Costa Coffee named world's second strongest brand in the eating out sector
The coffee chain, which was last year sold by Whitbread to Coca-Cola in a £3.9bn deal, rose from third to second in the brand strength ranking by leading valuation and strategy consultancy Brand Finance, ranked only behind fast food giant McDonald’s.
The company calculates brand strength based on the efficacy of a brand’s performance on intangible measures, such as marketing investment and stakeholder equity, relative to its competitors. Each brand is assigned a Brand Strength Index (BSI) score out of 100. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.
Costa received a score of 87.8, compared with 90.3 for McDonald’s and 86.2 for Starbucks. McDonald’s is strongest brand in sector and the only one to receive AAA+ brand strength rating. The company has continued to ‘vigorously improve its reputation in the market’, according to Brand Finance, has reduced its workforce significantly over the past five years and has also increased its restaurant numbers to around 38,000, serving 69 million customers worldwide each day.
Starbucks has, however, retained its title as the world’s most valuable brand in the restaurant sector, with a brand value of $39.3bn. Over the past year it has broadened its footprint geographically and through strategic partnerships, says Brand Finance, doubling its number of stores across China and is about to embark on a partnership with Uber Eats, enabling customers to have hot coffee delivered to their doors.
McDonald;s retained its position as the second most valuable brand in the restaurant sector, with a value of $31.5bn, with KFC in third place ($13.4bn) and Subway in fourth ($7.7bn). US brands dominate the top 25 list, with only three non-US brands in the ranking - Canadian brand Tim Hortons, ranked 6th ($5.5bn), Costa Coffee, ranked at number 14 (($2.1bn), and Philippines-based Jollibee (15th, $1.7bn).
Taco Bell is fastest-growing restaurant brand this year, up 83% to $3.3bn in value.
Brand value is calculated as the net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The world’s largest restaurant brands continue to pose a threat for smaller players in today’s competitive sector, says David Haigh, CEO at Brand Finance. “The restaurant sector continues to polarise, creating ever more larger brands that are not only very visible, but also very valuable,” he says.
“In a highly competitive marketplace middle sized and small players need to focus on understanding their customers’ tastes and habits to maintain their loyalty and fend off the growing threat from supersized chains.”
