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TLL Survey: Corporate Licensing Up 2% in 2014; Food/Beverage, Restaurant & Automotive Brands Lead the Way

At $26.8 billion, corporate trademarks and brands accounted for 27% of all retail licensed sales in the U.S. and Canada in 2014, the most of any segment (followed by fashion at 20% and sports at 14%), according to The Licensing Letter’s Annual Licensing Business Survey. But while it may be big, the corporate segment was also devoid of drama growing at a respectable but unspectacular 2.0% clip. Although 2014 growth was nearly three times higher than the 0.8% by which the segment grew in 2013, it was below the overall U.S./Canada growth rate of 2.5% for all licensed sales.The numbers also mesh with the anecdotal accounts of Survey respondents: Corporate licensing is growing but growth is modest and uneven. “2014 was better than last year but not as good as 2012,” notes one respondent.

Steady Growth of “Foodie” Segments

“Corporate is growing,” says a licensing agent, “but growth is slow and concentrated in a few areas.” The eating and drinking-related segments continue to represent the growth area in corporate licensing. In 2014, for the fifth straight year, food/beverage and restaurants grew the most of any property types (by 3.5% and 3.0%, respectively). “Big restaurants now need a retail customer strategy to survive—focusing on in-dining and takeout isn’t enough,” according to one consultant in the field.

Performance of Other Property Types

After years of decline, sales of automotive properties totaled a shade over $4 billion. Automotive was the only non-foodie property type to beat the 2.0% segment-wide growth average. “Big auto makers in the U.S. and Europe are stepping up their licensing programs,” explains one consultant. The popularity of do-it-yourself auto repair and car auction shows is also fueling growth of automotive licensing on both the property and product side. Corporate property types that were also up in 2014:

  • Electronics/technology grew 2.0% fueled, in part, by the extension of leading electronics brands into “wearable” products like apparel, accessories and sporting goods; and
  • Hardware/appliance/tools grew 1.5%. “Hardware and tools is one of the few sectors where there’s still room for branding,” explains one agent in the sector.

All other property types were either flat or down, including home-related (1%), sporting goods (0.5%) (although sporting goods was up more on the product side), and electronic media (-1.5%). Survey respondents offered reasons for the lackluster results. “Corporate brands are well known but not particularly sexy, especially to mass retailers,” suggested one corporate agent. “Corporations still have a lot to learn about licensing their brands, especially the ones new to the field who think they can do it all themselves,” explained a corporate licensing agent.

Retail Sales of Corporate Trademark-Licensed Merchandise, by Sector, 2013-2014
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Sector Retail Sales, 2014 Retail Sales, 2013 Change, 2013-2014 Share of Market, 2014
Automotive/Motor Vehicle $4,018 $3,920 2.5% 4.0%
Food/Beverage $7,268 $7,022 3.5% 7.3%
Restaurants $4,557 $4,424 3.0% 4.6%
Sporting Goods $1,317 $1,310 0.5% 1.3%
Hardware, Appliance and Tool $2,722 $2,681 1.5% 2.7%
Home-related $378 $374 1.0% 0.4%
Electronics/Technology $3,125 $3,063 2.0% 3.1%
Electronic Media $216 $220 -1.5% 0.2%
Other $3,249 $3,299 -1.5% 3.3%
TOTAL $26,850 $26,314 2.0% 26.9%

Performance by Product Categories

The growth in licensing of food properties is matched by growth on the products side. Sales of food/beverage licensed products increased 4.8% in 2014, second most of any product category (behind only the tiny gifts/novelties category). At $8.71 billion, food/beverage constitutes almost 1/3 of the market for corporate licensed products in the U.S. and Canada, with most sales coming from the frozen food aisles. “Grocery items like salad dressings and sauces are small potatoes; fresh foods and home delivery are still years away,” explains one consultant.

Apparel (4.6% growth, $2.5 billion total sales) and sporting goods (3.5%, $1.1 billion) continue to show strength. “Sport and fashion are becoming one and the same,” notes one licensor. “Jogging suits, yoga garb and running shoes aren’t just athletic equipment but wardrobe items,” echoes another respondent. Other key product categories in the corporate segment to post growth above the segment-wide 2.0% average include publishing (4.4%), consumer electronics (3.3%) and accessories (2.5%). On the flip side, product categories that have been in long-term decline were flat or down in 2014, including home furnishings, stationery/paper, domestics and video games/software.

Retail Sales of Corporate Trademark-Licensed Merchandise, 2013-2014, by Product Category
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Product Category Retail Sales, 2014 Retail Sales, 2013 Change, 2013-2014 Share of Market, 2014
Accessories $1,831 $1,786 2.5% 6.8%
Apparel $2,472 $2,363 4.6% 9.2%
Consumer Electronics $3,753 $3,633 3.3% 14.0%
Domestics $74 $75 -1.0% 0.3%
Food/Beverages $8,712 $8,313 4.8% 32.4%
Footwear $1,650 $1,634 1.0% 6.1%
Furniture/Home Furnishings $851 $868 -2.0% 3.2%
Gifts/Novelties $334 $305 9.5% 1.2%
HBA $995 $1,015 -2.0% 3.7%
Housewares $506 $506 0.1% 1.9%
Infant Products $218 $216 1.0% 0.8%
Publishing $812 $778 4.4% 3.0%
Sporting Goods $1,126 $1,088 3.5% 4.2%
Stationery/Paper $95 $100 -5.1% 0.4%
Toys/Games $539 $528 2.0% 2.0%
Video games/Software $510 $693 -26.4% 1.9%
Other $2,373 $2,412 -1.6% 8.8%
Hardware and Paint $159 $154 3.0% 0.6%
Gardening $108 $107 1.2% 0.4%
Pet Products $206 $208 -1.2% 0.8%
Automative Accessories $354 $350 1.0% 1.3%
Boats and Vehicles $489 $487 0.5% 1.8%
Other $1,057 $1,107 -4.5% 3.9%
TOTAL $26,850 $26,313 2.0% 100.0%

Sales by Distribution Channel

In terms of distribution, the predominance of traditional brick and mortar channels is especially pronounced in the corporate segment. As in other segments, discount is the biggest channel, accounting for 36.5% of sales. But the corporate sector also relies more heavily on the supermarket and grocery channel—27.1% of licensed sales in the corporate segment came from supermarket/grocery. This channel generated only 12.9% of overall sales of licensed products in the U.S. and Canada. Although it continues to grow, the e-commerce channel remains relatively small for corporate, accounting for only 6.4% of sales.

Want more? See detailed breakdowns and historical data for licensed merchandise based on trademark/brand properties in the Databank.


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