LICENSING PRODUCT TIMES (Winter 1991)

Old Farmer's Almanac Opens New Licensing Market

reported by Charles M. Nelson

In the aftermath of Licensing '91, many experts could be heard complaining that property licensing was suffering from too much of a "muchness:" too many fads and too few stable properties, too many competing characters and brands chasing too few products. So it's refreshing to hear the storyof the Old Farmer's Almanac licensing program, a relative newcomer with a fresh and highly successful apaproach.

Founded in 1792, the Almanac is the oldest continuously published periodical in North America and has one of the oldest trademerks in use today. But it was not until 1989 that the Almanac began to license its marks. Its debut in the world of licensing was entrusted to Mr. Gordon Howard, pres;eident of International Licensing Management, Inc. (ILM), of Balmville, NY. From the outset, it was clear that great care was needed to match the Almanac with appropriate products. Its circulation of more than six million is based on a readership that actually uses the Almanac and takes its advice seriously. This relationship makes the trademark a highly desireable property with tremendous licensing potential, but also leaves it particularly vulnerable if it becomes associated with an inferior or unreliable product. Also, any endorsement of a product falling outside the Almanac's perceived expertise might provike consumer skepticism.

Careful research convinced ILM that it should avoid short-term fads and concentrate on long-term, stable licensees with quality products for the kitchen and yard. This was not easy since much of the product spectrum was outside traditional licelnsing venues. Indeed, corporate licensing was unheard of in the lawn and garden industry. Initially, manufacturers greeted ILM's licensing proposals with implacable skepticism; it took months to bring on board Anchor Swan of Worthington, OH, manufactuarers of garden hose. This produce was a great success and led the following year to the addition of The American Seed Company (flower and vegetable seeds), Ideal Technologies (organic fertilizer) and Pennington Enterprises (bird and grass seed). None of these companies previously marketed their products under license. They are the opening wedge for a new growing licensing genre, contributing to the growth of license diversity as well as licensed product revenues.

And how do you sell companies on the idea of licensing in a market where it is untested? According to Howard, it takes a carefully planned, persistent campaign. You must understand and carefully document the strnegths of the trademark, select compatible product lines in saturated market segments where association with a strong mark has real potential to capture market share, and select companies that are investing in marketing strategies which can be strengthened by association with your mark. You must tailor your presentation to each coompany you apoproach. Once successful, you must use that success to reopen negotiations with companies that would not take on a license in the absence of a clear track record. "In the beginning," confides Howard, "it was difficult to obtain a serious hearing, but now, after two years of hard work, potential licensees are approaching us in increasing numbers."

Foods and durable kitchen products present a more complex picture. Some product categories are traditional licensing venues while others are not. With such a mixture, it is less difficult to recruit licensees because close analogs usually exist. To date, 14 licensees have been signed on including breakfast cereals, beverages, honey, candies, kistchen containers and textiles, weather stations, laundry accessories and tableware. Of these, six have never sold their products under license and three have only limited past experience. This focus is deliberate. ILM philosophy is to concentrate on obtaining licensees who are interested in developing a long-term, stable relationship with the Almanac and will not be dividing their attention among several, possilby competing licenses. In return, ILM works with the Almanac to develop a host of value added services tailored to each product.

When asked how ILM provided this level of service to licensees and licensors, Howard emphasized that they only represented three to six lincnsors at any one time and concentrated on developing large, diversified portfolios of licenses. He wonders who firms who represent 20 to 50 lincensors could provide consistent, high level, conscientious service. Howard finds the question of conflict of interest particularly troublesome. A potential licensed product might be appropriate for a number of licensors, but available to only one. Any internal process ofr matching competing licensors with competing licensees is fraught with potential conflicts of interest. This problem is avioded by representing only a smallnumber of licensors whose trademarks appeal to different market sectors.