Brand Extension
How Brand Licensing Can Innovate Your Business

Innovation is hard. It can be time-consuming and costly. Yet it’s critical for brands to innovate in order to remain relevant in a shifting consumer and competitive ecosystem.

For decades licensing has been used by brands to increase awareness and build brand equity with consumers.  In addition to the significant revenue that a licensing initiative can generate, companies are realizing further benefits such as increased consumer touchpoints and supplemental marketing dollars that licensing can generate.  But another advantage of licensing is the opportunity to boost innovation efforts.

In today’s climate, where competition is quickly mounting and shelf space is shrinking, lauching new innovative product ideas takes time and poses significant risks for a brand.  These barriers can cause companies to shy away from innovation initiatives that would otherwise foster business growth in the long term.  Unfortunately, adhering to this stagnant mentality perpetuates the likelihood that the brand will lose relevancy and grow stale in the eyes of consumers.

This is where licensing can prove to be a valuable innovation resource for companies.  By licensing a new product instead of dedicating funding and personnel to design, manufacture, test and market a new product, brands can mitigate many of the financial risks as their first step in evaluating the viability of a larger initiative.  Through licensing, brand owners can explore and learn about a new business, under the tutelage of an expert – the licensee.  With the right partner, your company will retain an industry leader that can help you develop your brand in the new product category.

As a licensor, your licensee partners help grow your brand and your business at their expense and risk.  Meanwhile you receive significant royalty payments as you learn the business category and develop a strategy to further advance your objectives with the program.  If down the road you find the business attractive, you have the ability to create a bolt-on acquisition and enter the business directly.

When the fabric softener company Snuggle® wanted to boost their brand growth, they embarked on an initiative to bring the Snuggle Brand into new product categories outside of the laundry space.  Rather than take on the risks of extending into a new business outside their core expertise, Snuggle turned to brand extension licensing as a strategic solution for their innovation needs. 

Based on Snuggle’s goals and sensitivities, LMCA, Snuggle’s brand licensing agency, conducted target research to identify top profiles of prospective licensees. LMCA identified a top licensee partner in Reckitt Benckiser, owner of the leading air freshener brand, Airwick®.  Airwick was in the market to diversify their fragrance offerings and saw the Snuggle Brand as the perfect fit for the attributes they were looking for: softness, familiarity and clean/fresh fragrance.  In two years, Snuggle’s licensing program generated over $120 million in annual retail sales, becoming one of the top 150 Global Licensing Programs in the world. The Snuggle scent quickly became one of Airwick’s leading sellers. 

Acquired by Henkel North American Consumer Goods in 2016, Snuggle has proven successful in their venture into the air freshener space.  Confirmed by three years’ success in the market and annual sales over one hundred million dollars, the company is now building out their air freshener fragrance on the foundation of knowing the initiative is profitable.

Innovation does not come risk-free. It requires a significant amount of consideration, research and rationale to undertake, bearing in mind the steep financial and public risks of an initiative failing. However, innovation is also necessary.  Without thinking outside-the-box and constantly reinventing for the future, brands will die out and be overtaken by companies who are willing to take risks. Licensing helps facilitate companies’ innovation development efforts by offering a safer, quicker and less costly path to success.  Through licensing, brands can learn about a new business, build out their program and test the response of their product without all the traditional overhead costs and risks of manufacturing it themselves. Letting an industry expert take the lead and absorb the risk to help grow and market your brand is a smart way to think about building out innovation efforts for your company.


LMCA is a market founder and leader in making connections between growth companies and strong brands for licensing. We represent over $6.5B in annual licensed product sales. Let’s continue the conversation.  Learn more about how brand extension licensing can expand your reach, your customer base and your bottom line.  Contact Us Here

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