As explored in our "Character Licensing Trends in Packaged Food, and Beauty & Personal Care in Western Europe" report, there are many categories in packaged food, and beauty and personal care in Western Europe which remain untapped by character licensing. Restrictions on unhealthy food packaging are a challenge, but healthy eating and product formulation could bring opportunities. Character licensing in dental health offers prospects, although unfavourable demographics may hinder growth.
Size of the prize
Retail value sales of licensed and non-licensed licensing related categories in packaged food, and beauty and personal care* reached USD267 billion (2017) and USD38 billion (2016), respectively, in Western Europe. Dairy, the largest category in food, is projected grow by USD1.8 billion by 2022, while oral care, an important category for character licensing, is forecast a 2% CAGR in constant value terms over 2016-2021.
Declining birth rates bring challenges and opportunities
Western Europe had the lowest birth rate globally in 2016, at just 10.9 births per 1,000 inhabitants, which is expected to drop to 9.9 by 2030. Although a declining birth rate and postponing motherhood suggest trouble for character licensing targeting children, with higher disposable incomes and fewer children, parents are likely to increase the amount that is spent on their children, becoming less concerned about the prices and short life cycles.
End of characters on packaging of unhealthy food?
In December 2016, the Dutch food industry voluntarily decided to remove popular children’s characters from the packaging of unhealthy foods in a bid to curb obesity and promote healthier lifestyles. The Netherlands has thus joined some other countries in restricting unhealthy food packaging and its move should make character licensing businesses nervous, particularly in the countries in Western Europe with the highest level of obesity.
Savoury snacks: a category to watch out for
Savoury snacks are becoming increasingly popular, as salt has not (yet) undergone the same scrutiny as sugar. Within savoury snacks, popcorn, as well vegetable, pulse and bread chips, are projected to be the most dynamic categories over the next five years. Organic nuts, seeds and trail mixes is another category with good growth prospects.
Opportunities beyond established categories for characters in packaged food
Other baby food** is a category with considerable prospects for characters, since, unlike milk formula, there is no legislation that prevents licensing. There is also great interest in protein coming from other sources than meat, and on-the-go dairy products that provide non-meat protein. On the back of this trend, three categories stand out in particular which offer good potential for character licensing: cheese, flavoured milk drinks and drinking yogurt. Fruit and nut bars also remains broadly untapped.
Rise of natural/organic products in baby care: opportunities for characters
In order to address the shifting tastes of new generation consumers and the preference for more natural/organic alternatives, character licensors could potentially choose their licensing partners from niche players. Mustela, Garnier, Weleda and Hipp are the leading brands with natural/organic credentials in baby and child-specific products in the region, and could be good partners, while baby wipes could be a good category to target.
Oral care: character licensing could help to boost good dental health
Essentially, licensees and licensors could utilise oral care to be an educator and a catalyst for dental health improvement. There is a need to target parents, and using children’s characters which may exert a strong influence could encourage brushing habits. Manufacturers active in such campaigns are likely to secure a longer term consumer commitment to their brands and products.
Fragrances remains largely untapped
In fragrances, licensing is driven largely by fashion and celebrity licensing, but a proliferation of launches every year has led to a perceived sameness among consumers. There is a need to differentiate products from the existing offerings, and character licensing businesses are in a good position to achieve this thanks to story-telling and nostalgia elements.
Opportunities beyond established categories for character licensing in beauty and personal care
While there is already much licensed merchandise targeting children, when children reach a certain age it tends to stop. In shampoo, there is an opportunity to target tweens, young boys and girls with character licensed merchandise. In men’s grooming, characters could expand their penetration by targeting male consumers at an earlier age. Skin care, deodorants, fragrances and hair care also present good prospects. Character heroes from Marvel, DC Comics and Star Wars could lead the way, as they are well positioned to target this demographic.
*Packaged Food = Breakfast cereals , Ice cream, Dairy, Confectionery, Soup , Cakes, Pasta, Savoury snacks, Sweet biscuits, snack bars and fruit snacks. Beauty and Personal Care = Baby and child-specific products, Oral care, Colour cosmetics and Fragrances.
** Includes packaged food products specifically marketed for babies such as baby rusks, teething biscuits, baby fruit juices and baby pasta, but excludes dried and prepared baby food and milk formula.