P&G sees licensing success

21 March 2012

CINCINNATI: Procter & Gamble, the FMCG giant, is generating significant revenues through licensing some of its brands and technologies to other firms.

The owner of brands including Tide and Pampers has pursued this approach for hundreds of patents and numerous extensions to ranges like Febreze and Mr Clean, as well as allowing third parties to develop new lines.

P&G now derives more than $3bn in returns as a result of these efforts, and has done so for each of the three years since it started tracking such data.

During late 2009, Nehemiah Manufacturing, established by former P&G employees, licensed Pampers Kandoo, a selection of shampoo, soap and related offerings for children.

Nehemiah Manufacturing has cut costs by $1m, changed logistical structures, modified the brand's packaging and ramped up its focus on social media, doubling revenues following a relaunch in 2010.

"[Pampers Kandoo] had gotten lost in the larger P&G Pampers portfolio," Richard Palmer, the president of Nehemiah, told the Wall Street Journal.

Similarly, P&G gave Kaz USA permission to license the Febreze name for a fan that keeps the air fresh in January 2012. Kaz USA already makes Braun and Vicks electronic appliances under parallel deals.

In 2011, the Scope Outlast Minibrush, which does not need water to use, was rolled out via a tie-up with OraLabs. During the last five years, Beanstalk has made several products linked to P&G brands, like Covergirl sunglasses and MaxFactor make-up tools.

Febreze Air Filters, launched 12 months, were developed thanks to an equivalent alliance with Imagine One Resources. They beat first-year targets by 200%, and are now on sale in Canada.

"Small guys like us help contribute ideas to their core business," Bob Lackey, the chief executive of Imagine One Resources, said.

Akebia Therapeutics has also secured access to some drug technologies which P&G retained after selling its prescription drug arm to Warner Chilcott in 2009.

The products Akebia Therapeutics is working on include those for diabetics who are suffering visual problems and pills to treat anaemia. "Procter didn't have the patience and investment profile for this," Joseph Gardner, its founder, said.

Data sourced from Wall Street Journal; additional content by Warc staff