The impact of people eating more healthily has had a detrimental impact on some of the world’s biggest fast food brands, according to Brand Finance.
Its Global 500 rankings for 2016 saw the likes of McDonald’s, KFC and Domino’s Pizza all slide drastically, something the brand valuation firm attributed to “an increasingly fragmented market with healthier challenger brands offering greater choice for consumers.”
KFC fell 110 places to 146th, with its brand value down 27% to $6.1bn, while Domino’s Pizza fell a whopping 125 places to 427th, with its brand value falling 16% to $3.98bn. The much bigger McDonald’s brand also fell four places to 16th as its brand value fell 9% to $38.96bn.
In 2016, the British government unveiled plans to introduce a sugar tax in the hope of reducing sugar consumption. And the changing consumption habits of consumers, particularly their move away from sugar-high products, has also seen Coca-Cola’s global revenues fall from $48bn in 2012 to $44.3bn in 2015. According to Brand Finance, the soft drink giant’s brand valuation took another hit in 2016, with Coca-Cola falling 12 places to 28th and its brand value down 7% to $31.88bn.
“The behemoths of the non-alcoholic drinks industry, Coca-Cola (28th) and Pepsi (67th) have fallen as they continue to struggle against the trend towards healthier alternatives and greater scrutiny around marketing sugary drinks to children,” explains David Haigh, CEO of Brand Finance.
However, energy drinks appear more successful in battling the anti-sugar brigade, with Red Bull (227th) and Gatorade (372th) continuing to increase their brand strength rating (by 1 and 3 index points respectively) in 2016. This was credited to a marketing focus on extreme sports and performance athletes.
Success for Google and Lego
The biggest success stories were Google and Lego. With a brand value of $109.5bn, Google replaced Apple – which has held the spot for the last five years – as the world’s most valuable brand. Google’s reliance on its core search business was listed as its biggest strength due to remaining “largely unchallenged” in this area.
“Apple has struggled to maintain its technological advantage. New iterations of the iPhone have delivered diminishing returns and there are signs that the company has reached a saturation point for its brand,” adds Haigh.
“The Chinese market, where Apple has enjoyed a dominant market share, is becoming far more competitive with local players entering the market in a meaningful way.”
Lego, meanwhile, has regained its status from Disney as the world’s most powerful brand, thanks to its impressive brand strength score of 92.7. It is expected to have another winning year in 2017, with analysts backing The Lego Batman Movie to be one of the year’s highest grossing movies at the box office.
Elsewhere, the rise of Chinese brands in the West continued in 2016, according to Brand Finance. Alibaba rose 36 places to the 24th ranking, while ICBC, the Chinese Construction Bank and China Mobile all made the top 20.
And despite 2016 being a year of recalls and faulty products, Samsung remains surprisingly strong. It rose one ranking to 6th as its brand valuation grew 13% to $68.21bn.