Coca-Cola has retained its position as the world’s most valuable soft drinks brand after recording a 19% increase in value to US$36.2bn, according to the latest report by Brand Finance, an independent brand valuation consultancy.
The brand further widened its lead, after second-placed Pepsi suffered an 8% drop in brand value to US$18.5bn.
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. According to these criteria, Coca-Cola is the world’s strongest brand across the food and non-acholic drink sectors with a Brand Strength Index (BSI) score of 89.94 out of 100 and a corresponding AAA+ brand strength rating.
The brand’s recent success can largely be attributed to the uplift in sales of Diet Coke, following a slump lasting several years, as a result of successful marketing and rebranding campaigns.
As with all soft drink brands across the sector, Coca-Cola has had to contend with the perpetual decline in sales, as well as the issues arising from the increase in health-conscious consumers and governments imposing taxes on sugar-laden products.
David Haigh, CEO of Brand Finance commented: “The soft drinks sector is facing scrutiny like never before in the Western world. From high sugar content causing a stir, to the backlash over single-use plastic, brands are having to think fast to meet changing needs and circumstances. Although Coca-Cola always has its sheer volume of sales to rely on, the brand needs to evolve with society if it wants to maintain its dominance in the sector.”
Meanwhile, Nestlé topped the food ranking, although its brand value increased by just 1% year-on-year to US$19.6bn. The brand celebrated a boost in organic growth, following stronger performances in the brand’s two largest markets, China and the US.
Brand Finance highlighted that Nestlé has continued to innovate in order to meet the ever-changing consumer trends and has capitalised on the popular vegan and vegetarian movements. The company has also recently bought the rights to sell its products under the Starbucks brand name, opening up opportunities globally through Starbuck’s power as the world’s biggest coffee chain operator.
The likes of Kraft (down 7%), Unilever (down 5%), and Heinz (down 14%) have all suffered from a decline in their brand values, with Unilever and Heinz falling out of the top 10 in the food ranking.
Following The Kraft Heinz Company’s failed acquisition of Unilever in 2017, Kraft has undertaken aggressive cost-cutting measures, resulting in significant loss of revenue. Unilever, whilst faring better than Kraft following the failed takeover, has faced scrutiny from stakeholders amid the now-abandoned plans to move its HQ to the Netherlands.
Across the sector, Brand Finance highlighted there are some standout brands that have either entered the rankings for the first time or have recorded significant growth in brand value.
Canada’s McCain has entered the food top 10 for the first time (up 25% to US$4.7bn). A global leader in the frozen food market, the brand has expanded several of its flagship plants in order to meet growing demand. McCain has also widened it global footprint, acquiring a 49% stake in Brazil’s Forno de Minas.
PepsiCo-owned porridge brand Quaker is the sector’s fastest-growing, recording an impressive 57% increase in brand value to US$3.0bn. Expanding beyond traditional porridge, Quaker has managed to take the humble oat and launch a wide variety of new products, including flavoured oats and overnight oats.
Chinese brands Haitian (brand value US$3.3bn) and Want Want (up 50% to US$3.0bn) are also 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. Want Want is one of the fastest-growing brands this year. It has expanded its point of sales, now utilising the vending machine channel to supplement its online and offline offering.
Meanwhile, recording a better performance than its flagship brand, PepsiCo retained its position as the second most valuable food and drink portfolio, following a 7% increase in total brand value to US$58.9bn. A lot of its brand portfolio growth is coming from food brands. In soft drinks, in turn, PepsiCo’s strategy has been to widen its offering to include more flavours and to offer low-calorie alternatives to all its major drinks.
Coca-Cola, sitting in third, has seen a 19% jump in its portfolio’s brand value to US$53.6bn, further closing the gap behind PepsiCo. In 2018, Coca-Cola bought Costa Coffee from Whitbread, launching Coca-Cola as the biggest coffee shop owner in the UK with 4,000 shops in its portfolio.
Coco-Cola’s ambition to evolve into a total beverage company, moving beyond fizzy drinks, is well underway with acquisitions completed of the Australian kombucha maker, Organic & Raw Trading Co, and through pipeline launch plans of the company’s first alcoholic and energy drinks.
