Report: Nestlé, Danone and Yili are the world's most valuable food brands

Dive Brief:

Nestlé is the most valuable food brand in the world and has the largest global food and drink brand portfolio, according to Brand Finance's latest annual ranking report. Following the Swiss giant were France's Danone and China's Yili in the No. 2 and 3 spots, respectively.
Coca-Cola was ranked the most valuable soft drink brand, jumping 19% to $36.2 billion, while rival Pepsi dropped by 8%, Brand Finance said. However, PepsiCo's Quaker brand was listed as the fastest-growing food brand by global value. Quaker went from No. 35 of 50 food brands last year to No. 21 this year, leaping 56.8% in value to $3 billion, Bakery and Snacks reported.
The brand value of Kraft, Unilever and Heinz all dropped in the latest rankings, the report found. But other U.S. brands showed strength in this year's report, with Kellogg's, Lay's, Doritos and Campbell's joining Quaker with improving brand value.

Dive Insight:

Brand Finance defines brand value as the worth of a trademark and associated marketing within business. Brand is further defined as "a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits."

Nestlé was also deemed the most valuable global brand in 2018, so clearly the Swiss giant has retained its value. It didn't see much growth, however. Its brand value increased just 1.4% to $19.6 billion, Brand Value said.

The company has posted progress in organic growth and also done well in its two largest markets — the U.S. and China — the report noted. The brand has also benefited from innovation by tapping into vegan and vegetarian trends with its Lean Cuisine and Stouffer's lines. It now owns the rights to globally sell some products under the Starbucks brand, which has greatly expanded opportunities in the coffee space.

Danone and Yili managed to stay at No. 2 and 3 as far as global brand value despite myriad problems challenging the dairy industry. However, Danone dropped 10% in value to $8.1 billion. Yili is rapidly catching up by jumping 24% in brand value to $7.7 billion, the report noted.

Yili has "relentlessly committed" to a global expansion program and to innovation, Brand Value said. Although it lost out to Lactalis in a bid to acquire Danone's Stonyfield brand, Yili bought the Thailand-based Chomthana ice cream manufacturer and recently acquired New Zealand's Westland Cooperative Dairy Co. for $404 million. This ambitious strategy could move the Chinese dairy brand up in the 2020 rankings if it continues to find success.

Quaker posted an impressive jump in the rankings with its nearly 57% increase in brand value. Quaker, owned by PepsiCo, has managed to expand beyond its classic oatmeal into flavored and overnight oats — although Brand Finance noted the negative publicity the brand received last year when glyphosate residues were found in some of its products.

Brands seeing value declines included Kraft, which dropped 7% to $4.5 billion; Unilever, down 5% to $4.2 billion; and Heinz, which fell 14% to $3.3 billion. Unilever and Heinz dropped out of the top 10 food rankings this time, while they had occupied Nos. 8 and 9, respectively, in Brand Finance's report.

The report said Kraft Heinz's "aggressive cost-cutting measures" follow its 2017 failed acquisition of Unilever, resulted in significant loss of revenue. As for Unilever, it business has been better than it's would-be acquirer, Brand Finance wrote. However, the brand was dragged down by a plan to move its headquarters from London to the Netherlands, which caused an investor revolt and was hastily scrapped.

Shifts in ranking can be expected to periodically occur, given current trends in the food industry. As CPG companies jockey for competitive position, some will miscalculate and fall. Others will win at innovation or M&A and enjoy sales boosts and enhanced brand value. While it may take a seismic shift to knock Nestlé out of Brand Finance's top spot, even that development isn't impossible in today's uncertain climate.