Yili retains position as the world’s most valuable dairy brand valued at $11.6 billion
London, 20th August 2024 - Yili (brand value down 6% to USD11.6 billion) continues to hold the title of the world’s most valuable dairy brand for the fifth consecutive year, according to a new report from leading brand valuation consultancy, Brand Finance.
Yili operates 15 global R&D centres and has developed a comprehensive three-tiered innovation platform, fostering advancements from raw materials to final products. In December 2023, Yili introduced groundbreaking health-oriented products and revolutionised its supply chain through digital transformation.
The brand’s commitment to sustainability and global health, along with its strategic restructuring of liquid milk channels and expansion into growth sectors, has ensured its continued leadership in the dairy industry.
Despite a challenging year for the dairy industry, with the total value of the top 10 dairy brands ranked experiencing a decrease by 6% from USD46.7 billion in 2023 to USD43.8 billion now, Yili's performance highlights its enduring strength and resilience.
The overall decline in the dairy sector is driven by a sharp drop in prices, despite stable product volumes. This price drop has significantly impacted the revenues of many prominent dairy companies, resulting in lower overall revenues.
The valuation data underscores the difficulties faced by the dairy sector in maintaining profitability amidst price pressures, even as brands succeed in strengthening their brand equity. This trend highlights the need for strategic adaptations within the industry to navigate economic challenges effectively.
Amul (brand value up 11% to USD3.3 billion) retains its status as the strongest dairy brand ranked, with an improved Brand Strength Index (BSI) score of 91 out of 100. Amul’s unique branding strategy, rooted in its cooperative structure and impactful marketing campaigns, has solidified its position as a household name in India. With an 85% share in the Indian butter market and 66% market share in cheese, Amul’s branding efforts have successfully resonated with consumers.
Valio (brand value up 31% to USD2 billion) makes a notable entry into the ranking this year, climbing four spots to secure the 10th position and earning the title of the fastest-growing dairy brand. This impressive growth is primarily attributed to the acquisition of Planti, a Finnish producer of plant-based dairy alternative products. With this acquisition, Oddlygood, a subsidiary of Valio, becomes the market leader in plant-based dairy alternative snacks in Sweden and dairy alternative cooking products in Finland.
The deal has significantly enhanced Valio’s position in the plant-based dairy alternatives sector. This strategic move aligns with Valio’s growth strategy and underscores its commitment to expanding its portfolio with innovative and high-quality plant-based dairy alternative products.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is 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.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
