How do you convince customers that you have a high-quality product and can provide top-notch service?
One way is to partner with an established and respected multinational brand and to allude to that well-known brand in marketing materials or on packaging.
It is similar to how computer-makers with lesser- known brands have long touted the fact that their products have “Intel inside.”
“It’s crazy for a large international brand to not want an association with a small business if they are confident that the entrepreneur produces a quality product. It’s free distribution of the trademark, which has to be a good thing,” said Ben Hume, who is on the board of the Canadian Manufacturers and Exporters.
Large and respected brands, however, usually want more than the free distribution of their trademark. They also may charge a marketing fee, said Ann Kirsebom, whose Chef Ann Kirsebom Gourmet Sauces/BBQ Ltd. has made a range of cooking sauces that include liquor for the past decade.
She is one of many small-business owners who have reached agreements with international brands as a way to boost their own sales.
Kirsebom tried for years to be able to put a well-known tequila brand on her popular Tequi-Lime sauce, but executives at her tequila producer did not seem interested.
Then, out of the blue, representatives at the prestigious French liquor house Grand Marnier urged her to make a sauce with their product.
“They basically approached me because all of my current sauces have alcohol in them,” said Kirsebom. “They wanted to enter into licensing agreements with companies that use their products.”
Kirsebom created a recipe for a savoury cooking sauce that includes Grand Marnier, and she agreed to pay a small licensing fee that she said is “worth its weight in gold.”
In exchange, she can:
- put an image of the iconic Grand Marnier bottle on her sauce;
- put a giant Grand Marnier bottle on her table during trade shows; and
- potentially provide tiny bottles of her sauce to be attached to Grand Marnier bottles in liquor stores.
Kirsebom plans to soon release a cranberry-onion confit that includes Grand Marnier, as well as two new chocolate sauces that include both Grand Marnier and chocolate made by international chocolate giant Barry Callebaut Group.
She has reached a similar agreement with Callebaut to be able to display that iconic brand on those sauces alongside the Grand Marnier logo.
“Grand Marnier said it was OK to have Callebaut on the label,” Kirsebom said. “They have been great people to deal with.”
Other entrepreneurs have similarly aimed to cash in on an association with an international brand that charges them a licensing fee.
Farshad Shafiekhani and partner Bas Yavarian opened their C:EHKO-branded hair boutique in the Wall Centre complex on Hornby Street last week.
C:EHKO is a German hair-care brand well known in Europe that has ambitions to boost its North American presence.
It has a wider range of hair-care products than does American giant Joico and local competitor AG Hair Cosmetics, Shafiekhani told Business in Vancouver.
He also touted C:EHKO’s high quality.
The benefit of the men’s partnership with C:EHKO is that future loyal customers of the C:EHKO brand will essentially be a captive market because they will only be able to buy the products at the men’s salon.
Shafiekhani said that another positive aspect of the deal for him is that he is the exclusive Canadian distributor of the products. So, he gets to approve any new C:EHKO salon operators in Canada to ensure that they operate quality salons.
He equates the potential future growth of C:EHKO to that of Minnesota-based Aveda, which has a salon on Granville Street.
“Aveda’s vision was to open salons across the country selling only their product,” Shafiekhani said. “Twenty years ago, when Aveda approached distributors in North America, they were turned down. Now, they’re one of the giants in the hair-care industry.”