Coca-Cola is entering into a licensing deal allowing two of its products’ logos, Minute Maid and Simply, to be used on select produce distributed by Frutura’s Dayka & Hackett brand. This is the first time Coca-Cola has granted a license within the fresh produce category.
In the U.S., Simply Select will be used on D&H fresh citrus while Minute Maid will adorn D&H grapes. Minute Maid also will be used on D&H fresh citrus and grapes in Japan. Products bearing Coca-Cola’s Simply Select will begin appearing at retail before July and Minute Maid products will follow.
Once an afterthought for many multi-billion-dollar food and beverage manufacturers, brand licensing deals are rapidly evolving into a lucrative source of revenue for CPGs aiming to grow their business, build equity and maintain or expand a product’s relevancy.
Beyond its iconic products, brands in Coca-Cola’s expansive portfolio have made their way into non-beverage offerings such as candy, clothing, drinkware, home decor and apparel. But the move into fresh fruit is an entirely new way to expand the reach of the valuable trademarks.
In this case, Coca-Cola is choosing not to tap into brands such as Sprite, Coca-Cola or Fanta that are associated with sugar. Instead, the Atlanta-based beverage is licensing better-for-you juices in Simply and Minute Maid and bringing them to a logical extension in fresh fruit. No financial details of the transaction were publicly disclosed.
“Our company is committed to serving the consumer with superior products at every part of their day,” Kayla Carlucci, associate licensing manager with Coca-Cola, said in a statement. “When we consider licensing one of our brands, the quality of the product that will bear our name is paramount as is the quality control the licensee exercises at every step along the supply chain.”
For Coca-Cola, the beverage company’s Simply and Minute Maid brands get product recognition in a section of the grocery store where they have traditionally been absent: fresh fruit.
The recognition also might help boost sales of Coca-Cola’s original juice offerings. A shopper might see a bag of grapes with the Minute Maid logo or a lemon with Simply and decide to purchase one of those juices later on simply because they saw the fruit. The connection with fruit also helps elevate the healthier perception a consumer might have of these Coca-Cola products.
Founded in 2005, D&H is a California-based grower, packer and distributor of premium fruit. The company handles citrus fruits such as clementines, lemons, limes, oranges and mandarins. In grapes, it works with green, red and black seedless. The use of the Coca-Cola trademarks instantly gives the D&H produce additional brand recognition as it competes with other fresh produce companies.
“Partnering with the iconic Coca-Cola Company, and their globally recognized and respected brands, is a transformative moment for our company and for Frutura,” said Tim Dayka, CEO of Dayka & Hackett, who crafted the licensing agreement on Frutura’s behalf. “This will allow us to increase our market penetration in a meaningful way, as these brands resonate so strongly with the discriminating consumer.”
The risk for Coca-Cola is if there is a problem associated with fruit, such as a recall or difficulties with product quality, that has the Simply and Minute Maid logos on them that could reflect negatively on the brands themselves, hurting sales of the original products.
Still, licensing has several advantages that outweigh the risks. Brand licensing is typically faster and less costly than if a company decided to develop a product from scratch, while allowing each partner to piggyback on the benefits of the other — such as a brand name, experience making or marketing a certain product, understanding how to reach a specific consumer and industry connections.