Licensing has become so much a part of our lives, whether in managing brands or managing retail, that we have to be increasingly aware of future trends and current properties. In this column, I hope to provide snapshots and offer insights and information that will prove relevant to the industry. With more than 25 years in the licensing business, I believe it has become an integral part of many consumer sales strategies, and is an effective sales promotion tool as well.
First, it might be helpful to look at how licensing fared over the past year. Looking back on 1995, sales of licensed merchandise were essentially flat. Experts estimate that total sales declined over the year from $70.5 billion to $69.9 billion. Nonetheless, there were several bright spots within the industry. In the categories of food and beverages, and health and beauty aids, sales increased between 5% and 6% over 1994.
In the food and beverages category, not only did character properties like the McDonald's/Power Ranger promotion drive this growth, but licensed brand extensions (Healthy Choice) and branded licensed product lines (Coleman) continued to sell well. Strong growth was evidenced in the fragrance market overall by the entry of new licensed fragrances, such as Calvin Klein's CK1, for mass market and department stores.
Corporate brand licensing (that is, Kodak, Ford, etc.), a category that provided the strongest growth in 1995, clearly holds promise as we progress into the new year. Indeed, it accounted for about $14 billion in retail, representing roughly 20% of all licensed product sales and an increase of approximately 7% over 1994. What this means is that in both the mass merchant/supermarket and department store environments, more brand names are being licensed onto more products. Whether through brand extension or promotional licensing, we should continue to see growth in this area through 1996.
Entertainment licensing continues to expand in 1996 with more movie titles, more properties and more television shows than ever seen before. With more than 40 movies scheduled for release this year alone, many active licensing programs will abound -- producing a handful of sure winners and perhaps an equal number of successful long-shots. Among them, look for "Flipper," "Harriet the Spy," "Alaska" and "Mars Attack."
Finally, as the number of licensed products continues to proliferate, the buyer at retail will become more discriminating. Nevertheless, if managed properly as part of an overall retail mix, licensed products will continue to play a major role in the sale of consumer goods well into the next century.
