Contents
1.  Introduction
2.  Methodology
3.  Key issues
4.  Biggest Movers: Going UP
5.  Biggest Movers: Going DOWN
6.  The Top 10
7.  Top sectors
8.  Biggest brand owners
9.  Country of origin
10. The Top 100

 

1. Introduction
Intangible Business is the world's largest independent brand valuation consultancy. Valuing brands has been the focus of its activities for the past five years, during which time it has valued some of the world's biggest brands for management, financial and legal purposes.

 

This study of the most valuable grocery brands in the UK was driven by the growing number of mergers and acquisitions in the sector and the continued investment in these brands to differentiate them from the increasing growth of the retailers' own label brands. The research provides retailers, brand owners and investors with a unique insight into which are the most powerful and valuable brands, which brands consumers identify with most, which are growing and which are in decline.

 

In consumer industries such as this, brands generally account for the majority of a company's value. Understanding this value will lead to a greater appreciation of brands and the value they contribute to a company's bottom-line. As such, this study reveals useful insights for marketing, finance, investors and business professionals alike.

 

This study is the only one of its type to provide access to the mechanics of the calculations and demonstrate how each brand generates its value. Workings have been deliberately left unlocked to allow for an open discussion of the brand values. As this is the study's first year, year on year comparisons of brand value are not possible but instead, it can  be something to look forward to next year.

 

2. Methodology
Brand values are a reflection of a brand's ability to generate future income. It is a forward looking study that uses historic performance and future trends to predict future activity. Three years of historical sales data was provided by ACNielsen for each brand, based on sales data from more than 83,000 grocery stores. To determine the strength of the brands, each brand was also scored on nine measures of brand strength, provided from quantitative consumer data and qualitative panel data.

 

Definitions of components of brand strength
Hard measures
Share of market: volume based measure of market share
Brand growth:   projected growth based on 3 years historical data and future trends
Price positioning: a measure of a brand's ability to command a premium
Market scope:  number of markets in which the brand has a significant presence

 

Soft measures
Brand preference: a measure of relative pre-disposition or spontaneous selection of a brand
Brand awareness: a combination of prompted and spontaneous awareness
Brand relevancy: capacity to relate to the brand and a propensity to purchase
Brand heritage:  a brand's longevity and a measure of how it is embedded in local culture
Brand perception: loyalty and how close a strong brand image is to a desire for ownership

 

Calculating brand value
The actual brand valuation calculation is relatively straight forward. It attempts to derive the amount the brand owner would be willing to pay for its brand if it did not already own it. This approach is called the relief from royalty methodology as it calculates how much the brand owner is relieved from paying by virtue of owning the brand. The more complicated parts are the components that contribute to the calculation. These three stages illustrate the process, simply:

 

1. Forecast sales
These brands have been given indefinite lives as they are all market leading brands, steeped in heritage and with financially robust owners. The compound annual growth rate (CAGR) is adjusted to reflect the brand's long term ability for growth. For example, Warburtons, has grown by a CAGR of 15% since 2003 but as this level of growth is unsustainable in the long term it has been adjusted to a terminal growth rate of 4%. This reflects more accurately a brand and its sector's long term growth prospects based on its current and historical performance.

 

2. Royalty rate
Each brand is given a score out of ten based on the measures identified above, 0 = low, 10 = high. This results in relative brand strengths for each brand as a percentage. This score is then positioned within a royalty rate range to determine a unique royalty rate for each brand. The royalty rate ranges differ for each sector based on the sector's average profitability and level of brand contribution. For example, a royalty rate range for Soft Drinks sector is between 0% and 20% at retail level as the brand contributes about 80% to the sale price - the remaining 20% being ingredients, distribution, manufacturing etc. The range for a sector such as Bakery would be lower as the cost of ingredients is greater and the brand has a lower contribution.

 

The royalty rate appears to be a simple percentage but in fact this hides the depth of understanding required to determine a rate that reflects accurately the profit/cash flow generated by the brand alone - separate from other elements of product delivery.

 

3. Discount rate
Future sales are then multiplied by the royalty rate and reduced for tax at 30%. They are then multiplied by a discount rate to calculate the net present value of those future cash flows. The discount rate reflects the time value and risk attached to those cash flows and for the purpose of this exercise has been left at a flat 9% as these are relatively low-risk, established brands in a stable economic environment and market.

 

Testing
Results are tested and verified by sense-checks, such as to comparable commercial transactions, and referenced to proprietary information on the value of leading brands, which all share similar characteristics of value cash flow generation.

 

3. Key issues

 

Health
It is no coincidence that the majority of the fastest growing brands promote their health benefits. Actimel, Young's, Petit Filous, Uncle Ben's Rice and even Bakers Petfood are just some of the fastest growing brands. And the brands at the bottom of the growth table are the ones perceived as the unhealthiest; cakes, sweets, chocolate and crisps. Ironically, despite this polarization, the brands in the two unhealthiest sectors, Soft Drinks and Confectionery, account for 38% of the total value of these brands. There is an increasing trend whereby consumers reward their healthy habits with a treat: "I've had an Actimel so I can eat an Aero"

 

Convenience
Another growing trend is that of convenience: single serve rice and pet food; frozen fish and vegetables; bread, baked beans and cereal which are all quick and easy ways of eating healthy, filling food. Brands which have been able to capitalise on the trends for both convenience and health, such as Heinz, Actimel and Uncle Ben's Rice have seen their sales rise and this reflected in the value of their brands.

 

Own label
The threat of own label continues to encroach on brands' market shares. Promoting a discernable benefit to the consumer has been an important factor in beating product commoditisation. The Bakery sector is a good example of this. Bread has been part of our staple diet for thousands of years yet three brands, Warburtons, Hovis and Kingsmill, have bucked the trend by developing powerful brands with innovative products to match.
Another example of the strength of brands is McVities Cakes, valued at £47.8m. McVities never registered the trademark to the term ‘Jaffa Cakes' which invited other brands and retailers to develop similar products: Tesco, Sainsbury's, Jacobs and other brands promptly did, also calling them Jaffa Cakes. All the Jaffa Cake products are largely indistinguishable, their names are the same and the branding pretty similar, yet McVities is able to charge a premium of nearly 40% over the standard supermarket product. This is purely down to the brand and demonstrates just how important and valuable brands are and how they can be leveraged to beat competition from own-label.

 

Ingredients
A brand's provenance has become increasingly important as retailers attempt to reduce food miles and strengthen a brand's values and heritage. For example, retailers, such as Waitrose, actively promote locally sourced products and home grown and UK brands such as Ginsters and Cathedral City are capitalising on this opportunity. And Bovril is returning to adding beef extract to its content in an attempt to reverse sales which were in decline following its replacement of vegetable extract - which completely undermined its brand's core promise.

 

Organic food is also increasing in popularity with many brands such as Hovis, Tate & Lyle, Weetabix and Tetley launching organic product variants. Fair trade products are also on the rise, supported by brands such as Nescafé attempting to display their ethical credentials.

 

Consolidation
There has been considerable activity in the grocery industry recently with brands changing hands and being mooted as bid targets.

 

Private equity companies are flexing their muscles and proving what can be done with strong brands and management. Capvest, is successfully building the Young's and Findus ranges, Permira is hoping to replicate similar success with Birds Eye, and Cinven, PAI Partners and MidOcean Partners together with Kraft, are rumoured to be selling United Biscuits and its stable of national favourites including McVitie's, Penguin, Jaffa Cakes, Jacob's, McCoy's crisps and KP Nuts.

 

Premier Foods is also bolstering its position as a leading grocery company, having bought the Campbell Soup, Oxo, Homepride and Batchelors brands in July 2006. Unilever is still in the process of refocusing on key brands, hence its divestment of Birds Eye, so Unilever's other brands could be set for a boost in the years to come.

 

Further consolidation is expected as companies battle for control of the UKs biggest grocery brands.

 

4. Biggest Movers: Going UP

 

1. Actimel
Actimel is the fastest growing brand in the top 100, having grown at an astonishing 48% a year since 2003. Its meteoric rise has been aided by the strength of its parent company, Danone, which gives it an edge over rivals such as Yakult. Although Actimel currently stands above all direct competition, activity from rivals is increasing. Muller, Ski, Yeo Valley, Benecol and Yoplait all want a slice of the action and all have brands capable of succeeding in the Pro Biotic market. To sustain growth, Actimel should extend beyond a one-product brand into other related dairy products such as yoghurts and spreads. Its brand scores well but there are a dozen other brands capable of taking its place.

 

2. Young's Frozen Fish
Under the stewardship of private equity firm, CapVest, the 200 year old Young's brand has enjoyed growth of 28% annually since 2003. The change in public perception of frozen food to be seen as fresh, coupled with our ever busier lifestyles requiring healthy, convenient food has helped buoy this growth. Young's range of fish ensures it has a product for all tastes and the lack of competition from Birds Eye has given it room to manoeuvre. Now Birds Eye has been sold to a rival private equity firm, Permira, competition could increase.

 

3. Uncle Ben's Rice
Uncle Ben clearly understands the needs of its customers: a wide choice of easy to cook, tasty, rice. Effectively meeting these needs has seen growth increase by 19% annually since 2003 and has given it a brand value of £83.3m, ranking it at number 52 - 35 positions above its sales rank. A lack of a significant non-own-label competitor has enabled Uncle Ben's Rice to dominate the convenience rice market but with Premier Food's recent acquisition of Batchelor's, Uncle Ben's could soon have a rival for some of its products.

 

4. Kellogg's Special K
Kellogg's Special K commands a premium of at least 50% over a supermarket own-label product. But despite being significantly more expensive, sales have increased by 18% a year since 2003. The brand has a clear, healthy message and encourages loyalty with its bespoke dietary programme. Kellogg's Special K is the UK's second biggest selling cereal, with Kellogg's Crunchy Nut Cornflakes and Kellogg's Cornflakes in third and fourth places. With such a dominance of the cereal sector, Kellogg's is unlikely to be displaced. And with the trend for healthy eating continuing unabated, Kellogg's Special K is likely to be able to sustain its growth.

 

5. Tropicana
PepsiCo's Tropicana brand has grown by 18% a year since 2003 and the brand is now worth £202.4m in the UK alone. It has been successfully steered from providing orange juice alone to offering flavours including grapefruit, tropical, Sanguinello, apple and grape. Its brand scores highly and it has a great product to match. New product sizes such as 330ml bottles open up the drinking occasions and the Tropicana Go! products with fruit juice diluted with water enable it to broaded its appeal to new customer segments.

 

5. Biggest Movers: Going DOWN

 

1. Fanta
Fanta was the worst performing brand in the top 100, losing sales worth 13% a year since 2003 - a trend which is accelerating. The carbonated soft drinks sector is in a sharp decline and despite parent company, Coca-Cola's, efforts to stem the decline, it is inevitable. Competition from other soft drinks targeting children such as Robinson's Fruit Shoot and premium adult soft drinks targeting adults such as Shloer are stifling Fanta's growth.

 

2. Kleenex
Kleenex's tissue sales have fallen by 8% a year since 2003. Worth £62.3m, Kleenex is a valuable brand but it is failing to keep pace with consumers shifting requirements. Attempts to resurrect the brand, such as licensing brands such as Disney's film Cars, may assist recovery but the impact of this activity has not yet been felt.

 

3. Comfort
Comfort is another big loser - down 8% each year since 2004. In the Laundry market, sales of the old market leaders are significantly down. Sales of Surf are down 12%, sales of Persil are down 7% and Ariel is down 2%. Keeping the brands in the top 100 at an average 2% growth are smaller brands such as Lenor (up 17%), Bold (up 10%) and Fairy (up 8%). Stalwarts of old, such as Comfort, are failing to keep pace with the more nimble smaller brands despite being preferred by the UK public.

 

4. Kellogg's Cornflakes
The UK's appetite for Kellogg's Cornflakes is failing. Sales have dropped by 7% since 2003 and it is the only brand in the Dried Staples sector to have fallen. Competition has increased from both inside and outside Kellogg's and neither the brand nor the product is as exciting as more popular cereals such as Kellogg's Crunchy Nut Cornflakes, Jordan's Country Crisp or even Weetabix. Kellogg's strategy may have been to focus on other growth products at the expense of Cornflakes, choosing to milk it as a cash-cow, but investment into new product variants, such as Cornflakes with berries, may give it the lift it needs.

 

5. Persil
Persil has lost sales worth £34m over the past two years which would have had a direct impact on the value of its brand. The brand is still valuable, worth £165.3m, and capable of selling over £200m of products each year but it has lost market share to competitors such as Lenor. The brand still scores highly with the UK public and with its strong heritage, would have permission to reverse the trend. Perhaps with a renewed focus from its parent company, Unilever, the brand will shine once more.

 

6. The Top 10

 

1. Coca-Cola: £1,057.3m
2. Cadbury Dairy Milk: £523.8m
3. Warburtons: £390m
4. Nescafe Instant Coffee: £374.8m
5. Hovis: £362.8m
6. Lucozade: £358.9m
7. Robinsons: 326.9m
8. Andrex: £302.5m
9.; Heinz Baked Beanz: £256.4m
10: Pepsi: £247.8m

 

No.1: £1bn COCA-COLA
The Coca-Cola brand is over twice as valuable as any other grocery brand in the UK. Its ability to appeal to both sexes, all ages, all social groups at any occasion sets it apart from virtually all other brands. It has an impressive heritage and has full market penetration in the UK and throughout the world.

 

Coca-Cola's dominance is on the verge of teetering however: it is being hit by a consumer backlash against allegations of human rights abuses; it faces controversy over its close association with US imperialism; it is running counter to the trend for healthier, non-carbonated products; its advertising is facing increasing restrictions, especially to children; and its brand is under threat from being diluted because of over extension. Sales, too, have fallen by 2% since 2003.

 

Coke remains a powerful and valuable brand but as it's so big, it only has further to fall.

 

No.2: 524m CADBURY DAIRY MILK
In this, its one hundred and first year, Cadbury Dairy Milk has a lot to be celebrating. Sales have grown 13% annually since 2003 and it is the second most valuable grocery brand in the UK and the biggest selling chocolate brand.

 

Cadbury's subtle tweaking to the packaging design ensures Dairy Milk's contemporary and familiar feel. Product innovation, such as new flavour variants and product sizes, broadens its appeal. And the backing of a parent company with an advertising budget approaching £20m ensures its constant visibility.

 

With such a strong heritage the brand is deeply embedded in our culture and is difficult to dislodge. This strength was demonstrated in July 2006 when, despite a product recall and fiasco surrounding a salmonella scare, the brand's reputation remained largely unaffected.

 

No.3: £390m WARBURTONS
A relative new comer to the national grocery market, in spite of a 130 year heritage in the bread business, expansion has bred success and Warburtons is now beating its rivals hands down. Sales have increased by 15% annually over the past three years and although its brand is not seen as strong as rival Hovis, the sheer volume and growth in sales is enough for it to secure the lead.

 

Along with a bolstered distribution, Warburtons has successfully executed a product extension strategy and its raft of new products and formats such as the Toastie, has helped increase the value of its brand. Its packaging helps achieve standout and it is able to maintain a price advantage over its rivals - retailing at twice the price of a standard own-label product.

 

With the growing trend for convenience and healthy eating, the Bakery sector bread is set to continue its upward trajectory. Warburtons, with its strong brand and equally popular product, is well positioned to capitalise on this growth.

 

No.4: £375m NESCAFÉ INSTANT COFFEE
Nescafé is the nation's default coffee of choice. It sells nearly four times as much as the second largest, Kenco, and is growing three times as quickly. Recent bouts of competition from the likes of specialist players, such as Lavazza and Illycafe, and fair trade rivals, such as Café Direct and Percol, threaten to encroach on Nescafé's territory. But the strength of its brand and size of its market share should prevent it from loosing ground so long as resource is allocated to innovation and the brand.

 

No.5: £363m HOVIS
Erstwhile favourite, Hovis is engrained in consumers' minds as being a superior bread product. This is seen through its increasingly improving growth, up 6% from 2003 to 2004 and 15% to 2006. Hovis is the strongest of the bakery brands which demonstrates an opportunity for growth over market leader, Warburtons. It has taken market share from rival Kingsmill and with the trend for healthy, convenient eating, its brand should lead it to even more success - especially if it can leverage its brand's value to focus on future innovation rather than relying on its past associations.

 

No.6: £359 LUCOZADE
2006 saw the launch of Lucozade's biggest ever multi-media advertising campaign, twenty-one years after it was repositioned as an energy drink from a convalescent drink - available on prescription. This heritage it tried to evolve from may come in handy as the market swings back towards healthier products. Lucozade's functional energy supporting properties and healthy heritage, combined with an equally healthy 8% annual growth, is driving its brand value. Its new range of flavours, which now number six, and innovative service delivery formats will aid its growth along with advertising support from deep-pocketed parent company, GlaxoSmithKline.

 

No.7: £327m ROBINSONS
Robinsons is the 10th largest grocery brand by sales in the UK and the seventh most valuable grocery brand. Helping it punch above its weight is the strength of brand which resonates strongly with the UK public. Its 150 year heritage has seen it served to generations of children and over 1.25bn litres drunk each year. With growth in its core squash products largely stagnant, parent Britvic launched a range of innovations such as Fruit Shoot, Fruit Spring and For Milk which should ensure its continued growth for years to come.

 

No.8: £303m ANDREX
Despite being in a relatively mature market, Andrex has managed to increase its sales by an impressive 7% since 2003. It is both the most valuable household grocery sector brand and scores the highest for brand strength. Its brand enables it to charge a premium of approximately 20% over a supermarket own label product and is worth over five times its nearest rival, Charmin.

 

No. 9: £256m HEINZ BAKED BEANZ
Heinz products topped the charts for brand strength with its beans scoring the highest with its Ketchup and Soups in second and fourth place respectively - pipped to the gold, silver and bronze position by the mighty Coca-Cola. Heinz Baked Beanz was the ninth most valuable UK grocery brand in 2006, regardless of the fact that it is only the twenty-first biggest brand by sales. Like Coca-Cola, Heinz has been able to straddle the gender, class and age divide despite being a relatively inexpensive product. Its compound annual growth of 9% is testament to its continued popularity and with its innovative approach to content, such as reducing salt by 30% and promoting its fibrous advantages, it is set to ride the wave of convenient and healthy products.

 

No. 10: £248m PEPSI
First in blind tastings, terminally second with eyes open. Nothing illustrates the power of the brand quite like the Coca-Cola/Pepsi rivalry. Despite a consistently proven more popular product, Pepsi is still unable to come anywhere near its rival, purely because of the strength of Coca-Cola's brand. Pepsi's brand value, like its sales, is a quarter of its rival's and as it is in the declining carbonated soft drinks sector, this value is unlikely to rise much further.

 

7. The most valuable sectors

 

1.  Soft Drinks
The Soft Drinks sector is the largest sector by brand value, accounting for a quarter of the total brand value of the top 100. This is perhaps no surprise seeing as it is populated by a dozen brands which are favourites throughout the world. The brand contribution of soft drinks is one of the largest across all sectors and can account to up to 80% of a products value. Take Evian, for example. The raw material of the product, water, does not cost much to produce and consumers can access it for free from their taps yet Evian is able to charge nearly £1 for a two litre bottle. 80 pence per purchase is effectively down to the strength of the brand with the remaining 20 pence the cost of packaging, production, distribution and management.

 

2. Confectionery
Confectionery is the second most valuable sector by brand value with more valuable brands in the top 100 than any other category. The majority of these brands have been around for generations and are owned by multinationals. This makes it very hard for new brands to enter the market.

 

3. Bakery
With only three brands in the top 100, the Bakery sector is performing well above its weight. It is a highly consolidated market with only three major brands, Warburtons, Hovis, and Kingsmill. The scope for new brand entrants is additionally limited due to the strength of the retailers own brands.
But with these three brands averaging 10% annual growth since 2003, the sector is extremely attractive to possible new comers with a differentiated offer.

 

4. Laundry
The battle for most valuable Laundry brand is hotly contested between Bold, Persil and Ariel. Bold is set to overtake Persil as the UKs most valuable Laundry brand next year following its 10% annual growth and Bold's decline of 7%. Lenor, too is one to look out for following growth of 17% and a strong brand to match.

 

5. Dried Staples
With the launch of Weetabix brand extensions and variants such as Weetabix Mini's in three flavours, Weetabix Organic and the new Weetabix Gold, Weetabix is consolidating its position as the UKs most valuable cereal brand. Although the Kellogg's family of cereal brands would collectively score higher than any other cereal brand, individually they are not as valuable as Weetabix. Kellogg's most valuable brand in the UK is Special K, its healthy image driving sales by an impressive 18%, 3% faster than Weetabix. Special K also has the highest brand score.

 

Uncle Ben's rice is the fastest growing brand in the Dried Staples sector having increased its sales by an annual 19% since 2003. Convenient serving formats such as its microwavable single-serve pouches and flavour variants such as egg fried rice are helping drive its growth and continued innovation will see Uncle Ben strengthen its share of the market.

 

6. Household
The Kimberly-Clark-owned Andrex brand is six and half times more valuable than Velvet, its nearest competitor in the toilet tissue market. It's brand is also seen as the strongest and consumers' familiarity and loyalty to the brand has helped sustain its 7% annual growth at the expense of rival's Velvet's decline of 3%. Fairy also scores well, punching above its weight with a value of £97.2m with a healthy 4% growth.

 

7. Chilled & Frozen
Under the ownership of private equity firm CapVest, Young's has been catapulted to the top of the charts buoyed by 28% annual growth since 2003. However, Young's position as the UKs most valuable Chilled & Frozen foods brand is under threat from rival Birds Eye. Permira, the new private equity owner of Birds Eye is hoping to build on its 10% growth and as Birds Eye is the stonger of the two brands, Young's days at the top could be numbered. Birds Eye's total brand value, from the sum of its brands in the top 100, is nearly £350m - dwarfing its rival Young's.
Both pizza brands, Chicago Town and Goodfella's brand values perform under their sale ranking as they lack strong brands which consumers can connect to.

 

8. Tinned Food
 Heinz dominates the tinned food sector, with three of the five most valuable tinned food brands in the UK; as the best scoring brand in the whole of the research, it is perhaps no surprise. Supported by product innovation, Heniz Baked Beanz has grown by 9% a year since 2003. With a standard tin of Heniz Baked Beanz retailing for a premium of 48% over a standard own-label tin and 170% over an economy own label tin, the power of the Heinz brand is really evident.
The battle for the most valuable tinned fish brand is won by John West, with Princes hot on its heels having grown twice as much at 8% annual growth since 2003. If sales continue along the same trajectory and resource is invested behind its brand, Princes could well overtake John West in 2007.

 

9. Hot Beverages
Despite having two of each in the top 100, coffee brands are twice as valuable as the tea brands. Largely boosted by the value of Nescafé, at £374.8m, tea never really stood a chance. And while both coffee brand sales have risen since 2003 both tea brands' sales have sunk. Tetley beats PG Tips as the UKs most valuable tea brand. Its range of speciality teas and other innovative variants such as organic and extra strong, and formats such as Quickbrew and T of Life ice tea have helped Tetley keep pace with times, something PG Tips needs to do if its 2% decline is to be reversed.

 

10. Biscuits / Snacks
The 10th most valuable sector is a highly competitive one with nine brands jostling for position. Walkers Crisps comes out top as the most valuable brand in this sector in the UK, worth £216.5m, over three times as valuable as its nearest crisp competitor, McCoys. Walkers Crisps' sale have fallen by 2% since 2003, though, while McCoys has grown by an impressive 18%.

 

Mr Kipling, while still a valuable brand, is in danger of losing some of its lustre as it struggles to disassociate itself with its past. That said, nearly 130m packs of Mr Kipling cakes are sold every year and they are eaten in 50% of UK households. A newly designed product range and a raft of product variants may do the trick and boost the value of this 30 year old brand from its current £70.3m.

 

11. Dairy
Actimel leads the Dairy brands as the most valuable in the UK following an trail-blazing 48% growth - albeit from a low base. Although Muller's sales are nearly three times greater than Actimel's, its brand is not perceived as quite as strong as Actimel's and its sales are in decline. Actimel is currently a one product brand, with multiple variants, but if owner, Danone, releases some of its brand equity, the brand has permission to extend into other related products that are currently thedomain of its larger rival, Muller. Dairylea has been active in trying to leverage its valuable brand with new formats such as Lunchables, Strips, Chipsticks and Tribites. The effect of these developments are perhaps yet to be realised as sales have declined by 2% since 2003, or perhaps the appetites of UK consumers have changed to more authentic alternatives such as Cathedral City cheese, which has grown by 20% over the same period.

 

12. Pet Food
Mars dominates both the cat and dog pet food markets with Whiskas and Pedigree, which are the two most valuable pet food brands in the UK, worth £203.2m and £174.1m respectively. Both brands have significant lead on the Nestlé's rivals, Felix and Bakers, which, despite much investment, fall short of being worthy adversaries.

 

13. Yellow Fats
The four Yellow Fats brands in the top 100 have experienced positive growth of an average 6% since 2003. Flora leads the way as the most valuable brand, playing on its healthy properties. Flora has also launched a range of Pro Activ products such as yoghurts, milk, drinks and spreads to concrete these credentials. Arla's more premium brand, Lurpak, beats its fellow stable rival, Anchor, following significantly higher sales and growth rates as well as having a stronger brand.

 

14. Condiments
Heinz's 130 year old Tomato Ketchup continues to be a household and trade staple and is even an approved supplier to the NASA space station! As with baked beans, Branston is trying to steal market share from Heinz but the brand is so strong and valuable that it hardly appears dented -sales have instead climbed by 10% annually since 2003. Hellmann's, too, is another brand that will be difficult to dislodge. Worth £90.6m in the UK it is also experiencing growth, of 8% annually since 2003.

 

15. Meat, Fish & Poultry
Bernard Matthews got a bit of a roasting from Jamie Oliver and despite having a valuable brand, sales have fallen. Bernard Matthews responded by promoting the health benefits of its meat products but it could be too little too late for this 55 year old English brand. On the up is Ginsters, buoyed by the popularity of its Cornish origins with a brand worth £57.6m. With sales increasing by 9% and the convenience factor of its products, Ginsters is set for an impressive future.

 

8. The brand owners with the most valuable brands
As the table illustrates, there are a considerable number of brand owners in the grocery industry and some notable absences. Lifted by its flagship brand, Coca-Cola tops the table as the brand owner with the most valuable brands. All Coca-Cola's value, however, is held within just two brands whereas arch-rival, PepsiCo, has three times as many brands in the top 100. Mars, the brand owner with the second most valuable collection of brands has 10 different brands in the top 100 which are distributed between four different sectors. This healthy spread of valuable brands is a defence against a decline in one sector, something Coca-Cola is currently experiencing in the carbonated soft drinks sector.

 

62% of the value of the top 100 is held by just ten companies, between them owning 52% of the top grocery brands. Consolidation is certainly nothing new but with so many other companies owning just one or two such valuable brands, their ability to compete with the larger organisations will become tougher, resulting in yet further consolidation.

 

Premier Foods is one notable absence. It has been collecting brands recently, including Campbell Soups, Oxo, Homepride, Batchelor' it bought in July 2006 for £460m, and other brands such as Ambrosia and Bird's. Premier Foods has also demonstrated an impressive ability to leverage a brand's value and strengthen a brand's offer. It has ambitiously taken on Heinz with the launch of Branston's baked beans and with its new stable of strong brands, Premier Foods is set for a successful future.

 

Another brand not to make the top 100 is Baxters. Although Baxters has a strong brand and heritage, it is essentially a one-product brand so lacks the scale to be included. Because of the brand's strength, Baxters has permission to enter other related grocery sectors with new products and, if done wisely, it could be a viable contender for inclusion next year. 

 

Further consolidation in the grocery industry is inevitable with so many companies vying for shelf space. The number of brands available may stay the same but, like other sectors such as the drinks industry where ownership of leading brands is held by just a few global players, the ownership of the key brands may fall to the existing few global organisations or to others, such as Premier Foods, yet to emerge.

 

9. The countries with the most valuable brands
85% of the value and 87% of the 100 most valuable grocery brands in the UK hail from just two countries: the UK and the US. The US just loses out to the UK as the nation to have produced the most valuable brands with the UK producing 47 brands compared to 40 from the US.

 

Country of origin does not mean that ownership of the brand is by the specified country, rather it means the country where the brand was created. For instance, the John West brand traces its origins back to Liverpool, England in 1885 but is now owned by the Australian company Simplot Australia. And Walker's Crips, although owned by US company PepsiCo, was created in Leicester, England, in the mid 20th Century.

 

UK brands are also performing better than US brands, accelerating by an average of 6%. Brands including Young's, Bakers, Cathedral City Cheese and McCoy's Crisps are some of the fastest growing.

 

US brands are still growing but at 4%, 2% lower than the average for the top 100. It is no coincidence that three of the fastest growing brands all promote their healthy properties, with Uncle Ben's Rice, Kellogg's Special K and Tropicana Fruit Juices taking gold, silver and bronze respectively.

 

Although it only has five of the UK's most valuable brands and accounts for only 8% of all the brands, French brands are accelerating at an impressive average of 20% a year. Healthy brands such as Volvic, Actimel and Petit Filous are behind this growth.

 

10. The Top 100