocery retailers including Kroger and Publix supporting hard goods

“We find that partnering for extended collaborations over multiple seasons elevates consumer awareness and insures the collaboration delivers the desired impact. We are delighted the Reef collaboration with Corona extends over 3 seasons, insuring the partnership will break through the clutter of short term collaboration to drive buzz marketing, secure retail placement and engage consumers,” says Joester.

In addition to its robust assortment of beverage brands, JLG has also reported success in growing Kellogg’s and its lineup of brands including Frosted Flakes, Froot Loops, Coco Pops and Rice Krispies.

Recent highlights from the Kellogg’s licensing program include a DTR partnership with retailer Typo, a division of Cotton On, that includes stationery and gift items including phone cases, journals, luggage tags, slippers, accessory pouches, cooler bags and mugs. The collection will also be supported by dedicated displays and shop windows. In 2017, JLG also teamed up with Uniqlo for a collection of graphic t-shirts featuring vintage Kellogg’s characters, as well as Australian retailer Peter Alexander for sleep and loungewear.

JLG will also be expanding the Kellogg’s home program this year. Partners include RSquared for tableware as well as Maxx Marketing for bowls, mugs and kitchen storage.

In an ancillary food segment, Brand Castle has signed on to develop seasonal Rice Krispies treat making kits for Halloween, Holiday, Easter and Valentine’s Day, all of which are available at Walmart, Christmas Tree Shops and regional grocery stores.

Finally, for Entenmann’s, JLG has teamed up with White Coffee for flavored coffees in single serve and ground bags, which will be available at Bed, Bath and Beyond, Christmas Tree Shops, regional grocery chains and more; Pelican Bay for pancake mixes, which will be expanded to include quick bread mixes in seasonal flavors; and Praim for branded chocolate bars, which will launch later this year.

Another licensing agency making waves in the food and beverage space is Brandgenuity, which represents brands like White Castle, Mrs. Fields, TCBY (in the U.S.), Welch’s (in Europe) and Anheuser-Busch (in Canada, Europe and Asia).

One key licensing deal in the food and beverage space for Brandgenuity saw Anheuser-Busch collaborate with Savencia for the Pave a la Leffe, a cheese that leveraged the flavors of Leffe beer.

However, in the next 12 months, Brandgenuity is set to develop a host of food extensions for White Castle, which will range from meat snacks and salty snacks to condiments and sliced cheese; Mrs. Fields, which will include confections, baking ingredients and frozen breakfast items; TCBY, where the company will focus on frozen novelties and yogurt-based snacks; Welch’s, which the agency plans to expand into juice, frozen fruit, smoothies and more; and more. Additionally, Brandgenuity will explore a host of food extensions for Anheuser-Busch.

Building on its robust assortment of properties, Beanstalk has also turned to food and beverage licensing with brands like Guinness, Baileys, Captain Morgan, Godiva, Turtles, Flipz and Filippo Berio.

For the Diageo family of brands, which includes Guinness, Baileys and Captain Morgan, Beanstalk reports that the top performing categories in the food and beverage space include confectionery, frozen novelties, meatballs, coffee and coffee creamers, beer batter/breading, baked goods, baking kits and salty snacks. Building on its lineup of top performing categories, popular licensing deals from the past year for Baileys included Ciao Bella Gelato for flavored gelato and Turn for liqueur-filled and non-alcoholic chocolate truffles.

This year, Beanstalk plans to focus on expanding the Diageo brands into more frozen options, on-menu and on-premise, meats and seafood, salty snacks, desserts, coffee and more.

Beanstalk is still in the early stages of developing licensing programs for Godiva, Turtles and Flipz; however, the agency is looking to extend the brands into food and beverage categories including ice cream, frozen novelties, beverages, baking, snacks, desserts and on-menu. For Filippo Berio, the agency is looking to add Italian-inspired products such as pasta, pasta sauces, dressings, bread and olives.

Finally, Seltzer Licensing has grown its robust food and beverage portfolio with brands like Breyers, Klondike, Popsicle, Good Humor, Popeye’s Louisiana Kitchen, Del Monte and Campbell’s, among many others.

Key highlights from Seltzer’s licensing program from the past several years include Unilever, which has unveiled an assortment of co-branded ice creams including Oreo and Reese’s to 15-plus countries around the world. The agency has also been focused on helping its clients use licensing as a solution for product format and category extensions domestically.

In 2018, Seltzer Licensing will continue to put an emphasis on international licensing as well as an overall focus on strategic/seamless food-to-food licensing extensions. The agency will also put an increased focus on brands like Campbell’s, Unilever and Del Monte, among others.

“Food and beverage licensing, when done right, remains a highly lucrative category and one that continues to see growth particularly as more food and beverage brands view licensing as a real alternative to self or third-party manufacturing for product format and category extensions,” says Stu Seltzer, president, Seltzer Licensing Group. “That said, recent retail trends and industry consolidation have led to limited shelf space and a smaller pool of prospective partners with adequate capabilities and quality. As such, food and beverage licensing, now more than ever before, requires a very strategic approach in order to ensure success and mitigate the inherent risks, which is why an agency like ours specializing in food and beverage licensing can really add value.”

The toys business is growing up really fast! Shree from simba gives us the low down!

shree-narayan-sabharwal-business-head-simba-toys-india

Shree Narayan Sabharwal – Business Head, Simba Toys India Pvt Ltd speaks about the Indian toy industry and it’s dynamics to the India Licensing Post’s editorial team.

 

You can either listen to the conversation at the bottom of the page or have a read!

 

ILP: You joined Simba Toys in 2012. Prior to that, you headed the toys and sports category for the Future Group, across all formats such as Big Bazaar, Pantaloon, Central and Home Town.Tell us a little bit about your journey around that time and why you decided to join Simba Toys.

Shree: I joined Big Bazaar around 2005. I was taken on-board for furniture business but my boss thought that toys were a category that needed some handholding so he put me into toys.Future Group was in a very high growth stage and they used to sell through different verticals – Pantaloons, Central, Big Bazaar, Hometown etc. It was challenging& exciting because the assortment that you sell across these formats was very different, Big Bazaar was very very price sensitive, even today it is very price sensitive, compared to a Central which is a little more lifestyle and upmarket. In those days there was no Hamleys so the departmental stores like Central and Shoppers Stop which were more aspirational used to stock and sell all the expensive toys. It was a great learning because it taught me about what would sell at different price points, what would sell at scale vs what would sell in vogue and at a higher price.You were looking at volume vs value. So it gave me great exposure to a wide spectrum. In one vertical we were buying in huge quantities and the other we were buying lesser quantities in the other.

Joining Simba was a decision I took because I had always been on the buying side of the negotiation, so Simba gave me an opportunity to be on the other side of the table. In Future Group, I was trading through different verticals, and I had a team of around 7-8 people working under me and around 15 across the zones. Big Bazaar used to do a business of around INR 100 Crore (1 Bn) business, Central used to be around INR 20 Cr (0.2 Bn) business and Pantaloons used to do around 12 crores (0.12 Bn) business. So I was effectively running a business of around INR 150 odd Crores (1.5 Bn), so that gave me the confidence to run a business at scale and we were the largest toy sellers in the country. I knew of Simba because we used to meet them at the Toy fairs, they had a very big range and what I liked most was they were completely hands-on with the manufacturing process. Simba doesn’t sell anything which they don’t manufacture. It was not a trading company but mostly a manufacturing company, and I could see a huge potential for their portfolio but they were not very well represented here. Also, there weren’t too many brands, India was still opening up, and there was this German brand (with superlative production quality) and all it required was to present the portfolio across the various channels effectively and become the 3rd largest toy company in India. So that is what made me shift here.

ILP: What about the toys and sports category excites you the most?

Shree: Initially it was about scale. I was handling furniture and other hard categories before I joined Future Group. When I came to Future Group I was handed the toys category and what I loved about it, as my son as well as growing up around that time, So I could see what other things a parent looks at when buying an infant toy. We also used to bring a lot of smiles to the faces of kids. Even my experience at Big Bazaar was that when a family used to come and shop, there wasn’t much for the kids to do – s/he was not interested when the parents wanted to buy a garment. So they would run towards the toy section and play there.It was very fulfilling to bring joy to the kid’s faces, we would have a lot of fun there! Even at Simba, we have a fuse-ball table, so when people don’t feel like working they go there and have fun. It’s a great way to always stay young at heart!

ILP: According to the LIMA 2017 Global study report, the Toys market comprises 13% or $35Bn of the overall licensed goods market. How big do you reckon it would be in India?

Shree: I think around the same number, I would not put it more than 15-17% of the overall market. The Indian market is slightly dynamic, its changing now after the regulations on the safety standards. Earlier the licensed market would be 30%, but half of those would be fakes. India was a very open market, you could get anything from anywhere. So very tough to put a number on it. We sell more fakes than the original product. But now it’s changing, it’s getting tough to import fake products. In the last 6 months, starting 1st Sept.we see this when we visit the wholesale markets, the amount of fakes has come down quite drastically.

ILP: Simba Toys had plans to open over 25 retail stores throughout India. How have these fared? Any key learnings you would like to share?

Shree: Currently we have around 11 stores and in this financial year we’ve opened 2 stores. We’ve taken a pause as far as opening of stores is concerned primarily because of sales, the overall market sentiment was sluggish because of de-monetisation, then panic because of GST and in September there was a regulation change as far as the safety standards of toys and now from 1st Feb the custom duty on toys has increased from 10% to 20%. All these are great initiatives for the long term especially for a niche industry like toys in trying to get recognized as an industry by the government, it will help all the brands. Imports of fakes have gone down. There have been short-term losses. The only thing not going down is rentals. There is a dearth of a good real estate. Simba doesn’t want to open stores for the sake of it. We want franchisees to make money and there are a few proposals in the pipeline. Sales have been a lot more steady over the last few months and we see an uptick from here on without too many more changes.

ILP: Simba Toys is a licensor as well as a licensee for a few brands. That puts you in a unique position. How do you see the market for licensed products shaping up in India vs other global markets in which you operate?

Shree: We are in a very early stage of being a licensor, but one thing which I’ve started to notice over the last few years is that the licensed business has started to pick up the pace. One of the reasons is that people have begun pricing products well. Its largely been led by apparel. Earlier a licensed garment of Star Wars or any other action hero etc would cost you Rs. 1499/- upwards today its available at Rs. 499/- It’s more to do with getting the pricing right and placing it across the right channels and making it available in Tier 2 & Tier 3 cities, I’m certain the licensing business will continue to grow. And with the number of fakes coming down, the licensed business is sure to grow at least by 20-25% YOY.

ILP: You e-tail across many of the popular online stores. Any plans to have your own e-commerce platform?

Shree: Not at the moment. Since we are a 100% subsidiary of a foreign company, government FDI norms prohibit us from selling directly to the customer. As and when those are relaxed, we would certainly like to have our own e-commerce site. Till then we will continue to retail online through the various online marketplaces.

ILP: When do you think a brand is a license ready?

Shree: It’s a combination of a few things, but most importantly the brand has to fit into a particular segment. You cannot push a brand down the customer’s throat. There has to be some pull for it. You can put it on the shop floor, but unless the fit is right and there is a pull for it, the brand won’t succeed. We’ve seen that with our dolls line – the world over everyone knows of Barbie but when we launched, so when we launched our own doll Steffi everyone was surprised. But our proposition was that there is an option to Barbie and Steffi was also cheaper. If your product is right and the style guides are designed well with the end consumer in mind then it will work. We started getting inquiries for other products – backpacks, notebooks etc. It was not something we went to the market and sell. We were very clear that the product was not for 0-3 years but more for 4-8 – so the segmentation was very clear, the style guides were very clear, so people started to approach us.

ILP: How do you evaluate homegrown Indian IPs versus international IPs for the Indian market? What are the advantages and disadvantages of each?

Shree: I think Indian IP’s have come a long way and brands like ChotaBHeem have superseded all expectations and it’s very heartening to see. But what we lack in India is the life of a license. In India, the life-span is very low compared to the world. In many of the other western markets, you will see that the shelf life is much much longer. For e.g. a Spiderman movie may have released in 2015 but you will still have a buyer for it in 2018.  Honestly, I don’t think the licensors do justice to the property. All of us are looking for a short-term gain.The challenge is how to launch and sustain a property in the long term. And the makers of ChottaBheem got it right, if it has been able to sustain for over 10 years, then they’ve certainly done something right. Indians think very short term. We need to correct this thinking & learn to invest for the long term.

ILP: What are your must-haves while selecting a brand to license?

Shree: Most of our licenses are group licenses which we buy into on a global level. The strategy is well informed by various research, social media, and trend spotting. So its easier to identify the segment you want to play in and which characters are the best fit for the same. For us, the consumer is the kid and through various platforms, you come to know what is trending. In India, besides the toys we get from our mother company, we do school bags. We are very clear we don’t want to add to the clutter, but differentiate. We are very clear about age segmentation. We address a wide age group from 0 to a college-going teen. We have a very clear idea how many properties we are going to take and for which age group and then based on the minimum guarantees we take a decision and go ahead. We are very clear we don’t want to clutter any particular gender/age segment with too many properties.

ILP: Which has been one great success story for Simba overseas you would like to replicate in India?

Shree: I think there are many as far as Simba is concerned. India sees a lot of the launches come here a little late. One standout success for us for which Simba has the master toy license is Masha & the bear. Its one of the most watched characters on YouTube. We are launching Masha next month and the potential is huge. Another great success has been Fireman Sam, which has also been a global smash hit across the Americas, Europe etc. I’m sure if we can launch both of these wells in India 2018-19 will not only be a great year but a super year for Simba in India.

ILP: What would be your advice to a young professional looking to start a licensing business?

Shree: You need to be patient in the licensing business. Don’t look at a property for short term. Both licensors and licensees need the money quickly. But both need to first invest in the business. When we did Barcelona and Dora, we did them for 3 years, not short-term 1-year deals. The business is going to grow 20-25% YOY. Stay invested in the property and reap the rewards over a longer period of time, else there is no attachment to the property. If you focus on only making back your minimum guarantee and get out of it, that doesn’t work. In year 1 the priority should be to build the awareness, Year 2 should be about how to get it to more customers and in year 3 the sales will be so good, you will want to renew the agreement for the next 3 years. Simba is primarily a manufacturing company, so the licenses we take whether it is from Disney or Universal. Simba doesn’t like to do short-term deals. So whether it’s the Lightning McQueen car which we have been manufacturing for the last 5-7 years or Transformers for the last 3 years. So as a company we look at staying invested for at least 3-5 years. Patience is the key!

 

 

To read more such interviews check our Interviews section and for expert opinions check the Open Mic section.

For feedback please write to us at indialicensingpost@gmail.com!