Nestlé remains the world’s most valuable food brand at $20.8 billion while Lay’s rises to second place, valued at $12 billion
London, 20th August 2024 – Nestlé (brand value down 7% to USD20.8 billion) continues to hold the title of the world’s most valuable food brand, according to a new report by Brand Finance, the world’s leading brand valuation consultancy. Despite a decline in brand value, Nestlé's strong brand equity and resilience have helped it maintain its top position in the global food industry. Nestlé’s ability to adapt to changing consumer preferences and maintain a diverse product portfolio has been instrumental in its continued success.
Lay’s (brand value up 9% to USD12 billion) has climbed to the second position globally, surpassing Yili (brand value down 6% to USD11.6 billion) which holds the third spot. Lay’s strong financial performance and innovative product offerings, such as its Flavour Swap and MAX lineups, have contributed to its brand value growth.
The food and beverage sector has seen a 4% decline in brand value this year, totalling around USD268 billion. Consumers are increasingly favouring smaller, private label brands over big names for unique, personalised products.
Savio D'Souza, Valuation Director at Brand Finance, commented:
"The food and beverage industry is undergoing a rapid transformation driven by evolving consumer preferences. While the decline in brand value is a challenge, it also presents opportunities for innovation. Brands that successfully adapt to these trends by demonstrating strong brand purpose and delivering exceptional consumer experiences will be the ones to thrive in this new landscape.”
Convenience foods and dairy remain as major contributors, with convenience foods thriving due to busy lifestyles of consumers and dairy staying strong thanks to plant-based options and health trends. These shifts challenge established brands to adapt, while new brands capitalise on changing consumer preferences.
Leading brands in this segment include Healthy Choice (brand value up 17% to USD1.4 billion) and DiGiorno (brand value up 17% to USD1 billion), both of which have successfully adapted to changing consumer preferences through innovative product releases and strategic marketing.
Amul (brand value up 11% to USD3.3 billion) has risen to become the world’s strongest food brand, with a Brand Strength Index (BSI) score of 91.0 out of 100 and an AAA+ rating. Amul’s brand strength is attributed to its strong performance in familiarity, consideration, and recommendation metrics.
Meanwhile, new entrant Viterra (brand value up 37% to USD1.1 billion) has recorded the largest brand value growth by percentage in the ranking. This growth is supported by increased volumes, strategic acquisitions, and a higher BSI score, now at 60.6 out of 100.
The 2024 Sustainability Perceptions Index finds that in the food sector Nestlé has the highest Sustainability Perceptions Value at USD1.4 billion and Lay’s has the highest positive gap value of USD67 million among brands in the rankings.
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.
