When you have a beloved brand, the next step is expanding it. Building a brand franchise is about giving consumers more ways to surround themselves in the brands (and experiences) they know and love.
It takes the right licensing partnerships, however, for a brand to transcend its category — and to create collaborations that drive meaningful results for both parties and Hershey's strategic vision will continue to grow this initiative.
The Hershey Company has deep expertise in the kinds of licensing partnerships that make an impact. A recent licensing arrangement for confection-inspired cosmetics, for example, resulted in the HipDot x REESE'S collection — which turned out to be one of the fastest selling collaborations HipDot has done to date. As with most of its licensing collaborations, Hershey allowed HipDot (as the lead company) to drive the creative process for the product.
"After all, they're in the cosmetics business and we've partnered with them because of their success in the space," said Ernie Savo, senior director of global licensing and business development for The Hershey Company. "We provide guardrails, work collaboratively with the partner on vision and then ensure we have the right amount of flexibility to have the shared vision come to life in a way that's relevant for the category and pays adequate respect to the brands."
Being part of more experiences
Hershey is making many shared visions come to life across multiple focus areas of licensing initiatives.
Beauty products, such as the HipDot partnership and a previous collaboration for the Etude X Hershey's Kisses collection, fall under a commitment to expanding Hershey brands' presence in fashion and apparel. (Last year's Jolly Rancher-inspired New Balance shoe collection — designed in partnership with 2019 NBA Finals MVP Kawhi Leonard — was a creative way candy fans could wear their love for one of their favorite brands.)
"Products like these serve as constant reminders of your love of the candy every time you use them, not to mention the value of the conversations you have about what you're wearing," said Savo.
The same goes for conversations about the lifestyle items in one's home, such as Hershey's heritage artwork, or the merchandise that accompanies the core experience of enjoying Hershey confections. The Hershey's Kisses baking collection and recently expanded line of officially licensed Hershey's S'Mores accessories, for example — which includes branded carrying cases, wooden and light-up skewers, wipes, storage bags, and more — allow consumers to have Hershey along for their celebrations and family moments from beginning to end.
"Our brands already play an important role in consumers' lives, and we want to be part of even more of their experiences in the home," Savo said.
'Punching up' one another's products
Ultimately, companies use licensing to build both "buzz-worthy" collaborations and long-term sustainable businesses. Licensing is more than a collaboration idea; it's a route to market for a product. It requires having best-in-class manufacturing and understanding supply chain considerations, margin considerations and much more.
That's why extending a brand into new areas through licensing requires the right partners. With food partnerships, for example, Hershey tends to work with category captains that have meaningful retail relationships and distribution and that understand how licensing fits in with their overall portfolio.
"Picking the right partner is always the hardest part,” said Savo. "You have to have a strong relationship, and one that enables trust between the parties.”
You also have to have an opportunity to "punch up" one another's products, according to Savo.
Reese's Puffs cereal, for example, is a licensing success story partly because it "serves a unique function within General Mills' portfolio that's differentiated from other cereal brands,” Savo said. The addition of Reese's peanut butter to General Mills' product helps the combined licensed cereal to deliver something different to consumers. ("If it was overlapping and right on top of Cocoa Puffs, it wouldn’t have existed for over 25 years," Savo said.)
Reese's Puffs, and other Reese's licensed items, ultimately help sell Reese's candy, too.
"A shopper's engagement with licensed products like Reese's Puffs cereal likely reminds that consumer that they're craving Reese's," Savo said. "That engagement turns into conversion. We've found that around 80% of buyers who purchased a Reese's licensed product also purchased a Reese's candy product," Savo said.
As a $2 billion confectionery brand, Reese's itself is the No. 1 brand in its category and the third-largest consumable brand in the U.S. But Reese's is much more than a candy brand: It’s a $175 million cereal business, a nearly $50 million co-branded cookie business, and a newly launched refrigerated-dessert business, too. The power of licensing—which gives consumers more touchpoints with a brand they know and love—is what has turned Reese's into a mega-brand franchise.
"Overall, licensing has been a key component to having the Reese's brand become much bigger than itself," said Savo.