In addition to last week's deal with Kellogg Co. for co-branded cereals, Pop-Tarts and Eggo waffles and its earlier deal with Coca-Cola Co.'s Minute Maid to produce an extensive line of juices and juice drinks out this month, Disney Consumer Products president Andy Mooney said the division is negotiating with marketers in "other categories equally important to kids and parents," among them salty snacks, biscuits and personal care.
The deals, those already announced and those expected to come within the next six to nine months, are part of a new business model Mr. Mooney has created to turn around the ailing licensing division of the Consumer Products unit. Instead of simply continuing to secure short-term promotional licenses around its newest theatrical releases, the division has taken a page from its more successful publishing and interactive brethren to develop customized offerings for major marketers in the packaged goods arena as well as in toys and clothing.
"The trick was really to transform the business that we called licensing to operate with the same culture and orientation that publishing and interactive do," Mr. Mooney said. He pointed to those divisions' heavy involvement in product creation, strong relationships with major retailers and alliances with major players-Random House in the case of publishing and Sony Electronics in the case of games.
To extend Disney's everyday presence in food and beverages-where the entertainment and media giant has had no larger than a 3% share in any given category through mostly short-term promotional alliances-Mr. Mooney went to outside "product incubator" company AmeriKid Foods to develop fully executable concepts for co-branded products in the top kid categories.
"When we sit down with world-class companies, we're not coming to them with vague concepts, we're coming to them with finished turnkey products that are innovative and manufacturable, with packaging where the characters' properties are woven into the product proposition," Mr. Mooney said.
Disney's new product development strategy not only helps it win new partners, which can more easily visualize potential products through realistic mock-ups, but it also helps marketers get new products to market faster. Minute Maid signed its contract with Disney at the end of February and starts shipping its 18-variety line of Disney Xtreme! Coolers based on Mickey and Friends and Disney Hundred Acre Wood 100% Juices based on Winnie the Pooh later this month. Kellogg, which announced its deal early last week, will launch its extensive number of co-branded cereals, toaster pastries and waffles by early next year.
"Speed to market is a competitive advantage these days," said Rick Zuroweste, director of innovation for Minute Maid. Mr. Zuroweste said, based on retailer reaction, he expects the Disney line to give Minute Maid a leg up in kid juices over Philip Morris Cos.' Kraft Foods, and Kraft has reacted quickly by stepping up launch plans for what was supposed to be a minor test of Kool-Aid in pouches.
For Kellogg-which is also in discussions with Disney to extend the partnership to its Keebler cookies and crackers-the illustrated mock-ups helped clinch a deal far larger in magnitude than what it typically negotiates. Kellogg has worked with Disney and other studios on limited-time promotions and will continue to do so-such as its upcoming launch of two new cereals based on News Corp.'s Fox network series "The Simpsons"-but the permanent items it plans to launch with Disney will get an incremental amount of advertising and attention.
"This is a really an exciting initiative for us and our attitude is that we're going to do this right," said Jeff Montie, president of Kellogg's Morning Foods division.