Brand value of fast-food companies tracks higher

by Eric Schroeder
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NEW YORK — McDonald’s, Starbucks and Subway generated the most brand value among fast-food companies in 2013, helping lead to a 5% increase in brand value for the overall fast-food category, according to BrandZ, the world’s largest brand equity database.

Every year, BrandZ and Millward Brown Optimor calculate and rank brands based on their global value. Brand value is defined as the dollar amount a brand contributes to the overall value of a corporation. Research for determining brand value is based on data gathering from more than two million consumers and more than 10,000 brands in over 30 countries.

In its report, BrandZ gave McDonald’s a 2013 brand value of $90.3 billion, ranking it as the top fast-food brand and the fourth most valuable brand overall, trailing only three technology companies: Apple, Google and IBM.

“In an attempt to project similar appeal, McDonald’s tested all-day sale of baked goods and remodeled certain units to resemble cafes, attempting to create a space for community interaction similar to what Starbucks has accomplished,” the report noted.

Starbucks, with a brand value of $17.9 billion, ranked No. 2 on the list. The company’s value moved up 5% during 2013 as the company announced plans to acquire the French pastry bakery brand La Boulange.

“The company expects the acquisition to help drive food sales and grow another brand,” BrandZ said. “Starbucks continued the roll-out of its updated logo that retains the familiar Siren but removes the word coffee to broaden brand appeal.”

Brand value at Subway increased 12% during 2013, pushing the brand to a value of $16.7 billion, good enough for a No. 3 ranking in the fast-food category, while KFC, a division of Yum! Brands, also increased 12% to a value of $9.9 billion.

Pizza Hut ranked No. 5, with a brand value of $6 billion, and was followed by Chipotle, $5 billion; Tim Hortons, $3.4 billion; Panera, $3 billion; Burger King, $2.4 billion; and Taco Bell, $2 billion.

BrandZ said Burger King’s brand growth strategy helped return the Miami-based company to the fast-food category ranking in 2013.

“Burger King … invested in a multi-year remodeling roll-out,” BrandZ said. “It’s part of a brand growth strategy that includes menu improvements, marketing changes and operational efficiencies to attract more women and older customers. During the recession, Burger King suffered from its relatively narrow core customer base of young men.

“Burger King is in the midst of an effort to infuse the brand with entrepreneurial zeal by shifting from corporate control to a 100% franchise model.”

In general, the BrandZ report pointed to several initiatives that fast-food companies took during the past year to drive brand value, including changes to menus, social media and expansion.

“Many brands expanded baked goods as part of the snacking focus and to drive sales and complement profitable coffee sales,” the report noted. “Most brands engaged heavily in social media both to drive traffic and strengthen brands. International brands accelerated expansion, with several brands entering or adding outlets in India.”

Additionally, snacking was singled out in the report as becoming an important “daypart” during 2013.

“Snacks produce strong margins and leverage locations during the underused afternoon hours after lunch and before dinner,” BrandZ said. “Brands experimented with ways to offer traditional items in smaller and less expensive portions. They marketed specialty beverages, like coffees and fruit drinks, as snacks.”

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