Winners in the F&B sector after tough year

While giants such as Coca-Cola, Nestlé, Yili and Lindt came out relatively unscathed, the majority of F&B subsectors recorded cumulative brand value losses this year as the sector battles the COVID-19 pandemic, according to the Brand Finance Food & Drink 2021 report.

Soft drink brands declined significantly, with the total value of the world’s top 25 most valuable soft drinks brands dropping by 6%, from US$114.8 billion in 2020 to US$107.5 billion in 2021.

The total brand value of food and chocolate brands has declined by 4% and 3%, respectively. The only subsector in the report to protect itself from a brand value loss is the dairy sector, which has maintained its total brand value year-on-year.

“The COVID-19 pandemic has put a huge amount of pressure on the food and drink industry globally, from disrupted supply chains and panic buying to a complete change in consumer habits,” said Savio D’Souza, Valuation Director, Brand Finance.

“The result of this has led to the majority of brand values suffering this year across the sector. The future is not bleak; however, brands with high levels of familiarity and reputation are likely to bounce back successfully as we begin the return to normality.”

Soft drinks: Coke still king

Coca-Cola has once again taken out the world’s most valuable soft drink brand, despite recording a 13% brand value decline to US$33.2 billion. Coca-Cola maintains a healthy lead over rival Pepsi, sitting second with a brand value of US$18.4 billion.

In addition to measuring 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 also the world’s strongest soft drink brand — and the fourth-strongest brand in the world according to the Brand Finance Global 500 2021 ranking — with a Brand Strength Index (BSI) score of 91.7 out of 100 and a AAA+ brand strength rating.

The report projects Coca-Cola’s global dominance with 1.9 billion servings being drunk across 200 countries every day. Despite its success, it still suffered during the pandemic with the multinational forced to restructure and cut over 2000 jobs.

When looking at the brand portfolios across the food and drink sector, The Coca-Cola Company’s portfolio claims third position with a cumulative brand value of US$48.6 billion. PepsiCo’s portfolio sits in second, with a total brand value of US$59.3 billion.

Dr Pepper and Red Bull have also posted decent annual results, recording a 40% and 15% brand value increase, respectively.

Nestlé dominates food sector

Nestlé (brand value US$19.4 billion; BSI score 86.4 out of 100) has taken out the world’s most valuable and strongest brand in the Brand Finance Food ranking out of 100 brands.

Despite the pandemic, the food giant has posted its third consecutive year of organic growth, profitability and return on investment capital.

According to Brand Finance’s Global Brand Equity Monitor, Nestlé has increased its scores in the consideration metric, as well as improving its score for the community and environment metrics under the CSR measurement. With a continued focus on product innovation and R&D, Nestlé is spearheading changes to reflect the current consumer trends, from its product Smarties becoming the first major global confectionery brand to switch to recyclable paper packing to announcing the launch of a vegan KitKat.

The Nestlé portfolio is also the most valuable food and drink portfolio, with a total brand value of US$65.6 billion. Despite the parent company underperforming compared with the previous year, it has been offset by the overperformance of some of its sub brands, particularly in the pet care and non-alcoholic drinks segments.

Dairy: Yili goes from strength to strength

Chinese giant Yili is the most valuable dairy brand, posting an 11% increase in brand value this year to US$9.6 billion and pulling further ahead of previous sector leader Danone (up 5% to US$8.2 billion) in second place. Yili also claims second spot behind Nestlé in the Brand Finance Food 100 2021 ranking.

Yili has boasted strong sales growth, up 13% year-on-year, and the long-term forecast for the brand looks positive. The dairy giant has been striving towards new products and optimisation, bolstered by innovation and long-standing R&D investment. This, paired with further expansion into new territories across Asia and overseas, has supported the brand’s strong growth.

According to Brand Finance’s Global Brand Equity Monitor, Yili scores very high for consideration compared to its peers. These solid results could be due to the brand’s focus on raising brand awareness, most notably through the sponsorship of the 2008 Beijing Olympics.

Yili has the fourth most valuable dairy portfolio with a total brand value of US$9.6 billion, behind the likes of Lactalis and Nestlé.

Chocolate: Lindt takes out most valuable chocolate brand

Swiss confectionery company Lindt is the world’s most valuable chocolate brand, according to the report, recording a 21% brand value increase to US$3.1 billion. As with other chocolate brands globally, Lindt’s operations have taken a hit amid global lockdowns, particularly from those that have taken place over Easter and Christmas. That being said, Lindt has outperformed its peers, gaining market share in nearly all of its markets and posting strong results in the premium segments.

Cadbury’s is the only other chocolate brand to record a brand value increase this year, up 5% to US$2.5 billion. Owned by Mondelēz International and sold in over 30 countries — with its top three markets the UK, Australia and India — Cadbury’s has reaped the benefits of increased spending on its products during the pandemic.

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