McDonald’s is the world’s most valuable restaurant brand, according to Brand Finance, as previous incumbent Starbucks suffers from “growing misalignment” with customers.
Starbucks is no longer ranked as the world’s most valuable restaurant brand, according to Brand Finance. Its brand valuation dropped by 36% versus last year.
This drop of more than a third in Starbuck’s valuation was driven by declines in key brand health metrics, including “reputation” and “recommendation”. Brand Finance says this is down to what it terms the “growing misalignment” between the brand and its customers.
Writing back in November, Marketing Week columnist Mark Ritson ripped into Starbucks’ brand positioning.
“Starbucks has never truly known what its appeal is to consumers,” he wrote. “That’s a shame, because if it can cut through the self-inflated bullshit of its silly series of mission statements and get to grips with its actual appeal, the company and its customers could be infinitely better served.”
The coffee chain’s brand value is now $38.76bn (£28.96bn). McDonald’s has now overtaken it as the most valuable restaurant brand, with a brand value of $40.51bn (£30.27bn), up 7% versus last year.
Brand Finance uses the ‘royalty relief’ method to calculate its brand valuation. The method determines the value a company would be willing to pay to license its brand if it did not own it. This involves estimating the future revenue attributable to a brand and calculating a royalty rate that would be charged for the use of the brand.
Starbucks needs to cut the crap from its brand positioning
Most brands are not licensed, making this scenario purely hypothetical. Therefore, to work out the brand value of those on the list, Brand Finance looks at brand health measures to determine brand strength and uses sector-specific data to determine the royalty rate range there, as well as looking at parent company data to work out the revenue attributable to each brand. It uses all these factors to arrive at the values on its list.
McDonald’s increase in brand value and its rise to the top of the list was largely driven by an rise in its brand strength. According to Brand Finance, McDonald’s excels in several brand strength metrics, recording a perfect 10 out of 10 score on ‘familiarity’, 9.5 for ‘consideration’, and ‘9.4’ for ‘preferred brand’.
KFC ranks at number three, with a value of $15.36bn (£11.48bn), and Subway at number four, with a value of $8.08bn (£6.04bn). Fellow Yum Brands! restaurant Taco Bell rounds out the top five, with a value of $6.92bn (£5.17bn).
Brand Finance has also ranked restaurants based on brand strength. Although it is nowhere near the global size of the likes of McDonald’s, Greggs, which ranks 21st on the value list, takes second place when looking at brand strength. It scores 92.3 out of a possible 100.
Chinese hot pot chain Haidilao takes the top spot in terms of brand strength, with a score of 94.1. Olive Garden takes the number three spot with a score of 91.3. Meanwhile, the most valuable brand McDonald’s is ranked number four, with 90.5.
