Coca-Cola and Nestlé have emerged as the most valuable brands in the food and drinks sector in 2020, according to the latest Brand Strength Index report from Brand Finance.
Coca-Cola retained the top spot as the world’s most valuable soft drinks brand, with a 5% year-on-year increase in brand value to $37.9 billion in 2020.
PepsiCo came in second with a brand value of $18.9 billion, up 2% year-on-year, from $18.5 billion in 2019.
Coca-Cola also scored a 90.9 out of 100 in the Brand Strength Index, corresponding to an elite AAA+ brand strength rating, making it the world’s strongest soft drinks brand.
Brand Finance’s Brand Strength Index determines the relative strength of brands based on a balanced scorecard of metrics that include marketing investment, stakeholder equity, and business performance, the report said.
'Steepest Drop In Quarterly Sales'
However, Coca-Cola witnessed the steepest drop in quarterly sales in over 25 years, due to the closure of bars, restaurants, and cinemas across the globe to contain the spread of the COVID-19 pandemic, the study pointed noted.
Valuation director of Brand Finance, Savio D'Souza, stated, “The pandemic has dented Coca-Cola’s once-solid reputation as being a recession-proof brand. While this can be put down to extraneous impacts, its fierce rival, Pepsi, has fared relatively well.”
Most Valued Food Brand
Elsewhere, Nestlé topped the list of most valued food brands, with a 3% increase in brand value to $20.3 billion.
The company attributed its performance to strong organic growth, following a solid performance in its key US market.
The brand has implemented market-leading, high-speed innovation and has recently rolled out its premium Starbucks products.
It has also capitalised on the ever-growing demand for vegan and vegetarian by developing its plant-based offering, the report said.
D'Souza commented, “Nestlé’s response and resilience to the COVID-19 outbreak has demonstrated why the brand is truly a leader both on home soil and globally. Posting solid growth in a time of turmoil is a testament to the agility and strength of the brand.
“With Brand Finance calculating that the food industry is one of the few sectors that should see limited impact from the pandemic, Nestlé certainly seems to be in a strong position to weather the storm.”
Most Valued Food And Drinks Portfolios
Nestlé also aced the list of the most valued food and drinks portfolios with a cumulative brand value of $68.5 billion
PepsiCo emerged above Coca-Cola in this list in the second position with a brand value of $62.05 billion, up 5.3% year-on-year.
Coca-Cola Company’s portfolios came in third, with a brand value of $55.73 billion (+3.9% year-on-year).
D'Souza explained, “On a portfolio level, PepsiCo continues to pull ahead of Coca-Cola in terms of brand value and strength. Management is making the right calls to cull zombie brands and refocus on the strong master brand, and a streamlined portfolio.
“Moving forward, Coca-Cola will need to react to the pandemic with consistent innovation, marketing efficiency and effectiveness in line with its recent reorganisation of the business.”
Asian diary firm Yili witnessed an impressive brand value growth of 13%, to $8.6 billion, in 2020, to become the most valuable dairy brand in the world, overtaking Danone.
Commenting on Yili’s performance, D'Souza said, “As a brand committed to continuous innovation in the industry, it is unsurprising that Yili has managed to continually achieve its expansion goals this year, even despite the COVID-19 pandemic.
“In the coming year, Yili’s strong strategy of innovation is set to be the brand’s core power for growth in the future.”
The study also noted that Japan’s Kikkoman climbed 12 spots in the Brand Finance Food 50 2020 ranking, from 34th to 22nd position, growing by 36% to $3.0 billion.
Kikkoman, one of the top names in the soy sauce business, also claims the biggest share of Japan’s domestic soy sauce market, the study found.
Indian dairy brand, Amul, emerged as the fastest-growing dairy brand in 2020, with a 25% growth in brand value to $3.1 billion.
Amul has focused on diversifying its portfolio, launching the Tru range and improving its infrastructure.
Its recent solid financial performance has been attributed to growth in sales in rural areas, the report added.