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Minions Mean Big Business for Universal as ‘Despicable Me’ Stars Break Out

Family franchise has instantly made studio a major player in lucrative animation game.

For an early poster teasing “Despicable Me 2,” Universal Pictures went with a more minimalist approach: two Minions stand above the date July 2013. It didn’t need to say more because since the first film hit big in 2010, the yellow Twinkie-shaped characters have not only helped launch Universal’s first family franchise in well over a decade, but also made it a major player in the animation game.

They’ve broken out as such big stars — make that important spokes-characters — for the company that the Minions have their own short film series, theme park attractions, a consumer products line that includes toys, games and apparel, and will get their own movie spin off in 2014. They even have their own blimp.

Growing their global appeal over the past three years has now paid off for Universal as it revs up its marketing machine for the “Despicable Me” sequel, out July 3 from Chris Meledandri’s Illumination Entertainment.

Thanks largely in part to the Minions, Universal has lined up brands from McDonald’s and General Mills to Progressive Insurance and Frito Lay, who plan to roll out the studio’s largest worldwide campaign ever planned with promotional partners for one of its films. Other partners include the U.S. Department of Health and Human Services and the Ad Council who together will launch a responsible fatherhood campaign, Land O’Frost, Bazooka Candy, UHU glue, Kraft, Nestle, Energizer, Kingston, Arcor and Danone.

Overall, the companies are expected to spend more than $254 million traditional media like TV, print, radio, outdoor, in-theater, in-store and online ads. But that is expected to add up to even more in value once you consider the amount of consumer packaging — including boxes of Lucky Charms and Honey Nut Cheerios cereal, Cheetos snacks and half a billion Chiquita bananas — the Minions will appear on in the coming weeks.

To put the importance of the Minions to marketers in perspective consider this: McDonald’s and General Mills have not been associated with any of Universal’s movies since 1993’s “Jurassic Park.”

What’s attracted both moviegoers and marketers is the broad appeal of “Despicable Me.”

“This film has completely broken out of the family film template; it appeals as much to teen boys as it does to eight-year-old boys and adults with kids and adults without kids,” says Stephanie Sperber, president of Universal Partnerships and Licensing. That’s clearly seen in the array of promo partners, with McDonald’s looking to move toy filled Happy Meals to kids as Progressive aims to sell insurance to first time drivers.

The involvement of the brands is seen as key in helping Universal build a franchise that it hopes will help boost the bottomline of the studio’s various divisions — from theatrical to theme parks — over the next 10 years.

The traffic that flows into a Walmart, Toys R Us and McDonald’s each day, for example, is expected to generate billions of impressions for “Despicable Me” “that makes a statement in the culture that is incredibly valuable in the overall marketing campaign” of the sequel, Sperber said. “You can’t write a check and buy” that kind of exposure, she adds.

But in building its Minion business, Universal is looking far beyond the U.S.’ borders. Again, the Minions will do much of the heavy lifting, considering they translate easily across the world. The characters don’t speak English but a form of gibberish that is understandable given their expressive faces and comic movements.

The first film played strongly in foreign territories like Latin America, a region known to favor family films, and earned $292 million overall. Kellogg’s is expected to launch a heavy promo in 15 Latin American countries for the film, as a result.

“There’s still room for growth in other parts of the world,” Sperber said

There’s also a lot more room to grow “Despicable Me’s” consumer products biz, which was limited to just T-shirts and plush figures around the first film, given it wasn’t based on a known property.

“With the second one you have an opportunity to grow the program in the way you want it to grow,” Sperber says, and grab a larger piece of the $5.3 billion in royalty revenues the licensing industry generates each year.

The $543 million worldwide box office haul (and $320 million in home entertainment sales, also global) of the first film enabled Universal to significantly expand its product push around the sequel, which now has toymakers Hasbro and Thinkway on board, who are making versions of Monopoly and Operation designed around the Minions along with a banana-scented fart blaster gun that Toys R Us will sell exclusively. Universal’s theme parks also get their own exclusive merchandise. Illumination created an even bigger opportunity for Universal with the introduction of the evil purple Minions in the new film.

As a result of the merchandise deals, studio is expected to generate around $200 million in retail sales over the next three years, a notable sum when you consider Universal hasn’t been in the toy business since 2005’s “King Kong.”

On the digital front, Universal also has inked a deal with French gamemaker Gameloft, who will launch a free-to-play mobile game in June that was developed with Illumination.

While studios are flooding the market with mobile games based on their properties, Universal chose to launch just one around “Despicable Me 2” for smartphones and tablets that introduce new Minions and villains.

“We wanted to have one icon in the app store and not 12 different Minion apps running around,” Sperber says, although the game will still be customized into nine different languages.

Despite their popularity, “Despicable Me” is more than just the Minions, however.

The films’ Gru, an anti-villain voiced by Steve Carell, and his adopted daughters have also been embraced by moviegoers and marketers, who will feature the characters in their campaigns through custom animation created by Illumination.

“Yes, the Minions are front and center across our marketing programs; they’re so iconic and adorable,” Sperber says. “But the Minions by themselves wouldn’t be as important were they not tied to the heart of the story of Gru and the girls. (“Despicable Me”) is a story about family. The Minions happen to be the wacky part of the family.”

But it’s the Minions who brand reps are clearly gravitating towards.

In planned ads from Progressive, for example, the insurance firm will pair up the Minions with its own spokes-character Flo, who has starred in 91 of its TV spots over the past five years. While Progressive partnered with Disney and Sega on “Tron: Legacy” and the 20th anniversary of Sonic the Hedgehog, in the past, the Minions will enable the insurance company to “bring our character to life and reach a more sophisticated audience than we normally go to,” which is 18-34 year olds, according to Bruce Perlman, director of integrated marketing communications for Progressive. “It gives us an opportunity to talk to parents.”

The Minions are also paired up with Frito-Lays’ Chester Cheetah’s character in ads.

All of this cross-over potential clearly signals Universal and Illumination (also behind “Hop” and “Dr. Seuss’ The Lorax”) have no plans on retiring its mischievous Minions anytime soon.

“They’re obviously incredibly important,” Sperber says. “We took a big risk starting up an entire animation business from scratch. The fact that it was successful globally was nice validation of that decision. The goal was not to cash out (with media partners and a heavy product push) but to grow the franchise.”

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