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Corporate TM/Brands Up 2.7% in 2016; Food/Bev & Tech Lead

By: Karina Masolova,

Retail sales of corporate trademark/brand-based licensing were up 2.7% worldwide in 2016, according to The Licensing Letter’s Annual Licensing Business Survey. The U.S./Canada made up almost 80% of retail sales worldwide in 2016, and, in fact, grew at a faster rate than the rest of the world.

The U.S./Canada counted $28 billion in trademark/brand-based sales, compared to $7 billion in the rest of the world. The territory was also responsible for an uptick in growth worldwide, with sales growing 2.9% in the U.S./Canada versus 1.9% in the rest of the world. That translates into almost $800 million in growth for the territory, while sales grew just $140 million outside the U.S./Canada.

Over the three years spanning 2013 to 2016, retail sales of trademarks/brand-licensed goods grew 8.1%, compared to a 0.5% decline internationally. Globally, sales grew 6.2% in that period.

Retail Sales of Licensed Merchandise, Based on Trademarks/Brand Properties, Worldwide, 2013–2016
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Territory Retail Sales, 2016 Retail Sales, 2015 Change, 2015–2016 Change, 2013-2016 Market Share, 2016
U.S./Canada $28,443 $27,645 2.9% 8.1% 79.4%
Rest of World $7,401 $7,263 1.9% -0.5% 20.6%
Total $35,844 $34,908 2.7% 6.2% 100.0%

Retail Sales by Sector

In the U.S./Canada, we additionally break out sales by subcategory. For more historical data going back to 2008, visit the Licensing Data Bank.

The best performing subcategories with the greatest amount of retail sales in 2016 were food/beverage (33.4% of total trademark/brand sales), consumer electronics (14.1%), and apparel (9.4%).

The fastest-growing subcategories, on the other hand, were food/beverages (up 4.3% in 2016); hardware, appliance, and tools (4.0%); and electronics/technology (4.0%). The last two categories grew largely as a function of companies expanding into closely related products and taking their manufacturing out-of-house. Since 2013, however, every subcategory within trademarks/brands has been growing at a steady clip. Virtually no subcategory saw declines.

Royalties Steady

The average royalty for licensing based on trademarks/brands tend to run a percentage point or two lower than the industry-wide average—in 2016, the figure remained steady at 7.7%, compared to a 8.7% overall average. In part, this is because agreements are usually built on longer-term relationships than, for example, entertainment-based licenses.

The range of royalties stretches to the extreme low end (2%), with competition among brands an added factor in keeping rates in this sector below the average. Royalties are often largely dependent on the retail tier for which the licensing program is directed.

For example, in mass retail channels, royalties are generally two points or so below those headed for specialty channels, since the margin requirements of mass merchandisers limits the amount of royalty that can be absorbed into the retail price.

See the historical breakdown going back to 2003 (with subcategory breakouts starting in 2008) at the Licensing Data Bank.

Retail Sales by Product Category

Licensed food/beverage goods lead in retail sales, occupying 33.7% of all sales in the corporate trademarks/brands category. The lion’s share of licensed goods are a function of food/beverage and restaurant brands branching into licensed extensions, but there is also some activity from other property types.

The product category is followed by consumer electronics (14.1%; mostly from electronics/technology brands), apparel (9.4%), and accessories (6.7%). The last two product categories see activity from every subcategory under trademarks/brands.

The top five categories with the largest growth in retail sales over the last five years are food/beverages (33.7%), consumer electronics (28.7%), apparel (23.5%), hardware and paint (22.3%), and sporting goods (17.7%). Video games/software and stationery/paper saw the biggest declines from 2011 to 2016.

Retail Sales of Licensed Trademark/Brand Merchandise,
By Product Category
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Product Category Retail Sales, 2016 Retail Sales, 2015 Change, 2015–2016 Share, 2016
Accessories $1,905 $1,871 1.8% 6.7%
Apparel $2,667 $2,569 3.8% 9.4%
Consumer Electronics $4,002 $3,874 3.3% 14.1%
Domestics $76 $75 1.4% 0.3%
Food/Beverages $9,598 $9,158 4.8% 33.7%
Footwear $1,686 $1,671 0.9% 5.9%
Furniture/Home Furnishings $870 $859 1.3% 3.1%
Gifts/Novelties $275 $299 -8.1% 1.0%
HBA $981 $986 -0.5% 3.4%
Housewares $509 $507 0.4% 1.8%
Infant Products $221 $219 0.7% 0.8%
Publishing $865 $840 3.0% 3.0%
Sporting Goods $1,200 $1,164 3.1% 4.2%
Stationery/Paper $86 $90 -4.8% 0.3%
Toys/Games $561 $551 1.9% 2.0%
Video Games/Software $412 $422 -2.4% 1.4%
Other $2,532 $2,490 1.7% 8.9%
Hardware and Paint $171 $165 3.8% 0.6%
Gardening $115 $112 3.1% 0.4%
Pet Products $215 $209 2.8% 0.8%
Automotive Accessories $377 $366 3.1% 1.3%
Boats and Vehicles $496 $494 0.5% 1.7%
Other $1,157 $1,144 1.1% 4.1%
Total $28,445 $27,645 2.9% 100.0%

Representative Corporate Trademark/brand Properties

The range of corporate brands with licensing programs is enormous. We break out some of the larger sub-groups, including automotive/vehicle, food/beverage, restaurants, sporting goods, hardware/appliance/tool, home-related, electronics/technology, and electronic media. Retail brands, diet/health brands, luggage brands, and additional brand-based properties are aggregated under “Other.” Large as this sector is, much licensing in this area is “invisible” and difficult to estimate.

Automotive/Vehicle: BMW, Cadillac, Caterpillar, Chevrolet, Chrysler, Corvette, Dodge, Ferrari, Ford Motor, Harley-Davidson, Hummer, Jaguar, Jeep, John Deere, Kawasaki, Mack Truck, Mercedes Benz, Mustang, Porsche, Winnebago.

Food/Beverage: Arm & Hammer, Betty Crocker, Blue Diamond, Budweiser, Campbell’s, Cheerios, Chiquita, Coca-Cola, Coors, Corona, Del Monte, Dr Pepper/Snapple, Godiva, Green Giant, Hershey, Jack Daniel’s, Jim Beam, Kahlua, Keurig, M&Ms, Miller, Mountain Dew, Nathan’s, Nestle, Oreo, Pepsi-Cola, Pillsbury, Reese’s, Special K, Sunkist, Sun-Maid, Welch’s.

Restaurants: Baja Fresh, Baskin-Robbins, Boston Market, Burger King, California Pizza Kitchen, P.F. Chang’s, Cinnabon, Claim Jumper, Dunkin Donuts, Fazoli’s, Jamba Juice, La Tasca, McDonald’s, Red Robin, Starbucks, Subway, Taco Bell, TGI Friday’s, White Castle.

Sporting goods: Body Glove, Browning, Coleman, Dunlop, Everlast, Polaris, Rawlings, RealTree, Remington, Smith & Wesson, Spalding, Wilson, Winchester, Under Armour.

Hardware/Appliance/Tools: Black & Decker, Craftsman, DeWalt, Honeywell, Maytag, Snap-On, Stanley, Sunbeam, Westinghouse, Whirlpool.

Home-related: Croscill, Farberware, Fiesta, Mikasa, Mr. Clean, Pfaltzgraff, Rubbermaid, Waverly, Woolite.

Electronics/Technology: AT&T, Apple, Emerson, GE, IBM, Phillips, Polaroid, RCA, Timex, Verizon, Westinghouse, Xerox.

Electronic media: Animal Planet, Discovery Channel, ESPN, HGTV, Food Network.

Other: American Kennel Club, American Tourister, Armor All, Dr. Scholl’s, Eveready, Jenny Craig, Linens ‘n Things, Samsonite, Scotts MiracleGro, Sharper Image, Toys ‘R’ Us, Weight Watchers.


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