LIP-SMACKING NUMBERS

Among the stand-out trends in the latest Brand Finance report on food and beverage brands is the rise of emerging-market contenders, the strong performance of the dairy sector and, in SA, a decline of brand loyalty in tough times

Nestlé and Coca-cola are the world’s two most valuable food and beverage brands respectively, according to a report by brand valuation and strategy consultancy Brand Finance.

Valued at $19.4bn, Nestlé is more than double the value of second-ranked food brand Danone ($9.1bn). And despite a 5% drop to $30.4bn, Coca-cola once more comes in first among the soft-drink brands — more than $10bn ahead of Pepsi ($20bn).

Brand Finance CEO David Haigh says emerging-market brands are also starting to find global traction. The value of China’s largest dairy brand,yili, jumped ahead of international leaders such as Kellogg’s and Kraft Heinz.

Dairy is one of the strongest performing sectors in the food industry, registering an average 13% brand value growth year on year.

While scale and reach mean SA food brands are unlikely to ever crack the rankings, Brand Finance’s local director Jeremy Sampson says local food and beverage brands enjoy a degree of loyalty. But that is also under threat. “Rising costs are always an issue, particularly as we are all squeezed financially and customers are becoming more ‘promiscuous’ in their purchasing choices.”

Sampson contends that the Tiger Brands listeriosis crisishas also had an impa cton consumer confidence. “It’s not often brands get into this amount of trouble.”

Sampson says in order for local food and beverage brands to maintain an edge they also have to innovate and invest. Sometimes, he adds, brands just go to sleep and are underinvested in these important areas. He mentions soft-drinks companies Fever-tree and Schweppes as examples.

Are SA consume rsp atriotic about brands? “I don’t think so. Where you have choice, and the market leader edges up prices, you can simply dial down to a rival brand.” MMI Holdings has appointed three communications agencies to manage its public relations. Fleishmanhillard SA will manage the group’s corporate communications; MSL Johannesburg the brand communications for Momentum; and Eclipse the communications for Metropolitan, Momentum Short-term Insurance and Multiply, Momentum’s wellness and rewards programme.

MMI’S group head of marketing Nontokozo Madonsela says: “Our new partner agencies each demonstrated the expertise, industry knowledge and passion that we believe will help us communicate effectively with our stakeholders ... and strengthen the positioning of our brands in the hearts and minds of our key audiences.”

Monster ups and downs

While the top six soft-drink brands retained the same rank as last year, brands further down the table have undergone more change. Energy drink brand Monster registered the fastest growth in the top 10 (up 31% to $3.7bn), closely followed by Dr Pepper. Popular brands Fanta (down 12% to $2.6bn) and 7-Up (down 3% to $2.2bn) fell out of the top 10 thisyear.

Fastest-growing in thisyear’s Brand Finance soft-drinks 25 league table is Italian coffee brand Lavazza, up 34% to $1.2bn. Mirroring Lavazza’s success is another Italian brand, Ferrero. All of Ferrero’s major brandsrecorded significant year-on-year growth, with three making the Brand Finance Food 50 league table. Ranked 16th, Kinder is Ferrero’s most valuable and fastest-growing brand (up 41% to $3.1bn), while Nutella is a new entrant to the table, claiming 38th place.

“Brand value” is the net economic benefit a brand owner would achieve by licensing the brand in the open market.

“Brand strength” is assessed through a balanced scorecard of factors including marketing investment, stakeholder equity and business performance. It is used to determine what proportion of a business’s revenue is contributed by the brand.