Brand Licensing 2016 Update

2016 was another great year for us here at IMC. We enjoyed working with our licensing partners and meeting with potential new clients. Sales for our programs were strong and several of our licensees were able to secure new retail placement. The licensing industry overall had a great year with record sales numbers. U.S. and Canada 2016 licensing retail sales reached over $106 billion, $2 billion more than the 2008 high of $104 billion. The regrowth of the economy seems to have people spending more on branded products, especially in the entertainment sector.

Brand licensing ranks 5th in category growth with a 2.9% increase from 2015 to 2016. Entertainment licensing saw the most growth at 7.6%. Art and publishing saw minor, but impressive growth for their segment, 1.6%, and 1.5% respectively. Trending not so well, Music, with a 1.5% decrease in licensing sales.

Within the brand licensing category Food and Beverage is the largest segment at 28% and saw the biggest growth in YOY sales at 4.3%. The success in Food and Beverage is likely from the repeat purchases of the products in general. If you're like me you go to the store 2 and 3 times a week and products like Panera’s Balsamic Vinaigrette Dressing and OREO®ice cream are regulars in my shopping cart. There are those that hate going to the store and many have started shopping online and or subscribing to food delivery services. The strong assortment of retail options for consumers within this segment allows for more licensing opportunities to differentiate products within the competitive food and beverage landscape.

DIY and Electronics also saw significant growth at 4%. I expect to see this category continue to grow as brands like HGTV and Fixer Upper continue to grow in popularity. More and more people are updating their homes and Lowes and Home Depot are at the ready with trendy licensed products and furnishings.

The automotive segment grew 2.2%, and I am interested to see how this segment grows over the next few years. Technology is a huge piece of the car industry these days. Will auto players license out their technology or license in new technology brands like Apple and Sony? Probably a little bit of both, and I expect to see some fun and interesting partnerships coming from the auto players.

Overall the market is strong for brand licensing partnerships! I look forward to seeing what 2017 has instore (pun intended) for licensing.

Data Source – The Licensing Letter (subscription required) - At $106.5 Billion, 2016 the Best Year Yet for Licensed Sales in the U.S./Canada
Emily Wickerham

About Author: Emily Wickerham

Vice President, ensuring that our clients are in good hands Emily has helped launch over 50 new products into the marketplace through her work with CPG brands, such as Kraft Foods, Wrigley, TABASCO, S.C. Johnson and Chiquita. She has extensive product development and royalty accounting experience and advises clients on brand strategy direction, marketing execution, trademarks and quality control issues.