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Chinese company Yili is catching up to French dairy giant Danone on the global stage with a 24 percent brand value increase, according to independent brand valuation consultancy, Brand Finance. Its Food & Drink 2019 report includes the world’s top 50 most valuable food brands, top 25 most valuable soft drink brands and the 10 most valuable dairy brands. Coca-Cola retains its status as the most valuable soft drink brand, and Nestlé holds on to its position as most valuable food brand, while also having the largest portfolio at over US$70 billion. Kraft, Unilever and Heinz have all seen a dro in brand value, while Quaker is the fastest growing top 50 food brand, rising 57 percent. Other Chinese companies, including Haitian and Want Want, are also on the rise.
“Fellow Chinese brands, Haitian (brand value US$3.3 billion) and Want Want (up 50 percent to US$3.0 billion) are standout brands in the ranking. Haitian, the highest new entry into the food ranking in 16th position, is a leading brand in the Chinese condiment and sauce industry and has emerged as a brand to watch following the brand’s exploitation of the booming Chinese catering industry,” David Haigh, CEO of Brand Finance, tells FoodIngredientsFirst.
Want Want is one of the fastest-growing brands this year. It has expanded its point of sales by utilizing the vending machine channel to supplement its online and offline offerings.
Danone and Yili place second and third respectively in the overall food ranking and are at the top of the dairy ranking. Yili seems set to overtake Danone, with the company rising in value to US$7.7 billion, while Danone dropped 10 percent of its value to US$8.1 billion.
“Yili has recorded impressive brand value growth over the last couple of years, which is not surprising considering the current boom in the Chinese dairy market. Yili’s financial performance is the primary reason for the increase in its brand value and brand strength, both of which continue to remain on an upward trajectory. A large amount of the group’s success can be attributed to its three key brands – Yili, Amsion and Satine – which contribute over 72 percent of the group’s sales,” Haigh explains.
Additionally, Yili has been Asia’s most valuable dairy brand for the past four years and is continuing to push forward on its global expansion program, with a recent purchase of Thailand’s Chomthana and Westland Cooperative Dairy Company, New Zealand’s second largest dairy producer. The company aims to target two billion consumers at home and abroad by 2020. “The brand prides itself on its innovation and has recently opened the doors to a new state-of-the-art facility in the Netherlands,” Haigh adds.
As there is a correlation between a country’s GDP and dairy consumption, China’s expanding middle class has gone hand-in-hand with an increased demand for dairy, Haigh continues. “Social changes within the country, especially urbanization, have also contributed to the rapid expansion of the dairy market. Urban citizens eat fewer staple grains and more animal and dairy products than those in rural areas, and as more of the population migrate to the cities, their changing diets are fuelling the dairy boom.”
Coca-Cola is strongest brand and other key findings
Aside from just calculating the overall brand value, the report also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity and business performance. Coca-Cola, which is valued at US$36.2 billion, received a Brand Strength Index (BSI) score of 89.94 out of 100 and a corresponding AAA+ brand strength rating.
“The Coca-Cola brand is the strongest brand across the entire food and drink sector. This highlights the brand’s dominance, outside of purely the soft drink sector, a sector the brand is synonymous with. The brand is able to rely on the sheer volumes of sales of its beverages, a staggering 1.9 billion servings across 200 countries, are drunk each day. The brand’s commitment to evolving to the ever-changing tastes of its consumers contributes to its position as the world’s strongest food and drink brand,” notes Haigh.
Meanwhile, Pepsi in second place saw an 8 percent dro in brand value to US$18.5 billion. However, PepsiCo continues to be the second most valuable food and drink portfolio following a 7 percent increase in total brand value to US$58.9 billion. This follows the company’s acquisition of SodaStream for US$3.2 billion last year.
Despite a brand value increase of just 1 percent, Nestlé is still at the top of the food ranking with US$19.6 billion, thanks to its successful capitalization on the vegan trend, as well as its acquisition of the rights to sell its products under the Starbucks brand name.
Kraft (down 7 percent to US$4.5 billion), Heinz (down 14 percent to US$3.3 billion) and Unilever (down 5 percent to US$4.2 billion) have all seen a decline in brand values, with Unilever and Heinz falling out of the top 10 food ranking entirely. This comes after The Kraft Heinz Company’s failed acquisition of Unilever in 2017 led to Kraft using aggressive cost-cutting measures.
Canadian frozen food producers McCain has had its first entrance to the food top 10, following a 25 percent increase in brand value to US$4.7 billion. Additionally, the sector’s fastest-growing brand is PepsiCo-owned porridge label, Quaker, which saw an increase in brand value to US$3 billion.
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