Winning Brand Strategies in Food and Drink

CONSUMER
Brand Building Strategies in Food and

Drink
Increasing dominance, product appeal and market share
By Mark O’Bornick
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Mark O’Bornick
Mark O’Bornick is a consultant, specialising in strategic research and consulting

projects across the food, drink and packaging industries. Mark spent over eight years at
Datamonitor in a variety of research, consulting and management roles before leaving in
2001. His experience at Datamonitor primarily focused on strategic analysis of the
European and global packaging, retail and FMCG industries. This included a strategic
focus on change and innovation, particularly within the context of Datamonitor’s
published range of reports and client-defined consultancy projects. Mark now works
successfully on a freelance basis for a number of manufacturers, retailers and specialist
research and consulting companies. He has authored reports for Business Insights on a
variety of topics across food and drinks markets, including packaging, convenience,
private labels, premium and indulgence and a competitive analysis of the leading global
companies. Prior to his work for Business Insights, he has a degree in economics from
the London School of Economics. He can be contacted by email at:
mark@obornick.freeserve.co.uk
Copyright © 2004 Business Insights Ltd

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Table of Contents
Brand Building Strategies in Food and Drink
Increasing dominance, product appeal and market share
Executive Summary 10
Introduction 10
Market dynamics 10
Key issues in branding 11
Best-practice case studies 11
Industry opinion survey 12
Conclusions 12
Chapter 1 Introduction 14
The aim of this report 14
Chapter structure 14
Branding food and drinks 15
Defining a brand 15
Where does food and drink fit in? 16
Chapter 2 Market Dynamics 24

Summary 24
Introduction 24
Brand dynamics in dairy 25
Dairy market growth strongest in Spain 26
Dairy brands 26
Brand analysis in dairy markets: cheese 28
Brand analysis in dairy markets: yoghurt 30
Brand dynamics in confectionery 31
Confectionery markets boosted by growth in gum segments 31
Private labels not as dominant in confectionery 32
Brand analysis in confectionery markets: chocolate 34
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Brand dynamics in savoury snacks 36
Savoury snacks markets growing strongly in most countries 36
San Carlo and Smith’s: the dominant savoury snack brands 37
Brand analysis in savoury snacks markets 38
Brand dynamics in alcoholic drinks 39
Boosted by FABS, but beer markets struggle for growth 39
FAB markets characterised by dominant leading brands 40
Brand analysis in beer markets: beer 42
Brand analysis in beer markets: FABs 43
Brand dynamics in spirits 44
Spirits markets struggle for growth 44
Private labels take significant share in spirits 45
Brand analysis in spirits markets 46
Wine markets are becoming more brand focused 48
Brand dynamics in soft drinks 48
Functional drinks boosts growth rates in soft drinks 48
Soft drinks brands led by Coca-Cola 49
Brand analysis in soft drinks markets: carbonates 52
Brand analysis in soft drinks markets: bottled water 53
Brand analysis in soft drinks markets: juices 54
Chapter 3 Key Issues in Branding Food and

Drinks 58
Summary 58
Introduction 59
Consumer trends in global food markets 59
Consumer lifestyle drivers 59
Kraft initiatives respond to health concerns 60
Using nostalgia as a brand strategy 62
Coolness in food and drink brands 63
Can local brands go global? 64
Will the Internet redefine global branding? 66
When global is not always best 67
Licence agreements seek local expertise for wider distribution 68
The private label threat 69
Private labels are the new national brands 69
Private labels extend their reach 70
National brands are not unique but retain ‘must-have’ quality 71
Manufacturer brand strategies 71
Disposals and acquisitions 72
Confectionery sets the trends for brand extensions 72
Approach cross-selling with caution 75
Leveraging the power of the corporate brand 75
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Chapter 4 Best-Practice Case Studies 78
Summary 78
Introduction 78
Carlsberg 79
Background 79
Brand issues 79
Approach 79
Brand story 80
Contribution 80
Trebor 24-7 81
Background 81
Brand issues 81
Establishing an emotional, as well as functional value for the brand 81
Pack with pace 82
Contribution 83
Amoy 83
Background 83
Brand issues 83
Brand idea 84
Approach 85
Canderel 85
Background 85
Brand issues 85
Brand idea 85
Approach 86
Outcome 86
Chapter 5 Industry Opinion Survey 88

Summary 88
Introduction 89
Defining a brand 90
Brands are defined by customer relationships 90
Brands must increase sales and improve loyalty 91
Launching a new brand 92
Product sector growth rates are vital to brand launches 92
Brands and consumers 93
Availability is imperative, along with design and packaging 94
Brand strategies: learning from others 94
Lessons can be learned from the leisure industry 95
Branding food and drinks: the future 96
Health issues will drive brand development strategies 96
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Brand rationalisation continues to be important 98
Chapter 6 Conclusions 102

Summary 102
Introduction 103
Growth opportunities in food and drinks 103
Dairy markets have grown strongly, but private labels dominate 103
Confectionery 104
UK, Belgium and Germany are a focus for FAB brands 104
Key issues in food and drinks branding 105
Health issues will drive brand development strategies 106
Case study: extending the health benefits of orange juice 107
Brands will continue to be challenged by private labels 108
Global aspirations branded at a local level 109
Manufacturers: to dispose, acquire or extend? 109
Chapter 7 Appendix 112

Primary research methodology 112
Terms and abbreviations used in this report 112
Food and drinks segmentation table 114
Index 118
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List of Figures
Figure 2.1: Cheese brand dynamics, 1998—2003 30
Figure 2.2: Yoghurt brand dynamics, 1998—2003 31
Figure 2.3: Chocolate confectionery brand dynamics, 1998—2003 35
Figure 2.4: Savoury snacks brand dynamics, 1998—2003 39
Figure 2.5: Beer brand dynamics, 1998—2003 43
Figure 2.6: FABs brand dynamics, 1998—2003 44
Figure 2.7: Spirits brand dynamics, 1998—2003 47
Figure 2.8: Carbonates brand dynamics, 1998—2003 53
Figure 2.9: Bottled water brand dynamics, 1998—2003 54
Figure 2.10: Juices brand dynamics, 1998—2003 55
Figure 3.11: Selected confectionery products from Mars 66
Figure 3.12: Mars: from confectionery to soft drinks 74
Figure 4.13: Carlsberg 80
Figure 4.14: Trebor 24-7 83
Figure 4.15: Amoy noodles 84
Figure 4.16: Canderel 86
Figure 5.17: How do you define the concept of a brand? 90
Figure 5.18: What are the most important functions of a brand? 91
Figure 5.19: How important do you regard the following market attributes when considering a
branding strategy for a new product? 93
Figure 5.20: Which branding issues are important to consumers when making food and drinks
purchasing decisions? 94
Figure 5.21: From which industries can the food and drinks industry learn more about intelligent
branding strategies? 95
Figure 5.22: Which issues in the food and drinks market will feature most heavily in brand
strategy development over the next three years? 97
Figure 5.23: What will be the key corporate issues in brand development in food and drinks
markets over the next three years? 98
Figure 6.24: Pure Premium Essentials from Tropicana 108
List of Tables
Table 1.1: Global ranking of food and drinks brands, 2003 17
Table 1.2: Global brand ranking by brand value, 2003 18
Table 1.3: Global brand ranking by brand value, 2003 continued 19
Table 1.4: Global brand ranking by brand value, 2003 continued 20
Table 1.5: Leading global media spend by company 21
Table 2.6: Dairy market dynamics, 1998—2003 26
Table 2.7: Dairy brand dynamics by key category, 2002 27
Table 2.8: Dairy brand dynamics by key category, 2002 continued 28
Table 2.9: Cheese brand dynamics, 1998—2003 29
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Table 2.10: Yoghurt brand dynamics, 1998—2003 30
Table 2.11: Confectionery market dynamics, 1998—2003 32
Table 2.12: Confectionery brand dynamics by category, 2002 33
Table 2.13: Confectionery brand dynamics by category, 2002 continued 34
Table 2.14: Chocolate confectionery brand dynamics, 1998—2003 35
Table 2.15: Savoury snack market dynamics, 1998—2003 36
Table 2.16: Savoury snacks brand dynamics, 2002 37
Table 2.17: Savoury snacks brand dynamics, 1998—2003 38
Table 2.18: Alcoholic drinks market dynamics, 1998—2003 39
Table 2.19: Beer brand dynamics, 2002 40
Table 2.20: Beer brand dynamics, 2002 continued 41
Table 2.21: Beer brand dynamics, 1998—2003 42
Table 2.22: FABs brand dynamics, 1998—2003 43
Table 2.23: Spirits market dynamics, 1998—2003 45
Table 2.24: Spirits brand dynamics, 2002 46
Table 2.25: Spirits brand dynamics, 1998—2003 47
Table 2.26: Soft drinks market dynamics, 1998—2003 49
Table 2.27: Soft drinks brand dynamics, 2002 50
Table 2.28: Soft drinks categories brand dynamics, 2002 51
Table 2.29: Soft drinks categories brand dynamics, 2002 continued 52
Table 2.30: Carbonates brand dynamics, 1998—2003 52
Table 2.31: Bottled water brand dynamics, 1998—2003 53
Table 2.32: Juices brand dynamics, 1998—2003 54
Table 7.33: Terms and abbreviations used in this report 113
Table 7.34: Definitions of food and drinks segments used in this report 114
Table 7.35: Definitions of food and drinks segments used in this report continued 115
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Executive Summary
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Executive Summary
Introduction
This chapter presents a summary of some of the core findings of this report. Each
section refers to a chapter of the report, in which greater explanation and analysis of the
issues is available.
Market dynamics
The private label ‘brand’ dominates dairy markets. In the UK cheese market, private
labels account for over two-thirds of all sales, whilst the equivalent share is over
40% in the Netherlands.
Danone occupies a dominant position in the Spanish yoghurt market.
In terms of market share, the most dominant chocolate confectionery brand is also in
Sweden, and is the Marabou brand.
The private label ‘brand’ leads savoury snack markets in Belgium, France and
Germany, takes second place in the Netherlands and the UK and is third in Sweden.
In terms of volume, brand sales of the leading beer brand are highest in Belgium and
the U.S., where market growth, in volume terms, is very low.
FAB (flavoured alcoholic beverages) markets are characterised by dominant

positions of the leading brands, with the number one brand holding almost 70% of
the market in Belgium, 32% in France, 32% in Italy, 34% in the Netherlands, 64% in
Spain, 28% in the UK and 38% in the U.S.
Coca-Cola dominates an analysis of the leading three soft drinks brands across eight
countries, taking top spot in six, the exceptions being France and Italy.
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In fragmented U.S. and Italian spirits markets, the leading three brands account for
just 12.8% and 9.2% of the market respectively.
Key issues in branding

Delivering the promise of a brand has become just as, if not more important than
raising initial brand awareness and is designed to boost sales and loyalty.
It is not necessarily the contents of products, or their packaging that must be

standard, or indeed the communications strategy, but it is the ultimate message and
aspirational attributes of a brand that should be consistent on a global basis.
While the major brands (the number one or two in their respective categories), are
essential for retailers to generate store traffic, such brands are not in themselves a
point of difference from other retailers.
Best-practice case studies

A design solution was required to force consumer reappraisal of the brand, to attract
new consumers and to reinforce equity of the brand with existing consumers.
Carlsberg Green label was suffering from too much ‘local’ and not enough ‘global’
with its brand. The existing brand positioning was very broad and allowed for much
interpretation.
The twenty-somethings have a riot of choice in every aspect of their lives. Getting
them to commit to a brand means fitting into their lifestyle, offering something to be
seen with, a badge of style.
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Industry opinion survey
The primary role of a brand, according to survey respondents, is to increase sales
and profits of the brand-owner. Of secondary importance is the brand’s ability to
engender and improve customer loyalty.
The leisure industry (encompassing a wide range of activities including cinema and
travel, for example) offers very strong brand strategies that should be adapted to
food and drinks sectors.
Senior-specific issues will play a prominent role in brand developments over the next
three years, as seniors rank ahead of families and kids as the most influential
consumer sector.
Conclusions
Whilst innovation will continue to drive growth in food and drinks markets,
marketing and branding strategies have a key role to play to ensure the ultimate
success of a new product and to justify the R&D expenditure.
In the same way that product portfolios are aligning with consumer needs, so
branding strategies should focus on practical, consumer-focused solutions rather
than textbook theory.
As products become more difficult to differentiate, a successful brand strategy will

deliver a strong and trusted perception of a product that increases its customer base
and ensures the loyalty of existing customers.
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Chapter 1
Introduction
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Chapter 1 Introduction
The aim of this report
This report sets out to identify the key issues, trends and developments that influence
the decision-making process of food and drinks manufacturers when it comes to defining
their brand strategies.
Chapter structure
Following the introduction, the report breaks down into six further chapters.
Market Dynamics – Chapter 2 analyses the latest trends in global brands, from an
analysis of brand performance to the growth and development of their markets;
Key Issues in Branding Food and Drinks - Chapter 3 identifies the major issues in
branding for the food and drinks industries;
Case Studies - Chapter 4 covers in-depth case studies of key food and drink brands,
supplied by expert agency Dragon;
Industry Opinion Survey - Chapter 5 provides detailed analysis of an exclusive

industry survey conducted at the start of 2004;
Conclusions - Chapter 6 provides a concise summary of the key conclusions of the

report and identifies the major developments that will shape the future performance
of brands in food and drinks markets;
Appendix - Chapter 7 provides a glossary of terms used throughout this report and
an index of key terms.
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Branding food and drinks
As food and drinks markets become commoditised, particularly in Western Europe and
the United States, brands are playing an increasingly important role in the purchasing
decisions of consumers. The importance of brands has grown so that they are now
recognised as a significant corporate asset.
Defining a brand
Though there is no easy way to define or indeed calculate the value of a brand, they are
corporate assets that are important to investors, employees and consumers alike. In
recent years, greater recognition of the value of brands has placed greater importance on
managing them more effectively, forcing companies to treat their brands as they would
any other business asset.
Brands have ownership, symbolic and functional roles to play in the strategic
development of a company, offering a point of differentiation between competitors,
helping to secure shelf space with retailers and providing the potential for premium
prices to be charged. For a consumer, they help to generate customer demand and
ensure that a consumer is bought in for the long term through engendering loyalty. They
offer a practical means to identify products consumers know and trust and help define
their aspirations. If a brand can meet these requirements, the consumer may then
become an advocate for the brand.
For some companies, it is the company name that is the dominant brand (i.e. Heinz),
whilst for others (who are often multi-national conglomerates) it is the products they (or
their subsidiaries) produce (i.e. Smirnoff from Diageo). A third scenario sees the
company name plus a product name feature as the dominant ‘brand’ (i.e. Cadbury Dairy
Milk or Kellogg’s Cornflakes). In some instances a single company may use a
combination of all three approaches.
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As a part of a Brand Building industry opinion survey, conducted in January 2004,
respondents were asked to define what a brand means, what are the main functions of a
brand and what are the most important attributes of a market when launching a new
brand. Their responses are analysed in Chapter 5 of this report.
Where does food and drink fit in?
With the exception of Coca-Cola (judged to be the world’s most valuable brand), in a
ranking of the world’s most valuable brands, food and drinks products (and their
manufacturers) do not feature particularly highly, although they do account (together
with foodservice) for 22 of the top 100 brands. Of the 22 brands featured, three are soft
drinks brands whilst eight belong to alcoholic drinks. A further four are food brands,
with two (Nestlé and Kraft) judged to be both a food and drink brand (though Kraft is
predominantly a food brand). The remaining five are foodservice brands.
In foodservice, McDonald’s features in eighth position, Nescafé, Budweiser and Pepsi

are the highest-ranking drinks brands in 21st, 22nd and 23rd positions respectively.
Kellogg’s and Heinz are ranked as the most valuable food industry brands and these are
rated as the world’s 38th and 40th most valuable brands respectively.
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Table 1.1: Global ranking of food and drinks brands, 2003
Brand rank 2003 Brand name 2003 brand value (U.S.$ billion) Sector
1 Coca-Cola 70.45 Soft drinks

8 McDonald’s 24.70 Foodservice
21 Nescafé 12.34 Soft drinks
22 Budweiser 11.89 Alcoholic Drinks
23 Pepsi 11.78 Soft drinks
38 Kellogg's 7.44 Food
40 Heinz 7.10 Food
49 KFC 5.58 Foodservice
51 Pizza Hut 5.31 Foodservice
55 Wrigley's 5.06 Food
60 Nestlé 4.46 Food/Drinks
62 Danone 4.24 Food/drinks
63 Kraft 4.17 Food
72 Bacardi 3.43 Alcoholic Drinks
82 Hennessy 3.00 Alcoholic Drinks
85 Smirnoff 2.81 Alcoholic Drinks
88 Moet & Chandon 2.52 Alcoholic Drinks
90 Heineken 2.43 Alcoholic Drinks
93 Starbucks 2.14 Foodservice
94 Burger King 2.12 Foodservice
99 Johnnie Walker 1.72 Alcoholic Drinks
100 Jack Daniels 1.61 Alcoholic Drinks
Note: The table ranks 100 global brands that have a value greater than $1 billion. The brands were
selected according to two criteria. They had to be global in nature, deriving 20% or more of sales
from outside their home country. There also had to be publicly available marketing and financial
data on which to base the valuation.
Source: Interbrand Business Insights
Across the world’s 100 most valuable brands U.S. brands claim 62 places, including
eight of the top 10 spots. Europe accounts for just three of the world’s 20 most valuable
brands.
Brand valuation is complex and requires an understanding of both the financial and
marketing components that go to make up an economic value of a brand. One of the
most widely accepted methods of brand valuation (and that used by Interbrand in the
analysis above) identifies a brand’s future earnings and discounts these to a net present
value using a rate that reflects the risk of those earnings being realised.
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Table 1.2: Global brand ranking by brand value, 2003
Brand name Brand value Change in Parent company Country
2003 (U.S.$ billion) brand value (%)
Coca-Cola 70.45 1.2% Coca-Cola Company U.S.
Microsoft 65.17 1.7% Microsoft Corp. U.S.
IBM 51.77 1.1% International Business Machines Corp. U.S.
GE 42.34 2.5% General Electric Company U.S.
Intel 31.11 0.8% Intel Corp. U.S.
Nokia 29.44 -1.8% Nokia Corp. Finland
Disney 28.04 -4.2% Walt Disney Company U.S.
McDonald’s 24.70 -6.3% McDonald's Corp. U.S.
Marlboro 22.18 -8.2% Philip Morris Companies Inc. U.S.
Mercedes 21.37 1.7% DaimlerChrysler AG Germany
Toyota 20.78 6.8% Toyota Motor Corp. Japan
Hewlett-Packard 19.86 18.4% Hewlett Packard Company U.S.
Citibank 18.57 2.8% Citigroup Inc. U.S.
Ford 17.07 -16.3% Ford Motor Company U.S.
American Express 16.83 3.3% American Express Company U.S.
Gillette 15.98 6.8% Gillette Company U.S.
Cisco 15.79 -2.7% Cisco Systems Inc. U.S.
Honda 15.63 3.8% Honda Motor Company Japan
BMW 15.11 4.8% Bayerische Motoren Werke AG Germany
Sony 13.15 -5.4% Sony Corp. Japan
Nescafé 12.34 -3.9% Nestlé Switzerland
Budweiser 11.89 4.8% Anheuser-Busch Companies U.S.
Pepsi 11.78 5.7% PepsiCo U.S.
Oracle 11.26 -2.2% Oracle U.S.
Samsung Electronics 10.85 n/a Samsung Corporation S. Korea
Morgan Stanley 10.69 -4.6% Morgan Stanley U.S.
Merrill Lynch 10.52 -6.3% Merrill Lynch & Company U.S.
Pfizer 10.46 7.1% Pfizer U.S.
Dell 10.37 12.2% Dell Corp. U.S.
Merck 9.41 3.0% Merck & Company U.S.
JP Morgan 9.12 -5.9% JP Morgan Chase & Company U.S.
Nintendo 8.19 -11.2% Nintendo Company Japan
Nike 8.17 5.8% Nike U.S.
Kodak 7.83 -19.0% Eastman Kodak U.S.
SAP 7.71 13.9% SAP Germany
Gap 7.69 3.8% Gap U.S.
HSBC 7.57 n/a HSBC Holdings UK
Kellogg's 7.44 3.5% Kellogg Company U.S.
Canon 7.19 7.0% Canon Japan
Heinz 7.10 -3.4% HJ Heinz Company U.S.
Goldman Sachs 7.04 -2.1% Goldman Sachs Group U.S.
Volkswagen 6.94 -3.7% Volkswagen Germany
IKEA 6.92 5.8% Ikea International Sweden
Harley-Davidson 6.77 8.0% Harley-Davidson U.S.
Louis Vuitton 6.71 -4.8% LVMH Moët Hennessy Louis Vuitton France
MTV 6.28 3.3% Viacom U.S.
L'Oreal 5.60 10.2% L'Oréal France
Xerox 5.58 5.1% Xerox Corp. U.S.
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Table 1.3: Global brand ranking by brand value, 2003 continued
KFC 5.58 4.3% Yum! Brands U.S.
Apple 5.55 4.3% Apple Computer U.S.
Pizza Hut 5.31 -12.2% Yum! Brands. U.S.
Accenture 5.30 2.3% Accenture U.S.
Gucci 5.10 -3.8% Gucci Group Italy
Kleenex 5.06 0.4% Kimberly Clark Corp. U.S.
Wrigley's 5.06 6.5% W.M. Wrigley Jr. Company U.S.
Colgate 4.69 2.0% Colgate Palmolive Company U.S.
Avon 4.63 5.2% Avon Products U.S.
Sun Microsystems 4.46 -6.5% Sun Microsystems, Inc. U.S.
Philips 4.46 -2.2% Koninklijke Philips Electronics Netherlands
Nestlé 4.46 0.7% Nestlé Switzerland
Chanel 4.32 1.2% Chanel France
Danone 4.24 4.7% Groupe Danone France
Kraft 4.17 2.2% Kraft Foods Inc. U.S.
AOL 3.96 -8.5% AOL Time Warner, Inc. U.S.
Yahoo! 3.90 1.0% Yahoo! Inc. U.S.
Time 3.78 2.7% AOL Time Warner, Inc. U.S.
Adidas 3.68 -0.3% Adidas Germany
Rolex 3.67 -0.5% Montres Rolex Switzerland
BP 3.58 5.6% BP UK
Tiffany & Co. 3.54 1.7% Tiffany & Co. U.S.
Duracell 3.44 0.9% Gillette Company U.S.
Bacardi 3.43 2.7% Bacardi & Company Limited Bermuda
Hermes 3.42 n/a Hermès International France
Amazon.Com 3.40 6.9% Amazon.com Inc. U.S.
Caterpillar 3.36 4.3% Caterpillar Inc. U.S.
Reuters 3.30 -28.4% Reuters Group UK
Levi's 3.30 -4.3% Levis Strauss & Co. U.S.
Hertz 3.29 -2.1% Ford Motor Company U.S.
Panasonic 3.26 3.8% Matsushita Electric Industrial Company Japan
Ericsson 3.15 -12.3% Telefonaktiebolaget LM Ericsson Sweden
Motorola 3.10 -9.4% Motorola Inc. U.S.
Hennessy 3.00 n/a LVMH Moët Hennessy Louis Vuitton France
Shell 2.98 6.0% Royal Dutch Petroleum Co. UK/Neth.
Boeing 2.86 -3.7% Boeing Company U.S.
Smirnoff 2.81 3.3% Diageo UK
Johnson & Johnson 2.71 8.0% Johnson & Johnson U.S.
Prada 2.53 1.6% I Pellettieri d'Italia. Italy
Moet & Chandon 2.52 2.9% LVMH Moët Hennessy Louis Vuitton France
Nissan 2.50 n/a Nissan Motor Co.. Japan
Heineken 2.43 1.3% Heineken NV Netherlands
Mobil 2.41 2.1% Exxon Mobil Corp. U.S.
Nivea 2.22 7.8% Beiersdorf Germany
Starbucks 2.14 9.2% Starbucks Corp. U.S.
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Table 1.4: Global brand ranking by brand value, 2003 continued
Burger King 2.12 -1.9% Diageo U.S.
Rl/Polo 2.05 6.2% Polo Ralph Lauren Corporation U.S.
Fedex 2.03 5.7% Fedex Corp. U.S.
Barbie 1.87 -3.6% Mattel Inc. U.S.
Wall St. Journal 1.76 -10.2% Dow Jones & Company Inc. U.S.
Johnnie Walker 1.72 4.2% Diageo PLC UK
Jack Daniels 1.61 1.9% Brown-Forman Corp. U.S.
Note: The table ranks 100 global brands that have a value greater than $1 billion. The
brands were selected according to two criteria. They had to be global in nature, deriving
20% or more of sales from outside their home country. There also had to be publicly
available marketing and financial data on which to base the valuation.
In a ranking of the world’s top 25 companies by media spend in 2001; six food and
drink manufacturers are led by Unilever (however the media-spend is not broken down
by segment or activity within a company). The company is followed in the ranking by
Nestlé, McDonald’s (albeit in foodservice), Coca-Cola, PepsiCo and Mars.
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Table 1.5: Leading global media spend by company
Company Headquarters Media Spend $mn 2001
Procter & Gamble Co. Cincinnati 3,820

General Motors Corp. Detroit 3,029
Unilever London/Rotterdam 3,006
Ford Motor Co. Dearborn, Mich. 2,309
Toyota Motor Corp. Toyota City, Japan 2,284
AOL Time Warner New York 2,100
Philip Morris Cos. New York 1,935
DaimlerChrysler Stuttgart 1,835
Nestle Vevey, Switzerland 1,799
Volkswagen Wolfsburg, Germany 1,574
Honda Motor Co. Tokyo 1,426
McDonalds Corp. Oak Brook, Ill. 1,405
Coca-Cola Co. Atlanta 1,402
L’Oreal Paris 1,349
Walt Disney Co. Burbank, Calif. 1,260
Johnson & Johnson New Brunswick, N.J. 1,227
Nissan Motor Co. Tokyo 1,224
Sony Corp. Tokyo 1,219
GlaxoSmithKline Greenford, Middlesex, U.K. 1,130
PepsiCo Purchase, N.Y. 1,026
PSA Peugeot Citroen Paris 1,006
Pfizer New York 992
Mars Inc. McLean, Va. 953
Fiat Turin, Italy 891
Vivendi Universal Paris 881
Note: Companies ranked by total worldwide measured ad spending from Nielsen Media Research,
TNS Media Intelligence, Ibope & others.
Source: Advertising Age’s Global Marketers Report 2002 Business Insights
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Chapter 2
Market Dynamics
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Chapter 2 Market Dynamics
Summary
The private label ‘brand’ dominates dairy markets. In the UK cheese market,
private labels account for over two-thirds of all sales, whilst the equivalent share is
over 40% in the Netherlands.
Danone occupies a dominant position in the Spanish yoghurt market.
In terms of market share, the most dominant chocolate confectionery brand is also
in Sweden, and is the Marabou brand.
The private label ‘brand’ leads savoury snack markets in Belgium, France and
Germany, takes second place in the Netherlands and the UK and is third in
Sweden.
In terms of volume, brand sales of the leading beer brand are highest in Belgium
and the U.S., where market growth, in volume terms, is very low.
FAB (flavoured alcoholic beverages) markets are characterised by dominant

positions of the leading brands, with the number one brand holding almost 70% of
the market in Belgium, 32% in France, 32% in Italy, 34% in the Netherlands, 64%
in Spain, 28% in the UK and 38% in the U.S.
Coca-Cola dominates an analysis of the leading three soft drinks brands across
eight countries, taking top spot in six, the exceptions being France and Italy.
In fragmented U.S. and Italian spirits markets, the leading three brands account for
just 12.8% and 9.2% of the market respectively.
Introduction
This chapter analyses the market dynamics of key food and drinks markets across nine
major countries in Europe: Belgium, France, Germany, Italy, Netherlands, Spain,
Sweden and the UK and United States.
24
TLFeBOOK
In addition to a brief introduction to each market, quantifying the size and growth rates
of key markets and categories, the chapter goes on to analyse the leading brands within
those markets.
To put each of the markets in context, across the nine countries, average annual per
capita spending on the leading chocolate confectionery brand was $5.70 in 2002. This
contrasts with:
$7.27 for the leading yoghurt brand;
$14.95 for cheese;
$6.65 for savoury snacks.
In terms of drinks, average per capita annual consumption of the leading beer brand was
16.95 litres in 2002, compared to:
0.42 litres for FABs;
14.62 litres for carbonated soft drinks;
10.46 litres for bottled waters;
2.62 litres for juices;
0.59 litres for spirits.
Brand dynamics in dairy
The following section analyses market growth in the cheese, chilled snacks and desserts,
cream, milk and yoghurt categories of the dairy market across nine countries.
25
TLFeBOOK
Dairy market growth strongest in Spain
Over the 1998—2003 period, dairy markets recorded strong growth. Overall dairy
markets grew by over 20% in France, Netherlands, Spain and the U.S. The slowest
growth was recorded in the UK, where the market grew by 10.6% over the six-year
period.
At a category level, the strongest performers over the 1998—2003 period were the U.S.
yoghurt, Spanish yoghurt, Swedish chilled snacks and desserts and the UK chilled
snacks and desserts segments, which each recorded growth in excess of 50% over the
six year period. In addition, the Spanish and U.S. cream segments both recorded growth
in excess of 40%.
Table 2.6: Dairy market dynamics, 1998 and 2003

U.S.$ mn Category 1998 2003 % 98-03
Belgium Total* 2,358.97 2,677.35 13.5%

France Total* 9,743.27 11,711.68 20.2%
Germany Total* 9,209.12 10,435.61 13.3%
Italy Total* 11,438.01 12,891.86 12.7%
Netherlands Total* 2,349.26 2,987.19 27.2%
Spain Total* 4,714.37 6,026.22 27.8%
Sweden Total* 2,075.63 2,425.82 16.9%
UK Total* 8,316.74 9,200.79 10.6%
U.S. Total* 38,543.97 48,089.58 24.8%
*Includes cheese, milk, cream, yoghurt, chilled snacks and desserts
Source: Author analysis, Datamonitor Business Insights
Dairy brands
Table 2.7 provides analysis of leading three brands in the cheese and yoghurt markets
across Europe and the U.S., by market share (in value terms). Shares in all following
tables are related to the specific segment, i.e. Philadelphia has a 1.8% share (in value
terms) of the cheese market in Belgium.
26
TLFeBOOK
The private label ‘brand’ dominates dairy markets, taking the leading position in 11 of
the 18 categories analysed below. In the UK cheese market, private labels account for
over two-thirds of all sales, whilst the equivalent share is over 40% in the Netherlands.
Table 2.7: Dairy brand dynamics by key category, 2002

Country Sector Brand Manufacturer % Value
Belgium Cheese Private label Private label 5.0

Belgium Cheese Philadelphia Kraft Foods Belgium SA 1.8
Belgium Cheese Société Lactalis Europe du Nord 1.2
Belgium Yoghurt Private label Private label 15.7
Belgium Yoghurt Mannequin Nestlé Belgilux SA 9.6
Belgium Yoghurt Carrefour Carrefour Belgium 9.3
France Cheese Private label Private label 19.4
France Cheese Président Lactalis, Groupe 6.6
France Cheese Cœur de Lion Cie Laitière Européenne SCA (CLE) 3.5
France Yoghurt Yoplait Yoplait SA 16.8
France Yoghurt Private label Private label 16.7
France Yoghurt Danone Danone France SA 14.9
Germany Cheese Private label Private label 28.3
Germany Cheese Philadelphia Kraft Foods Deutschland GmbH 4.8
Germany Cheese Leerdammer Leerdammer Co Deutschland GmbH 4.5
Germany Yoghurt Private label Private label 14.4
Germany Yoghurt Ehrmann Ehrmann AG 12.9
Germany Yoghurt Bauer Bauer KG, J 9.6
Italy Cheese Private label Private label 3.8
Italy Cheese Unigrana Unigrana SpA 1.9
Italy Cheese Sottilette Kraft Jacobs Suchard SpA 1.8
Italy Yoghurt Yomo Sitia Yomo SpA 20.1
Italy Yoghurt Müller Molkerei Alois Müller GmbH 14.9
Italy Yoghurt Danone Danone SpA 10.3
Netherlands Cheese Private label Private label 41.5
Netherlands Cheese Maaslander Westland BV 5.3
Netherlands Cheese Milner Campina Melkunie BV 4.9
Netherlands Yoghurt Private label Private label 25.6
Netherlands Yoghurt Campina Campina Melkunie BV 21.2
Netherlands Yoghurt Mona Campina Melkunie BV 12.5
27
TLFeBOOK
Table 2.8: Dairy brand dynamics by key category, 2002 continued
Spain Cheese Garcia Baquero Lácteas García-Baquero SA 5.9

Spain Cheese El Caserio Kraft Foods España SA 4.8
Spain Cheese Gran Capitan Queserías Ibéricas SA 2.9
Spain Yoghurt Danone Danone SA 51.8
Spain Yoghurt Private label Private label 8.6
Spain Yoghurt Nestlé Nestlé España SA (Grupo) 7.9
Sweden Cheese Arla Arla Foods AB 14.7
Sweden Cheese Ostmästaren Ostmästaren AB 11.7
Sweden Cheese NorrOst NorrOst AB 8.5
Sweden Yoghurt Arla Arla Foods AB 40.6
Sweden Yoghurt Yoggi Arla Foods AB 38.1
Sweden Yoghurt Valio Valio Oy 4.8
UK Cheese Private label Private label 68.3
UK Cheese Dairylea Kraft Foods UK Ltd 2.8
UK Cheese Cathedral City Dairy Crest Plc 2.3
UK Yoghurt Private label Private label 25.5
UK Yoghurt Müller Corners Müller Dairy (UK) Ltd 16.3
UK Yoghurt Müller Light Müller Dairy (UK) Ltd 13.8
U.S. Cheese Private label Private label 28.1
U.S. Cheese Kraft Kraft Foods Inc 16.0
U.S. Cheese Philadelphia Kraft Foods Inc 6.3
U.S. Yoghurt Yoplait General Mills Inc 29.1
U.S. Yoghurt Dannon Dannon Co, The 25.9
U.S. Yoghurt Private label Private label 12.9
Brand analysis in dairy markets: cheese
The following table analyses the leading cheese brands in each country, taking into
account their annual sales per person, in value terms. In Germany, on average, each
person spends over $14 on cheese per year, in a market that grew by 17.8% between
1998 and 2003.
Private labels dominate the leading cheese brands. The highest per capita spending on a
cheese brand is in the Netherlands, whilst the smallest expenditure occurs in Spain,
where each person spends around $2 on average, per year, on the Garcia Baquero
brand.
28
TLFeBOOK
Table 2.9: Cheese brand dynamics, 1998—2003
Country Leading brand Brand sales Market Brand share of
per capita (U.S.$) growth 98-03 national market
Belgium Private label 6.44 15.6% 5.0%

France Private label 17.80 17.8% 19.4%
Germany Private label 14.23 17.8% 28.3%
Italy Private label 4.80 11.1% 3.8%
Netherlands Private label 32.41 33.1% 41.5%
Spain Garcia Baquero 2.02 25.9% 5.9%
Sweden Arla 14.72 9.8% 14.7%
UK Private label 29.70 13.9% 68.3%
U.S. Private label 12.43 31.8% 28.1%
Figure 2.1 illustrates the comparative positions of cheese markets across nine countries
in terms of the leading brand. Per capita expenditure on the brand in 2002 is illustrated
by the size of each ‘bubble’, whilst the position of the bubbles refers to the relative
dominance of the brand (in terms of market share in 2002) and market growth (of the
overall cheese category) over the 1998—2003 period.
Therefore, expenditure per capita on the leading cheese brand was highest in the
Netherlands in 2002 (the biggest bubble), whilst the leading cheese brand was most
dominant in the UK. Growth rates for the category were relatively low in Italy, whilst
the leading brand accounts for a small proportion of a very fragmented market.
29
TLFeBOOK
Figure 2.1: Cheese brand dynamics, 1998—2003
50.0% Faster growing Sales/

markets Capita
Cheese Market Growth (%) 1998-2003
40.0% Netherlands
US Greater Brand Share
30.0%
Spain
France
20.0% Belgium
Germany
10.0% UK
Italy
Sweden
0.0%
0.0% 20.0% 40.0% 60.0% 80.0%
Brand Share of National Market (%) 2002
Brand analysis in dairy markets: yoghurt
The following table highlights that private labels do not dominate yoghurt markets in the
same way as cheese, as they account for the leading ‘brand’ in just four of the nine
countries analysed (as opposed to seven out of nine for cheese). Per capita expenditure
on the leading brand is relatively low in fragmented markets, with the exception of
Danone in Spain and Arla in Sweden.
Table 2.10: Yoghurt brand dynamics, 1998—2003


France Yoplait 5.00 27.3% 16.8%
Italy Yomo 3.83 35.1% 20.1%
Spain Danone 19.91 56.4% 51.8%
Sweden Arla 14.83 25.8% 40.6%
U.S. Yoplait 3.46 59.6% 29.1%
30
TLFeBOOK
Danone occupies a dominant position in the Spanish yoghurt market. Annual
expenditure per capita on the brand approached $20 in 2002, as the brand took a 51.8%
share of the market that grew by 56.4% between 1998 and 2003.
Figure 2.2: Yoghurt brand dynamics, 1998—2003
70.0%
Yoghurt Market Growth (%) 1998-2003
US
Spain
60.0%
50.0%
Netherlands
40.0% Italy
30.0% France Faster growing Sales/

markets Capita
Belgium UK
20.0% Sweden
10.0% Greater Brand Share

Germany
0.0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
Of all the countries analysed, the leading yoghurt brand that has least dominance is
found in Germany, where it accounts for 14.4% of a market that grew by just 9.3% over
the six-year period. Per capita spending on the brand was $2.74 in 2002.
Brand dynamics in confectionery
The following section analyses market growth in the confectionery market across nine
countries.
Confectionery markets boosted by growth in gum segments
Over the 1998—2003 period, confectionery markets recorded steady growth, though
rates were lower than those seen in dairy markets. Only one of the nine countries –
31
TLFeBOOK
Spain - saw growth of over 20% between 1998 and 2003, whilst the UK market
recorded growth of just 5.9% over the six-year period.
At a category level, the strongest results over the 1998—2003 period were all in the
gum sector, with the Italian gum market (which grew by 65.7% in value terms), Spanish
and UK markets being particularly strong performers.
Table 2.11: Confectionery market dynamics, 1998 and 2003

U.S.$ mn Category 1998 2003 % 98-03
Belgium Total* 1,063.76 1,178.68 10.8%

France Total* 3,449.96 4,072.61 18.1%
Germany Total* 7,217.01 8,336.23 15.5%
Italy Total* 3,107.50 3,460.39 11.4%
Spain Total* 1,043.89 1,297.89 24.3%
Sweden Total* 925.85 1,016.91 9.8%
UK Total* 7,711.38 8,163.55 5.9%
U.S. Total* 22,456.46 25,335.69 12.8%
* Includes chocolate, gum, sugar confectionery
Private labels not as dominant in confectionery
Analysis of leading three brands in the chocolate, gum and sugar confectionery markets
across Europe and the U.S. indicates that private labels do not dominate confectionery
markets in the same way as dairy.
32
TLFeBOOK
Table 2.12: Confectionery brand dynamics by category, 2002
Belgium Chocolate Côte d’Or Kraft Foods Belgium SA 11.3

Belgium Chocolate Leonidas Leonidas SA 7.1
Belgium Chocolate Private label Private label 5.9
Belgium Gum Stimorol Stimorol Belgium SA 32.5
Belgium Gum Sportlife Continental Sweets Belgium SA 19.3
Belgium Gum Freedent Wrigley Jr Co, William 7.5
Belgium Sugar Private label Private label 16.5
Belgium Sugar Leo Continental Sweets Belgium SA 7.6
Belgium Sugar Haribo Haribo GmbH 6.7
France Chocolate Artisanal 18.6
France Chocolate Private label Private label 5.4
France Chocolate Milka Kraft Foods France SA 4.7
France Gum Hollywood Cadbury France SA 36.2
France Gum Freedent Wrigley France SNC 28.8
France Gum Stimorol Dandy A/S 6.5
France Sugar Private label Private label 10.2
France Sugar Lutti Lamy Lutti SA 8.1
France Sugar Artisanal 7.8
Germany Chocolate Milka Kraft Foods Deutschland GmbH 10.0
Germany Chocolate Lindt Chocoladefabriken Lindt & Sprüngli 6.7
Germany Chocolate Mon Chéri Ferrero OHG mbH 4.9
Germany Gum Orbit Wrigley GmbH 24.6
Germany Gum Hubba Bubba Wrigley GmbH 11.1
Germany Gum Extra Wrigley GmbH 10.2
Germany Sugar Private label Private label 8.6
Germany Sugar Nimm 2 Storck KG, August 8.4
Germany Sugar Haribo Haribo GmbH 6.0
Italy Chocolate Perugina Nestlé Italiana SpA 7.7
Italy Chocolate Kinder Surprise Ferrero SpA 7.5
Italy Chocolate Lindt Lindt & Sprüngli SpA 5.3
Italy Gum Vivident Perfetti Van Melle SpA 26.9
Italy Gum Happydent Perfetti Van Melle SpA 14.0
Italy Gum Daygum Perfetti Van Melle SpA 12.9
Italy Sugar Golia Perfetti Van Melle SpA 14.2
Italy Sugar Dietorelle Leaf Italia SpA 6.5
Italy Sugar Morositas Perfetti Van Melle SpA 6.0
Netherlands Chocolate Private label Private label 10.7
Netherlands Chocolate Merci Storck BV 5.9
Netherlands Chocolate Baronie Baronie-De Heer BV 4.9
Netherlands Gum Sportlife Red Band Venco Confectionery BV 36.4
Netherlands Gum Stimorol Stimorol Nederland BV 22.3
Netherlands Gum Xylifresh Red Band Venco Confectionery BV 10.7
Netherlands Sugar Venco Red Band Venco Confectionery BV 9.3
Netherlands Sugar Private label Private label 7.9
Netherlands Sugar Klene Perfetti Van Melle Group 7.9
33
TLFeBOOK
Table 2.13: Confectionery brand dynamics by category, 2002 continued
Spain Chocolate Nestlé Nestlé España SA (Grupo) 12.3

Spain Chocolate Artisanal 8.6
Spain Chocolate Private label Private label 8.5
Spain Gum Trident Adams Spain SA 25.2
Spain Gum Orbit Wrigley Co SA 13.1
Spain Gum Trex Joyco España SA 10.3
Spain Sugar Private label Private label 5.5
Spain Sugar Dietorelle CSM NV 5.0
Spain Sugar Halls Adams Spain SA 4.5
Sweden Chocolate Marabou Kraft Sverige AB 17.9
Sweden Chocolate Cloetta Cloetta Fazer AB 7.1
Sweden Chocolate Aladdin Kraft Sverige AB 4.6
Sweden Gum Extra Wrigley Scandinavia AB 27.1
Sweden Gum Wrigley’s Wrigley Scandinavia AB 21.9
Sweden Gum V6 Fertin AS 19.8
Sweden Sugar Läkerol MalacoLeaf AS 5.4
Sweden Sugar Malaco MalacoLeaf AS 4.4
Sweden Sugar Webes Webes Konfektyrindustri AB 3.0
UK Chocolate Private label Private label 4.9
UK ChocolateCadbury’s Dairy Milk Cadbury Trebor Bassett Ltd 4.6
UK Chocolate Mars Masterfoods UK Ltd 4.5
UK Gum Extra Wrigley Co Ltd, The 35.0
UK Gum Airwaves Wrigley Co Ltd, The 15.0
UK Gum Orbit Wrigley Co Ltd, The 14.1
UK Sugar Private label Private label 8.5
UK Sugar Trebor Cadbury Trebor Bassett Ltd 5.8
UK Sugar Haribo Haribo Dunhills (Pontefract) Plc 5.3
U.S. Chocolate M&M’s Mars Inc 10.8
U.S. Chocolate Reese’s Hershey Foods Corp 8.1
U.S. Chocolate Snickers Mars Inc 7.8
U.S. Gum Extra Wrigley Jr Co, William 12.6
U.S. Gum Trident Warner-Lambert Co 9.6
U.S. Gum Dentyne Warner-Lambert Co 6.0
U.S. Sugar Y&S Twizzler Hershey Foods Corp 5.9
U.S. Sugar Life Savers Kraft Foods Inc 5.4
U.S. Sugar Starburst Mars Inc 3.7
Brand analysis in confectionery markets: chocolate
Expenditure per capita on a country’s leading chocolate brand is highest in Sweden,

although growth rates for the category were relatively low. The most dominant
chocolate confectionery brand, after the 18.6% share accounted for by artisanal
products in France, was also in Sweden, and was taken by the Marabou brand, which
accounts for 17.9% of the Swedish chocolate confectionery market.
34
TLFeBOOK
Table 2.14: Chocolate confectionery brand dynamics, 1998—2003
Belgium Côte d’Or 9.07 11.1% 11.3%

France Artisanal 8.62 15.7% 18.6%
Germany Milka 6.34 10.2% 10.0%
Italy Perugina 2.61 8.8% 7.7%
Spain Nestlé 1.50 19.2% 12.3%
Sweden Marabou 9.73 7.7% 17.9%
U.S. M&M’s 4.98 9.3% 10.8%
Belgium, France and Sweden clearly have the highest per capita spending on leading
chocolate brands in their own countries. In Sweden and France these brands also hold
dominant positions, with market shares approaching 20%. Over the six-year period
1998—2003, average market growth across the nine countries was 10.6%.
Figure 2.3: Chocolate confectionery brand dynamics, 1998—2003
Faster growing Sales/

30.0%
Chocolate Market Growth (%) 1998-2003
markets Capita
25.0%
Spain
Netherlands Greater Brand Share
20.0%
15.0% Germany Belgium

Italy France
10.0%
5.0% US Sweden
0.0%
UK
-5.0%
-10.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
35
TLFeBOOK
Brand dynamics in savoury snacks
The following section analyses market growth in the corn-based snacks, nuts and seeds,
popcorn and potato chips categories of the savoury snacks market across nine countries.
Savoury snacks markets growing strongly in most countries
Over the 1998—2003 period, most savoury snack markets recorded strong growth,
with the exception of the UK, Netherlands and Sweden (where the market actually
decreased in size). In the remaining six countries, growth rates above 20% for the six-
year period were common, with the Italian market growing by 51%.
Table 2.15: Savoury snack market dynamics, 1998 and 2003

U.S.$ mn Category 1998 2003 % 98-03
Belgium Total* 71.93 94.19 30.9%

France Total* 630.06 791.03 25.5%
Germany Total* 1,130.64 1,359.46 20.2%
Italy Total* 387.18 584.50 51.0%
Netherlands Total* 528.50 567.87 7.4%
Spain Total* 447.75 628.07 40.3%
Sweden Total* 302.74 263.86 -12.8%
UK Total* 4,170.23 4,443.36 6.5%
U.S. Total* 17,817.23 23,425.52 31.5%
* Includes corn-based snacks, nuts & seeds, popcorn, potato chips, other savoury snacks.
At a category level, the strongest results over the 1998—2003 period saw markets grow
in excess of 30%. These were the Belgian corn-based snacks and potato chips segments,
the Italian popcorn segment, the Spanish corn-based snacks, nuts and seeds and potato
chip segments, the UK popcorn segment and the U.S. nuts and seeds and potato chip
segments. Above all of these, recording growth rates in excess of 100%, were the Italian
corn-based snack market and the popcorn segment in the Netherlands.
36
TLFeBOOK
San Carlo and Smith’s: the dominant savoury snack brands
Analysis of leading three brands in the savoury snack markets across Europe and the
U.S. shows that the private label ‘brand’ leads the market in Belgium, France and
Germany, takes second place in the Netherlands and the UK and is third in Sweden.
Private labels hold the most dominant position in France, where they account for 27.1%
of the market.
Table 2.16: Savoury snacks brand dynamics, 2002

Country Brand Manufacturer % Value
Belgium Private label Private label 15.7

Belgium Delhaize Delhaize “Le Lion” SA 10.3
Belgium Carrefour Carrefour Belgium 8.9
France Private label Private label 27.1
France Vico Vico SA 7.2
France Bénénuts Douwe Egberts France SA 5.0
Germany Private label Private label 23.2
Germany Funny Frisch Intersnack Knabber-Gebäck GmbH 11.6
Germany Ültje Ültje GmbH & Co KG 9.4
Italy San Carlo Unichips Italia Spa 29.4
Italy Pringles Procter & Gamble Italia SpA 10.9
Italy Pai Unichips Italia Spa 6.0
Netherlands Smith’s Smiths Food Group BV 31.2
Netherlands Private label Private label 19.8
Netherlands Duyvis Douwe Egberts BV 9.9
Spain Matutano Snack Ventures SA 19.8
Spain Borges Borges SA 12.3
Spain Ruffles Snack Ventures SA 7.7
Sweden OLW Chips Scandinavian Co AB 23.2
Sweden Estrella Estrella AB 20.6
Sweden Private label Private label 6.7
UK Walkers Walkers Snack Foods Ltd 24.8
UK Private label Private label 12.7
UK Pringles Procter & Gamble Ltd 6.1
U.S. Lay’s Frito-Lay Co 11.8
U.S. Doritos Frito-Lay Co 7.8
U.S. Tostitos Frito-Lay Co 6.4
In the U.S., the leading three savoury snack brands take a 26% share of the market, with
the leading brand, Lay’s, holding an 11.8% share.
37
TLFeBOOK
Brand analysis in savoury snacks markets
Expenditure per capita on a country’s leading savoury snacks brand is highest in the UK,
where consumers spent over $18 per person on the Walkers brand in 2002. Across
Belgium, France, Germany, Italy and Spain expenditure per person on the leading
savoury snacks brand is less that $4 per year.
Table 2.17: Savoury snacks brand dynamics, 1998—2003


Italy San Carlo 2.90 51.0% 29.4%
Netherlands Smith’s 10.60 7.4% 31.2%
Spain Matutano 3.05 40.3% 19.8%
Sweden OLW 6.96 -12.8% 23.2%
UK Walkers 18.48 6.5% 24.8%
U.S. Lay’s 9.41 31.5% 11.8%
The savoury snacks market demonstrates a variety of stages of development across the
nine countries analysed. The relatively lower dominance of brands in Spain and Italy is
compensated by the faster growing nature of those markets, whilst the leading brand in
the U.S. demonstrates the lowest market share of any leading brand across the nine
countries.
The leading savoury snacks brand in Sweden accounts for almost one-quarter of the
market, which declined by 12.8% in value terms between 1998 and 2003.
38
TLFeBOOK
Figure 2.4: Savoury snacks brand dynamics, 1998—2003

60.0%
markets Capita
Savoury Snacks Market Growth (%) 1998-
50.0%
Italy
Spain
Greater Brand Share
40.0%
30.0% France
US Belgium
2003
20.0% Germany
10.0%
UK Netherlands
0.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
-10.0%
-20.0% Sweden
Brand dynamics in alcoholic drinks

The following section analyses market growth in the alcoholic drinks market across nine
countries.
Boosted by FABS, but beer markets struggle for growth

Table 2.18: Alcoholic drinks market dynamics, 1998 and 2003
U.S.$ mn Category 1998 2003 % 98-03
Belgium Total* 4,305.49 4,369.78 1.5%

France Total* 8,712.09 8,703.08 -0.1%
Germany Total* 24,565.54 22,869.23 -6.9%
Italy Total* 6,364.51 6,850.54 7.6%
Spain Total* 10,828.64 13,594.15 25.5%
Sweden Total* 2,056.90 2,046.96 -0.5%
UK Total* 33,020.49 38,528.57 16.7%
U.S. Total* 70,673.79 77,190.35 9.2%
* Including beer, cider, FABs
At a category level, the strongest results over the 1998—2003 period were all in the
FAB sector, with the UK market being a particularly strong performer. Over the 1998—
39
TLFeBOOK
2003 period, beer markets recorded little growth, outside of Spain, the UK and the U.S.
The French, German and Swedish markets actually fell in value over the six-year period.
FAB markets characterised by dominant leading brands
Analysis of the leading three brands in the beer market across Europe and the U.S.
shows that private labels do not exert as much influence as in food markets. In the beer
category, the leading brand holds significant share in Belgium (34%), France (27%),
Netherlands (18%), Spain (18%), Sweden (19%) and U.S. (34%). Only in Germany do
private labels hold the number one position in beer, with a 6.3% share of the category.
Table 2.19: Beer brand dynamics, 2002

Country Sector Brand Brand owner %Volume
Belgium Beer Jupiler Interbrew NV SA 33.9

Belgium Beer Private label 10.3
Belgium Beer Maes Pils Scottish & Newcastle Plc 8.8
Belgium FABs Bacardi Bacardi & Co Ltd 68.9
Belgium FABs Smirnoff Diageo Plc 9.9
Belgium FABs Eristoff Bacardi & Co Ltd 7.6
France Beer Kronenbourg Scottish & Newcastle Plc 27.2
France Beer Heineken Heineken NV 11.8
France Beer Stella Artois Interbrew NV SA 9.5
France Cider/Perry Private label 37.3
France Cider/Perry Loïc Raison Pernod Ricard Groupe 21.0
France Cider/Perry Ecusson CCLF 10.4
France FABs Panach’ Heineken NV 32.0
France FABs Force 4 Scottish & Newcastle Plc 21.6
France FABs Private label 11.3
Germany Beer Private label 6.3
Germany Beer Krombacher Krombacher Brauerei 4.7
Germany Beer Warsteiner Warsteiner Brauerei Haus Cramer KG 4.5
Germany FABs Karlsberg Karlsberg Brauerei GmbH & Co KG 17.3
Germany FABs Holsten Holsten-Brauerei AG 16.0
Germany FABs Henninger Actris AG 11.5
40
TLFeBOOK
Table 2.20: Beer brand dynamics, 2002 continued
Country Sector Brand Brand owner %Volume
Italy Beer Peroni Peroni, Gruppo 12.3

Italy Beer Heineken Heineken NV 7.0
Italy Beer Moretti Heineken NV 5.4
Italy FABs Campari Soda Campari Milano SpA, Davide 32.1
Italy FABs Martini Baby Bacardi & Co Ltd 9.8
Italy FABs Aperol Soda Allied Domecq Plc 7.4
Netherlands Beer Heineken Heineken NV 18.0
Netherlands Beer Amstel Heineken NV 17.8
Netherlands Beer Grolsch Grolsch, Koninklijke NV 14.3
Netherlands FABS Bacardi Bacardi & Co Ltd 33.5
Netherlands FABS Bols Rémy Cointreau 19.1
Netherlands FABS Two Dogs Pernod Ricard Groupe 6.8
Spain Beer Cruzcampo Heineken NV 18.0
Spain Beer Mahou Mahou SA 14.1
Spain Beer Damm SA Damm 13.2
Spain Cider/Perry El Gaitero Valle, Ballina y Fernández SA 33.3
Spain Cider/Perry Private label 11.7
Spain Cider/Perry Pomar Grusifas SA 5.9
Spain FABs Don Simón J García Carrión SA 63.6
Spain FABs Peñasol Félix Solís SA 10.9
Spain FABs Siesta J García Carrión SA 8.4
Sweden Beer Pripps Orkla Group 19.0
Sweden Beer Spendrups Spendrups Bryggeri AB 8.8
Sweden Beer Falcon Carlsberg A/S 6.1
Sweden Cider/Perry Kopparbergs Åbro Bryggeri AB 32.9
Sweden Cider/Perry Rekorderlig Cider Åbro Bryggeri AB 16.3
Sweden Cider/Perry Halmstad Cider Krönleins Bryggeri AB 5.2
Sweden FABs Cooler Club Diageo Plc 78.5
Sweden FABs Bartles & Jaymes E & J Gallo Winery 6.3
Sweden FABs Hooper’s Hooch Interbrew NV SA 5.4
UK Beer Carling Interbrew NV SA 12.3
UK Beer Foster’s Foster’s Brewing Group Ltd 9.6
UK Beer Stella Artois Interbrew NV SA 7.2
UK Cider/Perry Strongbow HP Bulmer Holdings Plc 33.4
UK Cider/Perry Dry Blackthorn Constellation Brands Inc 12.2
UK Cider/Perry Woodpecker HP Bulmer Holdings Plc 7.9
UK FABs Smirnoff Diageo Plc 27.7
UK FABs Bacardi Breezer Bacardi & Co Ltd 24.1
UK FABs WKD Beverage Brands (UK) Ltd 6.9
U.S. Beer Budweiser Anheuser-Busch Cos Inc 34.1
U.S. Beer Miller SABMiller plc 15.0
U.S. Beer Coors Coors Co, Adolph 8.8
U.S. Cider/Perry Hornsby’s E & J Gallo Winery 31.9
U.S. Cider/Perry Woodchuck HP Bulmer Holdings Plc 20.2
U.S. Cider/Perry Cider Jack American Hard Cider Co 15.3
U.S. FABs Smirnoff Ice Diageo Plc 37.6
U.S. FABsMike’s Hard Lemonade Mark Anthony Brands Ltd 16.7
U.S. FABs Skyy Blue Allied Domecq Plc 8.2
41
TLFeBOOK
FAB markets are characterised by dominant positions of the leading brands, with the
number one brand holding almost 70% of the market in Belgium, 32% in France, 32% in
Italy, 34% in the Netherlands, 64% in Spain, 28% in the UK and 38% in the U.S.
Brand analysis in beer markets: beer
In terms of volume, brand sales per capita of the leading beer brand are highest in
Belgium and the U.S., where market growth, in volume terms, is very low. In both these
markets, the leading brand accounts for around one-third of the market.
Table 2.21: Beer brand dynamics, 1998—2003

per capita (Litres) growth 98-03 national market
Belgium Jupiler 38.29 1.3% 33.9%

France Kronenbourg 12.62 -3.0% 27.2%
Germany Private label 8.72 -5.7% 6.3%
Italy Peroni 3.98 2.8% 12.3%
Netherlands Heineken 16.39 -4.5% 18.0%
Spain Cruzcampo 15.67 11.4% 18.0%
Sweden Pripps 11.74 -3.1% 19.0%
UK Carling 13.10 -2.5% 12.3%
U.S. Budweiser 32.04 0.3% 34.1%
Market growth, in volume terms, in the beer category is highest in Spain, where the
leading brand accounts for 18% of the market and where Sales per capita (spread over
all age groups for consistency of analysis) is over 15 litres per year.
42
TLFeBOOK
Figure 2.5: Beer brand dynamics, 1998—2003

markets Capita
Spain
Beer Market Growth (%) 1998-2003
10.0%
Greater Brand Share
5.0% Belgium
Italy
France
0.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Sweden US
-5.0% UK
Germany Netherlands
-10.0%
Brand analysis in beer markets: FABs
Sales per capita in the FAB market are markedly lower than the beer category. Sales per
capita, across the nine countries analysed, are highest in the UK, followed by Belgium
and Germany. These are also the markets where market growth in FABs, in volume
terms, is highest.
Table 2.22: FABs brand dynamics, 1998—2003

Belgium Bacardi 0.73 613.4% 68.9%

France Panach’ 0.34 -22.3% 32.0%
Germany Karlsberg 0.62 100.8% 17.3%
Italy Campari Soda 0.14 13.8% 32.1%
Netherlands Bacardi 0.23 44.6% 33.5%
Spain Don Simón 0.24 11.0% 63.6%
Sweden Cooler Club 0.03 -87.1% 78.4%
UK Smirnoff 1.42 679.6% 27.7%
U.S. Smirnoff Ice 0.01 31.3% 37.6%
43
TLFeBOOK
Figure 2.6 illustrates the differences in consumption (per capita) of the leading FAB
brand in each country, plotted against its market share and overall market growth in
volume terms. Leading FAB brands dominate in Sweden and Spain, although these
markets are not growing particularly quickly.
Figure 2.6: FABs brand dynamics, 1998—2003
800.0%
Belgium
700.0%
FABs Market Growth (%) 1998-2003
600.0% UK
500.0%

markets Capita
300.0%
200.0% Germany
Greater Brand Share
100.0% Netherlands
Spain
Italy US
0.0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
-100.0% France
Sweden
Brand dynamics in spirits
The following section analyses market growth in the spirits market across nine
countries. It then goes on to identify the largest brands in each country (by market
share) and benchmarks the leading brand it in terms of per capita spending and market
share.
Spirits markets struggle for growth
Over the 1998—2003 period, spirits markets struggled for growth, with the Belgian,
German, Italian, Dutch and Swedish markets all falling in size. In addition, the French
44
TLFeBOOK
market grew by just 0.6% over the six-year period, whilst the UK market grew by only
1.0%.
Table 2.23: Spirits market dynamics, 1998 and 2003

U.S.$ mn Category 1998 2003 % 98-03
Belgium Overall* 603.73 586.47 -2.9%

France Overall* 14,980.33 15,075.68 0.6%
Germany Overall* 6,588.04 5,651.28 -14.2%
Italy Overall* 3,472.00 3,439.63 -0.9%
Netherlands Overall* 1,660.39 1,585.35 -4.5%
Spain Overall* 5,563.64 6,421.29 15.4%
Sweden Overall* 1,084.10 1,071.95 -1.1%
UK Overall* 10,831.99 10,943.76 1.0%
U.S. Overall* 36,961.42 40,028.46 8.3%
* Including brandy and cognac, liqueurs, rum, tequila, whisky, white spirits
At a category level, tequila markets have performed reasonably well over the last six
years, generating growth of 42.6% in Belgium, 38.1% in Germany, over 150% in Spain
and almost 60% in the U.S. Another strong performer was the rum category in Italy,
which grew by almost 90% over the 1998—2003 period.
Private labels take significant share in spirits
Analysis of leading three brands in each of the spirits markets across Europe and the
U.S. shows that private label ‘brands’ take leading positions in Belgium, France,
Germany and the UK. In fragmented U.S. and Italian markets, the leading three spirits
brands account for just 12.8% of the U.S. market and 9.2% of the market in Italy.
45
TLFeBOOK
Table 2.24: Spirits brand dynamics, 2002
Country Brand Brand owner % Volume
Belgium Private label 11.5%

Belgium Peterman Bruggeman NV 10.7%
Belgium Smeets Distillerie Smeets NV 5.6%
France Private label 14.0%
France Ricard Pernod Ricard Groupe 13.6%
France Pastis 51 Pernod Ricard Groupe 4.0%
Germany Private label 11.7%
Germany Wilthener Gräflich von Hardenberg’sche Kornbrennerei 6.9%
Germany Chantré Eckes AG 4.9%
Italy Averna Flli Averna SpA 3.6%
Italy Amaro Montenegro Montenegro SpA 3.1%
Italy Amaro Lucano Cavaliere P Vena & Amaro Lucano SpA 2.5%
Netherlands Bols Rémy Cointreau 12.9%
Netherlands Hooghoudt Hooghoudt Distillery BV 5.0%
Netherlands Ketel Jenever Distillery de Dubbele Adelaar 4.4%
Spain J&B Diageo Plc 10.6%
Spain Dyc Allied Domecq Plc 9.9%
Spain Private label 9.2%
Sweden Explorer V & S Vin & Sprit AB 8.9%
Sweden Renat Brännvin V & S Vin & Sprit AB 8.6%
Sweden Absolut V & S Vin & Sprit AB 8.3%
UK Private label 25.3%
UK Bell’s Diageo Plc 4.3%
UK Smirnoff Diageo Plc 4.3%
U.S. Bacardi Bacardi & Co Ltd 5.3%
U.S. Smirnoff Diageo Plc 4.3%
U.S. Absolut V & S Vin & Sprit AB 3.2%
Brand analysis in spirits markets
In terms of spirits sales per capita (measured over all age groups for consistency
purposes), private label products in France lead the way, followed by private label in the
UK and J&B in Spain.
46
TLFeBOOK
Table 2.25: Spirits brand dynamics, 1998—2003
Belgium Private label 0.32 -5.9% 11.5%

Germany Private label 0.70 -15.0% 11.7%
Italy Averna 0.10 -3.0% 3.6%
Netherlands Bols 0.70 -4.2% 12.9%
Spain J&B 0.87 -0.8% 10.6%
Sweden Explorer 0.26 -7.6% 9.0%
U.S. Bacardi 0.27 5.8% 5.3%
In terms of market dominance of the leading spirits brand, private label takes over one-
quarter of the market in the UK, 14% in France and almost 13% in the Netherlands.
Over the six-year 1998—2003 period, only the U.S., UK and France showed signs of
growth in volume terms.
Figure 2.7: Spirits brand dynamics, 1998—2003
15.0%
Spirits Market Growth (%) 1998-2003
10.0%
US
France UK
5.0%
Spain
0.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
-5.0% Italy
Netherlands
Belgium
-10.0% Sweden

-15.0% markets Capita
Germany
-20.0%
Brand Share of National Market (%) 2002 Greater Brand Share
47
TLFeBOOK
Wine markets are becoming more brand focused
Although growth in the global wine market has been driven by increased consumption of
New World wines, the international market is increasingly consolidated and becoming
brand focused. The emergence of large, multi-national companies into the market has
brought mass-marketing skills to the sector for the first time.
In recent years growth from U.S. and Australian markets has been at the expense of the
French and Italian markets, largely due to marketing and advertising campaigns that are
creating recognisable brands. These include Lindemans, Jacob’s Creek and Wolf Blass.
Examples of large, multi-national players that have brought their marketing ‘muscle’ to
the sector are the Australian brewer Foster’s (which owns Wolf Blass and Beringer),
Allied Domecq (owner of Spanish producer Bodegas y Bebidas and Montana in New
Zealand), Pernod Ricard (the owner of Australian labels Jacob’s Creek and Long
Mountain) and Diageo (owner of Blossom Hill brand and Sterling).
The mass marketing of wines has created a wider customer base. This has set in motion
a chain reaction that will see branding become increasingly important in the sector as
consumers seek recognisable brands that they trust.
Brand dynamics in soft drinks
The following section analyses market growth in the soft drinks market across nine
countries.
Functional drinks boosts growth rates in soft drinks
Over the 1998—2003 period, soft drinks markets recorded strong growth, with the
Belgian, French, Italian, Spanish, UK and U.S. markets all growing by over 20%. In the
Netherlands, the market grew by over 77% in value terms over the six-year period.
48
TLFeBOOK
Table 2.26: Soft drinks market dynamics, 1998 and 2003
U.S.$ mn Category 1998 2003 % 98-03
Belgium Overall* 1,163.60 1,424.11 22.4%

France Overall* 4,208.55 5,364.51 27.5%
Germany Overall* 8,183.03 9,396.21 14.8%
Italy Overall* 3,390.06 4,284.34 26.4%
Netherlands Overall* 1,004.67 1,784.17 77.6%
Spain Overall* 2,921.38 3,868.68 32.4%
Sweden Overall* 1,263.67 1,425.70 12.8%
UK Overall* 8,370.67 10,873.61 29.9%
U.S. Overall* 55,048.50 70,443.73 28.0%
* Including bottled water, carbonates, concentrates, functional, juices, RTD tea and coffee
At a category level, the Dutch market was boosted by exceptional growth in functional
drinks and RTD (ready-to-drink) teas and coffees. The functional drinks category also
grew strongly in Belgium, Germany, the UK and the U.S. Carbonates saw steady to
strong growth in most markets, with growth particularly high in the Netherlands. The
bottled water category showed strong growth, particularly in Spain and the U.S.
Soft drinks brands led by Coca-Cola
Coca-Cola dominates an analysis of the leading three soft drinks brands across eight
countries, taking top spot in six, the exceptions being France and Italy. The brand has its
highest share in Spain (at 13.3%), though its greatest lead over the second-placed brand
is in the Netherlands where it leads by 6.8%.
49
TLFeBOOK
Table 2.27: Soft drinks brand dynamics, 2002
Country Sector Brand Manufacturer % Volume
Belgium Soft drinks Coca-Cola Coca-Cola Soft drinks NV SA 11.2

Belgium Soft drinks Spa Reine Spadel SA NV 5.6
Belgium Soft drinks Pepsi-Cola Sunco NV 4.0
France Soft drinks Cristaline Neptune SA 10.3
France Soft drinks Evian Danone, Groupe 6.0
France Soft drinks Contrex Perrier Vittel France SA 5.5
Germany Soft drinks Coca-Cola Coca-Cola GmbH 5.8
Germany Soft drinks Gerolsteiner Sprudel Gerolsteiner Brunnen GmbH 2.5
Germany Soft drinks Fanta Coca-Cola GmbH 2.1
Italy Soft drinks San Benedetto Acqua Minerale San Benedetto SpA 12.2
Italy Soft drinks Guizza Acqua Minerale San Benedetto SpA 7.5
Italy Soft drinks Vera San Pellegrino SpA 7.4
Netherlands Soft drinks Coca-Cola Coca-Cola Enterprises Nederland BV 11.5
Netherlands Soft drinks Fanta Coca-Cola Enterprises Nederland BV 4.7
Netherlands Soft drinks Spa & Fruit Spadel Nederland BV 3.9
Spain Soft drinks Coca-Cola Cía Servicios de Bebidas Refrescantes 13.3
Spain Soft drinks Font Vella Font Vella SA 9.2
Spain Soft drinks Fanta Cía Servicios de Bebidas Refrescantes 4.6
UK Soft drinks Coca-Cola Coca-Cola Enterprises Ltd 6.3
UK Soft drinks Diet Coke Coca-Cola Enterprises Ltd 5.6
UK Soft drinks Tesco Tesco Plc 5.2
U.S. Soft drinks Coca-Cola Coca-Cola Co, The 12.1
U.S. Soft drinks Pepsi PepsiCo Inc 9.3
U.S. Soft drinks Diet Coke Coca-Cola Co, The 5.4
At a category level (the analysis below is limited to one brand per category due to the
large number of categories), the most dominant brand positions are found in RTD teas,
where Lipton has a 64% share in Belgium, a 62% share in France and 51% in the
Netherlands. In the same category, Nestea holds a 64% share in Spain, whilst Twinings
Iced Tea has a 60% share in the UK.
50
TLFeBOOK
Table 2.28: Soft drinks categories brand dynamics, 2002
Belgium Bottled water Spa Reine Spadel SA NV 12.0

Belgium Carbonates Coca-Cola Coca-Cola Soft drinks NV SA 28.9
Belgium Juices Minute Maid Coca-Cola Soft drinks NV SA 12.8
Belgium Functional drinks Aquarius Coca-Cola Soft drinks NV SA 31.1
Belgium Liquid concentrates Teisseire Teisseire Benelux SA 20.0
Belgium RTD coffee n/a
Belgium RTD tea Lipton Hartog Union-Lipton 64.2
France Bottled water Cristaline Neptune SA 14.4
France Carbonates Coca-Cola Coca-Cola Entreprises SA 34.7
France Juices Joker Joker SA 8.7
France Functional drinks Isostar Nutrition & Santé SA 6.6
France Liquid concentrates Teisseire Teisseire France SA 19.4
France Powder concentrates Isostar Nutrition & Santé SA 28.7
France RTD coffee n/a n/a n/a
France RTD tea Lipton Unilever Bestfoods France SA 62.0
Germany Bottled water Gerolsteiner Sprudel Gerolsteiner Brunnen GmbH 5.6
Germany Carbonates Coca-Cola Coca-Cola GmbH 20.0
Germany Juices Hohes C Eckes-Granini GmbH & Co KG 5.1
Germany Functional drinks Red BullHenkell & Söhnlein Sektkellereien Kg 23.7
Germany Liquid concentrates n/a
GermanyPowder concentrates Krüger Krüger GmbH 18.4
Germany RTD coffee May Eiskaffee May Milch GmbH & Co KG 11.2
Germany RTD tea Pfanner Pfanner Getränke GmbH, Hermann 19.2
Italy Bottled water San Benedetto Acqua Minerale San Benedetto SpA 16.0
Italy Juices Santàl Parmalat SpA 11.8
Italy Functional drinks Gatorade PepsiCo 52.1
Italy Liquid concentrates Fabbri Fabbri 1905 SpA 39.8
Italy Powder concentrates Ristora Prontofoods Srl 43.8
Italy RTD coffee Nescafé Ice Nestlé Italiana SpA 74.5
Italy RTD tea San Benedetto Acqua Minerale San Benedetto SpA 19.3
Netherlands Bottled water Spa Reine Spadel Nederland BV 31.6
Netherlands Carbonates Coca-Cola Coca-Cola Enterprises Nederland BV 19.2
Netherlands JuicesFruit Connection Dubbeldrank Riedel Drankenindustrie BV 17.6
NetherlandsFunctional drinks Red Bull Red Bull Nederland BV 30.6
NetherlandsLiquid concentrates Roosvicee De Ruijter BV, Koninklijke 26.8
NetherlandsPowder concentrates n/a
Netherlands RTD coffee n/a
Netherlands RTD tea Lipton Van den Bergh Nederland BV 50.9
Spain Bottled water Font Vella Font Vella SA 17.4
Spain Carbonates Coca-Cola Cía Servicios de Bebidas Refrescantes 35.0
Spain Juices Juver Hero España SA 14.9
Spain Functional drinks Aquarius Cía Servicios de Bebidas Refrescantes 54.0
Spain Liquid concentrates N/A N/A n/a
Spain Powder concentrates Isostar Novartis Consumer Health SA 81.8
Spain RTD coffee Nescafé Ice Nestlé España SA 76.9
Spain RTD tea Nestea Cía Servicios de Bebidas Refrescantes 63.5
51
TLFeBOOK
Table 2.29: Soft drinks categories brand dynamics, 2002 continued
UK Bottled water Evian Danone Waters (UK & Ireland) Ltd 10.4
UK Carbonates Coca-Cola Coca-Cola Enterprises Ltd 11.
UK Juices Tesco Tesco Plc 11.6
UK Functional drinks Lucozade GlaxoSmithKline Plc 64.2
UK Liquid concentrates Robinsons Britvic Soft drinks Ltd 41.5
UK Powder concentrates n/a
UK RTD coffee n/a
UK RTD tea Twinings Iced Tea Twining & Co Ltd, R 60.3
U.S. Bottled water Aquafina PepsiCo Inc 6.7
U.S. Carbonates Coca-Cola Coca-Cola Co, The 18.3
U.S. Juices Minute Maid Minute Maid Co, The 11.0
U.S. Functional drinks Gatorade Quaker Oats Co, The 55.5
U.S. Liquid concentrates Minute Maid Minute Maid Co, The 24.8
U.S. Powder concentrates Kool-Aid Kraft Foods Inc 37.1
U.S. RTD coffee Frappuccino North American Coffee Partnership 78.5
U.S. RTD tea Lipton Pepsi-Lipton Tea Partnership 36.1
Brand analysis in soft drinks markets: carbonates
In the carbonates category, Coca-Cola dominates an analysis of the leading brands.

Sales per capita is highest in the U.S., followed by Spain and Belgium (market data on
Italian and Swedish markets was not available in this category).
Table 2.30: Carbonates brand dynamics, 1998—2003

Belgium Coca-Cola 22.67 7.9% 28.9%

France Coca-Cola 8.80 10.8% 34.7%
Germany Coca-Cola 10.54 20.7% 20.0%
Netherlands Coca-Cola 13.28 22.0% 19.2%
Spain Coca-Cola 24.64 16.6% 35.0%
UK Coca-Cola 8.30 13.4% 11.0%
U.S. Coca-Cola 28.74 6.8% 18.3%
52
TLFeBOOK
The Coca-Cola brand holds its highest share of the carbonates category in Spain, where
it has a 35% share, though it also holds 34.7% of the French market. The Dutch and
German carbonate categories are the fastest growing.
Figure 2.8: Carbonates brand dynamics, 1998—2003

markets
Carbonates Market Growth (%) 1998-2003
Capita
Netherlands
Greater Brand Share
20.0%
Germany
Spain
UK
10.0%
France
US Belgium
0.0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Brand analysis in soft drinks markets: bottled water
In terms of consumption of the leading bottled water brand, Italy, France and Spain lead
the way, where on average, each person in those countries drinks around 20 litres per
year. Spa Reine takes the leading position in both the Belgian and the Dutch markets.
Table 2.31: Bottled water brand dynamics, 1998—2003

Belgium Spa Reine 11.64 22.1% 12.0%

France Cristaline 20.12 31.0% 14.4%
Germany Gerolsteiner Sprudel 4.84 20.7% 5.6%
Italy San Benedetto 20.23 17.8% 16.0%
Netherlands Spa Reine 3.97 20.0% 31.6%
Spain Font Vella 18.58 64.4% 17.4%
UK Evian 2.37 61.9% 10.4%
U.S. Aquafina 1.96 97.4% 6.7%
53
TLFeBOOK
While data on the Swedish market is not available, it can be seen that the most dominant
leading bottled water brand can be found in the Netherlands, where Spa Reine holds a
31.6% share of the market, whilst the fastest growing market is the U.S.
Figure 2.9: Bottled water brand dynamics, 1998—2003

110.00%
Bottled Water Market Growth (%) 1998-2003
US markets Capita
100.00%
90.00%
Greater Brand Share
80.00%
Spain
70.00% UK
60.00%
50.00%
France
40.00%
30.00% Germany Netherlands
20.00%
10.00% Belgium
Italy
0.00%
0.0% 10.0% 20.0% 30.0% 40.0%
Brand analysis in soft drinks markets: juices
In juice markets Minute Maid is the leading brand in both Belgium and the U.S. In terms
of sales per capita of the leading juice brand, the Netherlands is the largest market,
followed by the U.S.
Table 2.32: Juice brand dynamics, 1998—2003

Belgium Minute Maid 2.58 17.5% 12.8%

France Joker 1.81 9.4% 8.7%
Germany Hohes C 1.86 3.3% 5.1%
Italy Santàl 1.31 43.0% 11.8%
Netherlands Fruit Connection Dubbeldrank 4.51 37.6% 17.6%
Spain Juver 2.38 59.4% 14.9%
UK Tesco 2.61 21.7% 11.6%
U.S. Minute Maid 3.86 5.9% 11.0%
54
TLFeBOOK
In addition to having the highest per capita consumption, the leading juice brand in the
Netherlands also holds the largest market share of all the leading brands, with a 17.6%
share in 2002. The juice markets in Spain and Italy are the two fastest growing markets.
Figure 2.10: Juice brand dynamics, 1998—2003

markets Capita
70.0% Spain
Juices Market Growth (%) 1998-2003
60.0%
Greater Brand Share
50.0% Italy
40.0%
30.0%
UK
Netherlands
20.0% France
Belgium
10.0%
Germany
0.0%
0.0% 5.0% 10.0% US 15.0% 20.0%
-10.0%
-20.0%
55
TLFeBOOK
56
TLFeBOOK
Chapter 3
Key Issues in Branding Food

and Drinks
57
TLFeBOOK
Chapter 3 Key Issues in Branding Food
and Drinks
Summary
In an attempt to portray themselves as ‘nutritionally friendly’, leading

manufacturers are launching a number of initiatives to raise the profile of healthy
eating. The development of brands that offer genuine longer-term health benefits
provides a key opportunity for engendering consumer loyalty.
Confectionery manufacturers, in particular, are looking to change ingredients to

present a healthier image for their leading brands.
A successful strategy directly targeting nostalgia will offer older consumers the
chance to indulge in their childhood memories or may appeal to consumers’ sense
that some goods from yesteryear were of better quality or taste.
The importance of ‘cool brands’ varies by product category and it is perhaps most
apparent within the food and drinks industry in the alcoholic drinks segment.
Delivering the promise of a brand has become just as, if not more important than
raising initial brand awareness and is designed to boost sales and loyalty.
It is not necessarily the contents of products, or their packaging that must be

standard, or indeed the communications strategy, but it is the ultimate message
and aspirational attributes of a brand that should be consistent on a global basis.
In private label, retailers are now changing their focus from the branded
manufacturers, to their customers and their competitors. It is consumer categories
rather than product categories that are now driving private label markets.
While the major brands (the number one or two in their respective categories), are
essential for retailers to generate store traffic, such brands are not in themselves a
point of difference from other retailers.
Brand extensions must fit and be consistent with the core brand message, as
perceived by consumers and must be both relevant and credible.
Corporate brands are unlikely to evoke emotional attachments to a product or

provide consumers with a lifestyle statement. This has prompted manufacturers to
experiment with service concepts.
58
TLFeBOOK
Introduction
This chapter analyses the key issues facing marketing and brand managers in today’s
food and drinks industry. It is segmented to highlight four key areas of importance and
begins by looking at changing consumer trends and how these impact upon brand
management. The chapter goes on to assess the impact of a burgeoning global
marketplace on today’s brands and asks whether food and drinks brands can truly be
‘global’.
The third key issue facing leading food and drinks brands is the development of private
label products. Once seen as merely the ‘economy’ or ‘value’ line in a supermarket aisle,
they now demonstrate sophisticated levels of brand management and marketing strategy.
The chapter concludes with analysis of manufacturer behaviour towards brands and how
corporate merger and acquisition strategies are influencing brand development.
Increasingly companies pursue brand extension strategies when launching new products
rather than introducing a new brand. This is a less risky approach than launching an
entirely new brand and can be less costly from a financial perspective. That said; this
approach carries the danger of diluting the original brand’s message.
Consumer trends in global food markets
Consumer lifestyles have changed significantly over the last 20 years, resulting in both
modifications in the type of food and drinks products that consumers now purchase and
change in the way that food manufacturers meet these needs.
Consumer lifestyle drivers
Increasingly, the leading food and drinks manufacturers are aligning their product
portfolios with the needs of the modern consumer, which continue to meet the demands
set by three major consumer trends - convenience, health and pleasure.
59
TLFeBOOK
To better suit the needs of consumers, manufacturers undertake analysis of the three
consumer megatrends to develop product variations and their brand strategies that
engender consumer loyalty, differentiate consumers towards high margin opportunities
and help them gain greater market share in their core markets. With both premium and
convenient products grabbing the attention of manufacturers in recent years, the latest
developments have seen manufacturers promote the health, functional and nutritional
benefits of their portfolios and new product developments.
Recent decades have seen the development of a convenience-oriented society, driven by

changes in family structure, more working mothers, longer working hours, and increased
labour mobility. Though it has been a well-documented trend for many years now, there
is little evidence that convenience will become less important for consumers in the near
future. Additionally, despite the prevalence of high pressure lifestyles and the increasing
popularity of healthy foods, the demand for exciting and enjoyable food has not
decreased, with continuing and more widespread appeal of novel and fun, indulgent and
premium, and ethnic and exotic meal solutions.
Increasing prevalence of medical conditions such as obesity and an ageing population in

many markets is fuelling consumer demand for healthier food products. As consumers
have become increasingly aware of the ingredient content and origin of the foods they
eat, so manufacturers have also become aware of a possible threat of litigation as
consumers seek to hold food manufacturers responsible for a failure to disclose product
ingredients (which may result in future health problems), in much the same way that
tobacco companies have been subject to legal action. In attempt to portray themselves
as ‘nutritionally friendly’ the leading manufacturers are launching a number of initiatives
to raise the profile of healthy eating.
Kraft initiatives respond to health concerns
In July 2003, Kraft announced a series of commitments that are to focus in four key
areas: product nutrition, marketing practices, consumer information and public advocacy
and dialogue. As a part of the process, Kraft formed a global council of advisors to help
60
TLFeBOOK
it structure its ongoing response to obesity and develop policies, standards, measures
and timetables for implementation.
In the area of product nutrition, Kraft is committed to placing a cap on the portion size
of single-serve packages, introducing guidelines for the nutritional characteristics of all
products and making improvements to existing products and providing alternative
choices.
Where marketing is concerned, the company is seeking to eliminate all in-school

marketing. It also intends to apply locally appropriate criteria to the vending industry in
different regions of the world to determine the selection of Kraft products to be sold
through in-school vending machines. Additionally, it is to introduce guidelines for all
advertising and marketing practices, including advertising and marketing to children, to
encourage appropriate consumption behaviours and active lifestyles.
Improving information to the consumer is also a commitment from Kraft, including the
provision of nutrition labelling in all markets worldwide (including markets where
labelling is not required), adding nutrition and/or activity-related information on product
labels and company websites, as well as the introduction of guidelines for the use of
health-related claims in all markets, including markets where no restrictions exist.
Additionally, a number of high profile food scares have resulted in a greater popularity
of ‘natural’ and organic products in many Western markets. Confectionery
manufacturers, in particular, are looking to modify or change ingredients to present a
healthier image for their leading brands. Cadbury Schweppes has chosen links with
education departments in the United States to promote the healthiness of one of its
drinks brands. In September 2003, it was announced that all New York City schools
would exclusively sell Cadbury Schweppes' range of Snapple fruit juices and water in
vending machines. This followed a decision by New York City to make healthier choices
available to its students and to find innovative ways to market the City and fund some of
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the improvements it needs. Cadbury Schweppes won the contract in competition with
Coca-Cola and PepsiCo.
Using nostalgia as a brand strategy
Spreading from the wider FMCG industry into food and drinks markets, the use of
nostalgia as a marketing strategy has been implemented by manufacturers such as Coca-
Cola and Hovis, a bread manufacturer in the UK, to boost sales of its brands. Consumer
goods manufacturers are realising that they can capitalise on a world of increasing
uncertainty and danger, by eliciting an emotional response to a product from a
consumer, evoking feelings of stability, trust and loyalty to a brand that the consumer
either enjoyed in a previous period or has come to believe in over a considerable period
of time.
One of the major catalysts for the trend towards nostalgia was the millennium. In the
lead up to 2000 there was a raft of nostalgic feeling, termed “nostalgia chic” which has
been maintained over the last four years. A trend that is related to things either from
one’s youth, or to things that occurred further back than in the recent past, nostalgia can
apply to most consumers. This means that a brand strategy using the ‘nostalgia factor’
can be aimed at a wide audience.
A simple method in which nostalgia can be associated with brands is through innovative
packaging design that provides a link with the past. Coca-Cola provided a prime
example of this when it recreated a plastic version of its contour bottle in 1994.
However, targeting nostalgia directly in advertising and marketing should only be done
when original brand values are still just as relevant today as they were in the past. If a
brand was largely unsuccessful the first time around, it is unlikely to be a success in the
21st century unless there is something new or compelling about its proposition.
A successful strategy directly targeting nostalgia will offer older consumers the chance
to indulge in their childhood memories or may appeal to consumers’ sense that some
goods from yesteryear were of better quality or taste. However, a brand can also
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indirectly target nostalgia by bringing old values up to date and reinterpreting those
values in a modern context. By combining new marketing, packaging and updating the
brand portfolio, a manufacturer can be successful in increasing the value of its brand.
Coolness in food and drink brands
In a similar way to how the ‘nostalgia factor’ can elicit an emotional response from
consumers, bringing an element of ‘cool’ to a brand also conveys non-physical
attributes. Coolness is not inherent within products themselves, but exists via people’s
attitude and perception towards it. Because attitudes and perceptions are so personal,
the attributes and marketing activities that consumers associate with coolness will vary
by age and product category. Whatever the product, an element of ‘cool’ allows a
consumer to conspicuously present a certain lifestyle to other people who share similar
values and, therefore, overall acceptance of that product.
Whilst the concept of cool can be marketed and engineered, to consciously market cool
is actually uncool. Whilst it is important not to force any cool positioning on consumers,
successful brands such as Häagen Dazs and Coca-Cola show that deliberate marketing
tactics can enhance consumers’ perceptions of brand image. Although consumers are
becoming more media savvy and cynical about marketing tactics, they are firm believers
in the power of marketers when it comes to influencing perceptions of cool.
Again, in a similar way to nostalgia, the concept of cool also transcends age groups,
though focused brand segmentation can help target different groups. Whilst a common
misconception of coolness is that it only concerns making products appealing to youths,
a more rational perspective is realising that although consumer priorities change with
ageing, the desire to be seen consuming the right products and fit in with your peer
group remains.
The importance of cool varies by product category and it is perhaps most apparent
within the food and drinks industry in the alcoholic drinks segment. Ultimately, it is not
a necessity that food and drinks products need to be cool in the first place and such
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products must primarily be benefit driven. To avoid exposure to short-term crazes or
fads, manufacturers should strive to achieve long-term coolness, which is best consumed
as an add-on emotional benefit rather than an integral factor for which to base a
marketing strategy upon.
Those products with the highest cachet amongst consumers’ stand to be the most
profitable because consumers are willing to pay extra for cool, as well as increasingly
using their perception of cool to choose between brands. Though it must be done subtly,
cool also provides a way of standing out from rivals and the emanating threat of private
label.
To engender ‘coolness’ in a brand, a manufacturer can use its packaging to create a cool
image, often using a retro look, though the message must be message must be
understated and subtle. The use of celebrity endorsements to establish mainstream cool
and to spread product credibility is also often employed, as is the production of branded
memorabilia that consumers can interact with and associations with leading figures in
the world of sport, fashion, art and music.
Can local brands go global?
The modern consumer connects with brands many hundreds, if not thousands, of times
each day through a wide range and variety of experiences, with word-of-mouth eclipsing
advertising as the most important of these. An increasingly service-based economy also
means that many brand experiences no longer stop with the purchase of a product, as
manufacturers look to leverage their brand equity with the provision of an after-sales
service. Delivering the promise of a brand has become just as, if not more important
than raising initial brand awareness and is designed to boost sales and customer loyalty
while at the same time enabling valuable customer data to be gathered that can shape
future product development and marketing activity.
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deliver a strong and trusted perception of a product that increases its customer base and
ensures the loyalty of existing customers. It may also allow a company to maintain a
price premium within a category. Successful brands build emotional bonds with
customers that last long beyond the direct experience of brand, but can a single brand
achieve this on a global basis?
Traditionally, companies have approached global marketing with national or

international divisions whereby the same product is often promoted under different
names (and may be produced to suit specific local tastes or requirements) but still refer
to the product as a global brand. Masterfoods/Mars Inc is a typical example of a
company where its products are sold across continents under different brand names. The
company’s Milky Way, Mars and the 3 Musketeers brands contrast with European
markets. For example, a Milky Way bar in the U.S. is known as a Mars bar in the UK,
whilst a Milky Way bar in the UK is branded as 3 Musketeers in the U.S. A product
under the Mars bar in the U.S. name is similar to its UK counterpart, but contains
almonds (which is marketed as Mars Almondites in Australia). In the UK, the
company’s Marathon bar was re-named Snickers to bring it in line with the product in
other countries, although in 2003 in the U.S. the company reverted to using the
Marathon name to launch a new energy bar product.
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Figure 3.11: Selected confectionery products from Mars
Source: Author research Business Insights
Will the Internet redefine global branding?
For many manufacturers global distribution alone once qualified as global branding, but
now the same product needs to have global recognition. The proliferation of mass
communication media has been seen as a driver of this. Initially, television was heralded
in the quest for standardisation where a global audience could be targeted with a single
consistent message.
In the 21st century, the Internet has taken over as the key media that will attempt to
redefine global branding as an increasing consumer base worldwide has access to the
same brands via the worldwide web. The Internet is slowly changing the way in which
consumers search for products and make purchasing decisions. Although they may only
spend a small proportion of their income online, consumers are increasingly using the
Internet to familiarise themselves with competing products before they buy.
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With this in mind, it is increasingly important that a brand needs to have consistent
imagery and a global culture to prevent a dilution of its image to consumers. Ultimately,
this will require manufacturers to discard the use of different product names in different
countries. Whilst no company wants to throw away the brand equity it has already
established in several markets, renaming the product line with one recognisable name
worldwide, as Coca-Cola has done, could result in a larger share of market worldwide.
As it seems to be a question of when, rather than if, the Internet will make a significant
impact upon the way consumers interact with brands, what should manufacturers be
doing to position themselves and their brands? Certainly the use of brand websites,
CRM facilities and product personalisation sites will help build more personal
relationships with consumers. There are also a number of important factors to consider
for multi-national manufacturers wishing to launch new brands or consolidate their many
existing brands (or subsidiary names) under a single banner. These include the ability of
the name to convey the brand’s attributes, to have a name that translates well into other
languages (and is easy to pronounce in other languages), to own the name outright to be
able to protect the new name (i.e. an Internet domain, legal costs and searched and
trademarks). Considering all of those factors, it is also important to recognise the
attributes that help define any existing brands in the search for a consistent message.
When global is not always best
Against the trend towards standardisation, burgeoning mass communication media also
means that consumers are becoming more aware of diverse cultures and demanding a
wider variety of ethnic or multi-cultural products, attributes of product or brand that
may be overlooked in a push for a consistent global brand.
In addition, in order to not alienate important domestic markets, a manufacturers’ brand

and communication strategy will often need to be localised to reflect the aspirations and
values of that local market and it is perhaps this lesson that the manufacturers should
take from any discussion of global branding. To be successful, the brand experience
must be tailored to meet the needs of the target consumer groups.
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It is not necessarily the contents of products, or their packaging that must be standard,
or indeed the communications strategy, but it is the ultimate message and aspirational
attributes of a brand that should be consistent on a global basis, i.e. whilst the packaging
and name of a flavoured alcoholic beverage may be subtly different to suit local markets,
the message the product conveys and what it means to a consumer to purchase that
product should be the same everywhere.
Included within a list of the world’s most successful global brands are Coca-Cola and
McDonalds. These brands are considered to be among the most global not simply
because they have global distributor operations, or because they use a uniform brand
name and symbol, but because they also ensure that their brand connotes a uniform
aspirational value. This does not prevent the products or services associated with the
brand being customised to suit local markets, as Coca-Cola does when it adjusts the
levels of sweetness to match local tastes, or when McDonalds offers a slightly different
menu from one country to another.
Licence agreements seek local expertise for wider distribution
It is not unusual for a manufacturer to use a licence agreement to enable a brand to sell
into a wider market than it otherwise would. This provides a brand with greater global
exposure and has an added benefit of using an ‘out-sourced’ manufacturer’s knowledge
and expertise to market a brand in the most appropriate way to suit local market
requirements.
In the confectionery category, for example, Hershey has license agreements with
affiliated companies of Cadbury Schweppes to manufacture and/or market and distribute
York, Peter Paul Almond Joy and Peter Paul Mounds confectionery products worldwide
as well as Cadbury and Caramello confectionery products in the U.S., subject to a
minimum sales requirement. Hershey also has an agreement with Nestlé, which licenses
Hershey to manufacture and distribute Kit Kat and Rolo confectionery products in the
U.S., again subject to certain conditions, including minimum unit volume sales.
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The private label threat
Across many Western European markets, private labels have become the ‘new’ national
brands as they display many of the characteristics associated with established brands.
From a technical, marketing and customer perspective, private label products now
appear every bit as advanced as the leading national brands. Driven by increasing retailer
consolidation, private label is being used as a key-differentiating agent between retailers.
In private label, retailers are changing their focus from the branded manufacturers, to
their customers and their competitors and in doing so, it is consumer categories rather
than product categories that are now driving private label markets. As a result, many
secondary, smaller national brands are disappearing from store shelves as manufacturers
choose instead to supply private label products.
Private labels are the new national brands
The economic slow-down of the early 1990s saw resurgence in the popularity of private
label products that had been largely rejected during the 1980s. The growth in popularity
was helped by vastly improved quality standards that accompanied the products, which
in turn encouraged retailers to develop private label products that enhanced the branding
of their stores. In the mid-1990s, consolidation became a key strategy for retailers to
achieve national (and more latterly international) coverage of locations and scale
economies that could drive store traffic and sales. As competition between retailers
intensified, so private label became a key-differentiating agent between retailers. This
represents a fundamental shift in the function of private label products, from consumer-
led, economy-driven products to a brand of national importance driven by retailer need.
As retailers place increased importance on store branding with their customers, so they
have used private labels to build store loyalty, creating key points of differentiation
between themselves and other retail chains. Success has been particularly noticeable in
categories where national brands tend not to dominate, such as ready meals and chilled
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products. This is especially the case where premium private label products have been
introduced.
With profit margins up to 25% higher on private label products than on national brands,
large retailers easily cover the costs associated with launching new private label
products. They can afford to invest heavily in them so that from a technical, marketing
and customer perspective, private label products appear every bit as advanced as the
leading national brands. The proliferation of private label brands and the frequent use of
promotional offers have also resulted in erosion of loyalty to national brands, to the
benefit of private labels.
While retailers are investing heavily in ‘share steal’ tactics to promote their new
‘brands’, they have attempted to maintain their margins on these products by forcing
down prices with their suppliers. Retailers dominate private label manufacturers in
almost all aspects of their business relationship and are now demonstrating increasing
levels of power over the major national brand manufacturers.
Private labels extend their reach
Private label products are rapidly extending their reach into nearly every food category,
and as they do so, quality standards are continually raised. In the private label ‘ready
meals’ market, growth has been driven by the competitive drive of retailers, and further
encouraged by increasing consumer demand for food that is convenient, interesting and
trustworthy. In markets such as these that have no dominant national brands, this
enables retailers to position the products with a premium price, particularly for the
increasingly up-market, restaurant-quality dishes.
However, after enjoying long periods of sustained growth, the private label industry has
struggled to maintain its impressive track record over the last couple of years. This was
not as a result of poor consumer perception of private label products but partly
attributable to superior marketing by branded manufacturers and the high-low pricing
strategies of a number of retailers. These factors contributed to the lack of private label
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growth as consumers were tempted towards branded products priced below that of
private labels, albeit on a ‘temporary’ basis.
National brands are not unique but retain ‘must-have’ quality
Unlike manufacturers, retailers have direct access to the consumer through their stores,
with control over the ‘shop floor’. This enables them to closely track consumer trends
and spending patterns and encourages the development of ‘me-too’ products, which
negatively impacts sales and profit margins of national brand manufacturers.
While the major brands (the number one or two in their respective categories), ranging
from Kellogg’s in breakfast cereals to Coca-Cola in carbonates, are essential for retailers
to generate store traffic, such brands are not in themselves a point of difference from
other retailers. Mainstream retailers cannot afford to not stock Kellogg’s for fear of
alienating their customers. To illustrate this, Sainsbury’s in the UK reduced the average
share of sales that is accounted for by private label after it found that it had gone too far
in certain categories, as store traffic had suffered by restricting consumer choice too
much.
Therefore, the main brands are ‘must haves’ to ensure that no customer traffic is
unnecessarily lost to retail competitors. The leading national brands are also, more often
than not, the innovators that keep the category moving forward.
Manufacturer brand strategies
The consumer megatrends that have been highlighted in this report represent an
important opportunity for food and drinks manufacturers to create closely targeted,
higher margin products that fulfil the needs of modern consumers.
Categorising the food market by product type or category may not reveal many new
sales opportunities for manufacturers. However, categorising the market by consumer
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trends enables the manufacturer to create new strategies for increasing its market share
without cannibalising the market for existing products. The development of brands that,
in particular, offer genuine longer-term health benefits provides a key opportunity for
engendering consumer loyalty.
However, new brands are difficult to introduce and manufacturers often find it is easier
(and cheaper) to buy a brand rather than invent one, or to carefully extend a current
brand into new segments. In recent years a number of the large food manufacturers have
been disposing of non-core assets in their portfolios, whilst others have made significant
acquisitions.
Disposals and acquisitions
In recent years, Unilever Bestfoods has disposed of a number of brands, including its dry
soup and sauces businesses in Europe, the Bestfoods Baking Company and also its
seafood businesses. Similarly, Heinz has disposed of certain businesses in recent years in
order to concentrate more fully on realising the full potential of its core brands.
However, on the other hand Cadbury’s has made several acquisitions (the most notable
of which was the Adams confectionery business, whilst General Mills acquired Pillsbury
and Kellogg acquired Keebler Foods (both in 2001). Nestlé has also made significant
acquisitions to fill gaps in its portfolio.
Confectionery sets the trends for brand extensions
Instead of acquiring a brand, manufacturers may instead choose to extend a current

brand. This can help build awareness more quickly by leveraging the success enjoyed by
the existing brand and enables the manufacturer to benefit from scale economies,
particularly in the marketing and promotion of the new brand.
Brand extensions must fit and be consistent with the core brand message, as perceived
by consumers. The extension must be both relevant and credible – does it make sense to
the consumer and are the attributes of the brand transferable to the extension? For
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example, a manufacturer may extend its expertise in pasta or rice products into sauces,
but to leverage the brand name in confectionery would not appear logical.
Brand extensions can be used to increase the number of consumption occasions that a
brand can target, although a manufacturer must be careful not to cannibalise sales of its
original product. In confectionery markets, Mars successfully set the trends for brand
extensions by launching its products in the ice cream segment, also a high volume
‘impulse’ segment, but arguably differentiating itself from traditional chocolate
confectionery in terms of seasonality (in line with the theory that sales of chocolate
confectionery can be lower during periods of hot weather). More recently, the company
has attempted to replicate the success it enjoyed as it ventures into cake bars and
biscuits. For example, it has entered into a joint venture with McVities to produce Milky
Way cake bars. In a segment perhaps more closely aligned to traditional confectionery
markets, it will be interesting to monitor the degree of success the company achieves
with this strategy. Further extensions have also seen the company enter the soft drinks
market with a number of products aligned to their leading chocolate brands.
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Figure 3.12: Mars: from confectionery to soft drinks
Source: Mars Drinks Company Information Business Insights
Whilst Nestlé has also launched confectionery products into the biscuits segment, the
company led the introduction of brand extension into the chilled desserts segment,
utilising its strength in dairy markets to introduce Milkybar, Rolo and Smarties desserts.
In 2003, Nestlé also extended some of its confectionery brands into biscuits, a faster
growing segment than traditional confectionery markets, which are also perceived to be
less unhealthy than chocolate confectionery.
Nestlé has also extended brands within the confectionery market along age and gender
lines. After the company saw that Kit Kat Chunky cannibalised Kit Kat sales, the
Milkybar brand was extended to widen the consumer base by differentiating between
consumers. Milkybar Munchies were labelled ‘For Adults’ while Milkybar Choos were
targeted at children.
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Also in confectionery, Hershey is looking to leverage its core competencies in the
broader snack market. It believes that targeted adjacent segments offer incremental
growth opportunities as consumers are likely to select well-known brands in a broader
array of snacks, though as highlighted above, the strategy of extensions of confectionery
into cakes, biscuits and even chilled desserts has already been undertaken.
Approach cross-selling with caution
Co-branding has become an increasingly common tool for squeezing additional value
from a brand and can take many forms, including the use of endorsements, the mixing of
product ingredients, a product-service tie up or innovation-based co-branding, where
manufacturers work together to jointly develop a new product.
Examples range from manufacturers branding their products in foodservice channels,

such as the sale of Cadbury’s and Nestlé’s ice creams at McDonalds, the co-branding of
the ingredients of complementary products (i.e. Kellogg’s co-branding of Müller Corner
split-pot yoghurts) and the use of the Nescafé brand in service channels through coffee
outlets.
However, aside from financial measurements, the benefits and risks of co-branding are
not always easy to quantify. Whilst manufacturers must be careful not to dilute a brand’s
message, benefits can include increases in a brand’s value when one brand is associated
with another. Cross selling is unlikely to provide long-term growth. Instead, new
product development and/or the extension of brands into developing markets in Eastern
Europe, Latin America and the Asia-Pacific regions should be higher priority strategies.
Leveraging the power of the corporate brand
To some extent, the theories behind the cross-selling approach may also be applied at a
corporate level, by raising the profile of the manufacturer’s ‘brand’ across its portfolio
of products. In recent years, Nestlé has enlarged the Nestlé logo on many of its sub-
brands and in February 2004, Unilever announced plans to make greater use of its
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corporate brand in support of its companies and products around the world. By 2005,
subsidiary companies will adopt the name and use it on corporate literature and signage.
Eventually, the Unilever name will appear on all product packaging.
However, whilst the corporate brands carry strong associations with quality, they are
unlikely to evoke emotional attachments to a product or provide the consumer with a
lifestyle statement. This has also prompted the major manufacturers to experiment with
service concepts such as Nestlé’s Nescafé and Cadbury’s coffee shops.
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Chapter 4
Best-Practice Case Studies
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Chapter 4 Best-Practice Case Studies
Summary
A design solution can be required to force consumer reappraisal of the brand, to

attract new consumers and to reinforce equity of the brand with existing
consumers.
Carlsberg Green label suffered from too much ‘local’ and not enough ‘global’. The
brand positioning was very broad and allowed for much interpretation.
It became apparent that Carlsberg was a very warm, friendly and inclusive brand
compared to its major competitor Heineken.
Many of us have grown up with Trebor. But as lifestyles change, it can take a new
brand to establish a connection with a new generation of consumers.
The twenty-somethings have a massive choice in every aspect of their lives.

Getting them to commit to a brand means fitting into their lifestyle, offering
something to be seen with - a badge of style.
Establishing an emotional, as well as functional value for the brand calls for a
detailed understanding of motivators and preferences.
The brand icon itself has to offer elasticity for new range introductions and
product evolutions.
Introduction
This chapter analyses the strategies and market positioning of a selection of leading
brands in the form of detailed case studies. The case studies have been taken from a
selection of product categories in the food and drink industry to include confectionery,
alcoholic drinks and ready meals. They illustrate the thought patterns, trends and
developments that go towards the branding of household food and drinks products.
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The case studies are provided by Dragon, an independent, international brand agency
which offers brand positioning, research analysis, new product development, naming,
brand identity, literature design, internal communications, website design and
sustainability issue. The company also invest in new research, ideas and perspectives.
The case studies below are outlines of several consultancy projects that Dragon has
undertaken for leading food and drinks brands. They highlight the issues that led the
brand-owners to seek the help of an agency in the first place, Dragon’s approach to such
projects and the contribution they made to re-vitalising the brands.
Carlsberg
Background
Carlsberg Breweries is the fourth largest brewery in the world, with the “jewel in its
crown” – Carlsberg Green label – available in over 140 markets.
Brand issues
Carlsberg Green label was suffering from too much ‘local’ and not enough ‘global’. The
existing brand positioning was very broad and allowed for much interpretation. Dragon
was asked to more tightly define a brand positioning that could inspire the brand to even
greater success, and offer a clearer point of differentiation for the other European, green
premium lagers such as Heineken.
Approach
Dragon employed an extensive interview programme, visiting markets from Bucharest

to Hong Kong, and speaking to over 70 internal marketers and ‘opinion formers’.
Positioning hypotheses were presented, developed and then honed via consumer
research in eight lead markets.
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Brand story
Through research, it became apparent that Carlsberg was a very warm, friendly and
inclusive brand – far more so than its rival Heineken. Thus, the brand essence: ‘drink
with a world of friends’ incorporates the brand’s global stature with welcoming
personality.
Figure 4.13: Carlsberg
Source: http://www.dragonbrands.com Business Insights
Contribution
Dragon defined the positioning of the brand and created a positioning model ‘The Brand
Opener’ through which it is summarised. Dragon consultants presented the new strategy
to the company through a series of interactive workshops in Bucharest, Kuala Lumpur
and Oporto. Finally, Dragon’s consultants and literature designers developed a
prestigious brand manual for all internal marketers to refer to. As a continuation of the
project, Dragon was asked to translate the strategy into visual expression of the brand.
The packaging design team created many elements of the primary and secondary
packaging for the brand now available around the world.
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Trebor 24-7
Background
24-7 is a range of mints and gums created to re-energise the market with daring
packaging and funky design. Manufactured by Cadbury Trebor Bassett, the brand was
looking for:
A new connection with the young adult market;
a strong profile at point-of-sale in on-the-go outlets;
an award-winning and innovative pack design.
Brand issues
Many of us have grown up with Trebor. But as lifestyles change, it can take a new brand
to establish a connection with a new generation of consumers - one with a vibrancy and
edge that reflects the pace of their lives. Enter 24-7.
When Cadbury Trebor Bassett asked Dragon to develop the positioning for 24-7, the
agency decided to take a very ‘trendy’, ‘clubby’ route to target young adults and
teenagers, connecting with their lifestyles and fulfilling both an emotional and functional
need. To attract the target consumer, 24-7 needed to be ultra convenient, a great talking
point and ultimately have the aim to become a badge brand.
Establishing an emotional, as well as functional value for the brand
The twenty-somethings have immense choice in every aspect of their lives. Getting them
to commit to a brand means fitting into their lifestyle, offering something to be seen
with, a badge of style. Not only did the new brand of mints and gums have to compete
on taste and refreshment, but also establish its fashion credentials with the heavily
targeted 16-24 year-old audiences.
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Establishing an emotional, as well as functional value for the brand called for a detailed
understanding of motivators and preferences. All elements of the pack communication –
logo style, flavour names, colour coding and support copy had to be in tune with the
active, sociable, hectic lifestyles of the target consumer.
Pack with pace
In am aim to gain impact in a marketplace dominated by brands such as Wrigley’s, 24-7

needed a unique pack presentation to stand out from the crowd. In a joint initiative
between Seymour Powell and Dragon, concepts were developed for a strongly branded
pod dispenser, which would communicate convenience and be stylish enough to become
the 'brand to be seen with'. Made from polyurethane with a moulded push-button with
which to 'click' and dispense the mints or gums, the pods were produced in a range of
funky colours fitting the promise of the flavour range. Graphics with clear bold
typography and a starburst effect were used to create a brand icon with Trebor’s
mother-brand endorsement emphasised in its red logo form.
Dragon created enticing branding names and flavours to attract the youth market. The
advertising campaign was developed by Euro RSCG. The brand icon itself had to offer
elasticity for new range introductions and product evolutions. Using the unique egg-
shaped dispenser, the starburst identity was created to show the explosion of taste. It
uses a simple, controlled colour palette, allowing the colour coding of the egg pack to
stand out to indicate flavour. Flavour names and supporting pack copy were all
developed to reflect the idea of ‘empowering refreshment’.
Merchandising trays were subsequently designed by Dragon to display the 24-7 egg
pods effectively, together with gravure printed overwraps using bold metallic foils in
order to reinforce shelf stand-out for cash ‘n’ carry and wholesale.
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Figure 4.14: Trebor 24-7
Contribution
24-7 was launched in the UK in March 2003, following a successful launch in Australia
in 2002. The 24-7 pack is already making a name for itself. Dragon, together with
Cadbury and structural pack designers Seymour Powell won a 2003 Institute of
Packaging Gold Star-Pack award.
Amoy
Background
AMOY, one of the leading Chinese food brands, appointed Dragon Brands in April
2003 for a review of its packaging. The project involved the packaging design of Amoy
‘Straight to wok’ noodles and sauces range.
Brand issues
Britain’s taste for cuisines from across the world has come a long way since the 1960s
when, for many households, Vesta was the epitome of accessible exotic. Sophistication
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and expectation levels have increased enormously, as have the number of brands
promising to deliver the ultimate in home-cooked experience. So how can brands keep
in touch with the consumers evolving needs and make their presence felt in the crowded
world of the supermarket shelf?
Amoy has long had a powerful reputation for authenticity and a strong story to tell
about its understanding of food as a real sensory experience.
Brand idea
The enthusiasm of the UK consumer for Asian cooking continues to rise. It is not simply
about spicing up the weekly menu. British cooks have embraced Oriental cuisine with its
centuries of tradition because it offers almost the ultimate solution for today’s pressured
Western lifestyle. It’s tasty, healthy and, with a little help on the ingredient front, quick
and convenient, too.
The range includes three types of noodles: Fine/Thread, Traditional Medium and
Thick/Udon plus seven different sauces: Aromatic Black Bean, Sweet Soy, Chow Mein,
Cracked Black Pepper, Rich Oyster and Garlic, Roasted Peanut Satay, Classic Sweet
and Sour and Perfect Plum.
Figure 4.15: Amoy noodles
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Approach
Dragon designed the new packaging for the noodles and sauce ranges. The new design
puts the emphasis not on a final ’model’ meal, but on the quality and simplicity of the
ingredients presented in a bold and honest way.
Dragon modernised the layout of the pack, including updated typography, reduced the
amount of red on the pack and integrated a collection of contemporary pictures on the
packaging. These changes all contributed to delivering the core Amoy brand values of
quality and simplicity, alongside expertise.
It is an approach that respects the role of the cook, even in today’s quick-to-table
lifestyle. And it recognises that while the preparation should be rapid and stress free, the
consumer wants the food to be delicious enough to slow life down and savour the
experience.
Canderel
Background
Merisant owns the Canderel brand, which is the leader in the UK sweetener category.
As part of a wider brand review, the company recognised a need to meet ambitious
growth targets.
Brand issues
Dragon was required to create a design solution to force consumer reappraisal of the
brand, to attract new consumers and to reinforce equity of the brand with existing
consumers.
Brand idea
‘As sweet as life’
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Figure 4.16: Canderel
Approach
Dragon introduced brand-positioning workshops, design concept generation and sought

qualitative consumer research.
Outcome
Dragon delivered a cohesive design strategy across granular and tablet formats. It
delivered a creative solution and re-vitalised the brand identity building upon the lifestyle
aspirations of the brand, creating excellent taste values and injecting modernity.
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Chapter 5
Industry Opinion Survey
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Chapter 5 Industry Opinion Survey
Summary
The concept of a brand can mean many things to different people and is often
dependent upon the perspective from which an individual works or relates to
brands.
Over 75% of the survey respondents believe that the relationship with consumers
is the most important way of defining a brand. This was followed by the fact that
the brand should have an easily identifiable, famous, well-known name.
The primary role of a brand, according to survey respondents, is to increase sales

and profits of the brand-owner. Of secondary importance is the brand’s ability to
engender and improve customer loyalty, which in turn is followed by its ability to
build trust with consumers.
The market growth rates in a new brand’s product sector (i.e. chocolate bars, as
opposed to its category sector confectionery) are the most important attributes
when considering the launch of a new brand.
The brand attributes thought to be of the greatest importance, following product

availability, refer to the design of the product and the way it is delivered to the
consumer in terms of packaging.
The leisure industry (encompassing a wide range of activities including cinema and
travel, for example) offers very strong brand strategies that should be adapted to
food and drinks sectors.
Health, wellness and obesity are expected to be the most important issues driving
brand development over the next three years.
Senior-specific issues will play a prominent role in brand developments over the
next three years, as seniors rank ahead of families and kids as the most influential
consumer sector.
Brand ownership, in a corporate sense, will be a vital issue over the next three
years. In recent years, a number of the largest international food and drink
companies have disposed over their ‘tail’ brands to provide greater focus to their
core operations.
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Introduction
This chapter presents the results of the Brand Building Industry Opinion Survey,
conducted in December 2003 and January 2004 with the help of senior level respondents
from across the food industry; retailers, manufacturers and ingredients companies from
Europe and the U.S.
The survey was designed to be strategic and forward-looking, focusing on the role of
brands in today’s food and drinks markets allowing the reader insight into the thoughts
and predictions of their industry peers.
The survey begins by defining the concept of a brand and identifying what are the most
important functions of a brand. It then aims to define the market attributes that influence
a branding strategy for a new product. The survey goes on to identify the branding
issues which are important to consumers when making food and drinks purchasing
decisions, before identifying the industries from which the food and drinks industry can
learn about intelligent branding strategies.
Finally, the survey seeks to identify the issues in the food and drinks market that will
feature most heavily in brand strategy development over the next three years, both from
a product and category perspective, and also a corporate perspective.
To summarise, the chapter addresses key issues within five main areas:
Defining a brand;
launching a new brand;
brands and consumers;
brand strategies;
the future of brands.
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Defining a brand
The concept of a brand can mean many things to different people and is often dependent
upon the perspective from which an individual works or relates to brands. To try to
provide a conclusive definition of a brand, the survey began by asking respondents what
issues and attributes are important when it comes to defining the concept of a brand.
Brands are defined by customer relationships
Over three-quarters of the survey respondents believe that the relationship with
consumers is the most important way of defining a brand. This was followed by the fact
that the brand should have an easily identifiable, famous, well-known name is also seen
as important to brand definition, as is the brand’s logo (a corporate or product
sign/emblem) and the fact that the product or service should be unique in some way.
Figure 5.17: How do you define the concept of a brand?
Logo - corporate or
product sign/emblem
Relationship with specific

consumers of
products/services
Relationship with general

public
Unidentifiably
image/collection of
attributes
Famous well-known name
Unique product/service
0% 20% 40% 60% 80% 100%
Not important Low importance Average importance High importance Unsure
Source: Global Brand Building Industry Opinion Survey 2004 Business Insights
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Brands must increase sales and improve loyalty
When it comes to defining the function of a brand, over 80% of respondents believe the
primary role of a brand is to increase sales and profits of the brand-owner. Of secondary
importance is the brand’s ability to engender and improve customer loyalty, which in
turn is followed by its ability to build trust with consumers.
The ability of a brand to reduce operating costs and to be transferable across categories
is seen as being of less importance. Almost one-in-five respondents also stated that it is
either ‘not important’ or is of ‘low importance’ for a brand to reflect its owners’
corporate image.
Figure 5.18: What are the most important functions of a brand?
Differentiator from competitors' products/brands
To create barriers to entry for other companies
To lead the market
Reflect the corporate image
Build trust/reassurance with customer
Improve customer loyalty
Provide potential for cross-category extensions
Provide potential for product extensions
Improve volume sales
Reduce operating costs
Increase revenues and profits
0% 20% 40% 60% 80% 100%
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Launching a new brand
What market information do manufacturers require when considering the launch of a

new brand? The Global Brand Building Survey asked respondents to assess the
importance of a number of possible factors, including market growth rates in product
sectors (i.e. chocolate bars), growth rates in category sector (i.e. confectionery), the
level of penetration/market share of existing leading brands, the market size in
value/volume terms, consumer profiles, the success of any prior launches in different
countries, wider growth in the economy and the size of any marketing budget (i.e.
amount of advertising spend) that can be allocated to the brand.
Product sector growth rates are vital to brand launches
Almost three-quarters of respondents stated that market growth rates in the new brand’s
product sector (i.e. chocolate bars, as opposed to its category sector - confectionery)
are the most important attributes when considering the launch of a new brand. The
penetration and market shares accounted for the existing brand leaders is also
considered to be very important, as is an understanding of their recent brand activity.
Whilst first-movers can often gain an advantage in new markets, with the benefit of
hindsight it is also relevant to learn from any mistakes they may have made and to try to
correct these in manufacturers’ own brand launches.
Consumer profiles in the target sector is considered to be the next most important piece
of information that is required to successfully launch a new brand, followed by
information on the size of the target sector, both in value and volume terms.
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Figure 5.19: How important do you regard the following market attributes
when considering a branding strategy for a new product?
Size of marketing budget
Wider growth of economy
Success of any prior launches in different countries
Consumer profiles
Market size in value/volume terms
Penetration/market share of existing leading brands
Market growth rates - category sector
Market growth rates - product sector
0% 20% 40% 60% 80% 100%
Among the issues considered to be of relatively low importance, or those considered to

be not at all important are; wider growth within the economy and the success (or failure)
of any prior launches of the brand in other countries.
Brands and consumers
According to the survey respondents’ opinions of consumer behaviour towards brands,

the availability of a brand has the most influence on consumer purchasing decisions,
above (in no particular order) design features, product variety, content information,
packaging, manufacturer knowledge and product endorsements.
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Availability is imperative, along with design and packaging
The brand attributes thought to be of the greatest importance following product

availability are not related to actual product consumption, but refer to the design of the
product and the way it is delivered to the consumer in terms of packaging.
Figure 5.20: Which branding issues are important to consumers when making
food and drinks purchasing decisions?
100%
Very strong
influence
80%
Influence above
average but not
exceptional
60%
Average
influence
40%
Some influence
20%
Very low
influence
0%
Variety in product
Knowledge of
Product availability
Packaging
Product design
Content/product
Partners/endorsements
manufacturer
information
range
Brand strategies: learning from others
Respondents were asked from which industries they could learn from, with regards to
intelligent branding strategies.
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Lessons can be learned from the leisure industry
According to almost one-in-four respondents of the survey, the leisure industry

(encompassing a wide range of activities including cinema and travel, for example)
offers very strong brand strategies that should be adapted to food and drinks sectors.
Respondents believe that the branding strategies adopted by the retailers also offer a
number of lessons to the food and drinks industry with almost one-half of those
surveyed (46%) believing that it is likely that the media industry can offer food/drinks
manufacturers lessons in brand strategies.
Figure 5.21: From which industries can the food and drinks industry learn
more about intelligent branding strategies?
Media
Pharmaceuticals
Leisure
Automotive
Domestic Energy
Financial Services
Apparel
Retailing
Telecoms
0% 20% 40% 60% 80% 100%

Very unlikely for manufacturers to contemplate similar strategies
Not a first choice option to consider
Possible strategies that could be learnt
Likely that this industry can teach food/drinks manufacturers
Very strong brand strategies that should be adapted to food and drinks sectors
Whilst the automotive industry ranked higher than either telecoms or clothing, those
industries whose brand strategies are most unlikely to offer food and drinks companies
any lessons are the domestic energy and financial services industries.
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Branding food and drinks: the future
Looking forward to the development of brand strategies over the next three years,
survey respondents were asked to identify the issues in food and drinks markets which
will feature most heavily in brand strategy development over the next three years.
Health issues will drive brand development strategies
It is perhaps of little surprise that two of the three consumer megatrends feature as being
the most important to brand development over the next three years. Specifically, health,
wellness and obesity issues are expected to be the most important drivers of brand
development, with 75% of respondents believing the issue will be ‘very influential’.
Following quite closely behind, two-thirds of the survey respondents expect the
convenience issue to be ‘very influential’ to brand development over the next three
years.
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Figure 5.22: Which issues in the food and drinks market will feature most
heavily in brand strategy development over the next three years?
Seniors' Specific
Family Specific
Kids' Specific
Fair Trade
Supply Chain Management
Health / Wellness
Functional
Organic
Convenience
Green Issues
0% 20% 40% 60% 80% 100%
Very low influence Less than average influence Average influence

Influential but not exceptional Very influential
Linking the convenience and health issues together, one-third of respondents see
functional product issues being very influential for brand development in the short term
future as consumers look for their favourite brands to be conveniently fortified with
additional supplements and ingredients that compensate for deficits in their diets
elsewhere.
Categorising consumers by target grouping reveals that senior-specific issues will play a
prominent role in brand developments over the next three years, as respondents placed
this category ahead of family groups and kids as being the most influential consumer
sector.
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Brand rationalisation continues to be important
Respondents see brand ownership, in a corporate sense, as a vital issue over the next
three years. In recent years, a number of the largest international food and drink
companies have disposed over their ‘tail’ brands to provide greater focus to their core
operations and the survey respondents expect this rationalisation of brands to continue
to be a significant issue over the next three years.
Figure 5.23: What will be the key corporate issues in brand development in
food and drinks markets over the next three years?
Rationalisation of brands by
the multi-nationals
Demand for imaginative

marketing strategies from
consumers
Closer manufacturer-retailer
alliances
Increasing threat from private

labels
Greater demand for new

product development
Greater competition between

manufacturers
0% 20% 40% 60% 80% 100%
Very low importance Some importance

Average importance Above average importance
Very strong importance
As they continue to focus on their core strengths, so the largest manufacturers are
expected to invest in NPD to launch new brands rather than extend existing brands in
their portfolio. Additionally, as competition between manufacturers is expected to
intensify, the next three years are likely to see greater demands for new product
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development and higher demand from consumers for more imaginative marketing
strategies.
Whilst one-in-four survey respondents expect to see an increasing threat to the leading
brands from private label products, the issue is considered to be among the most
important facing brand managers by the vast majority of respondents. Private labels have
extended their reach across food and drinks sectors but more recently have faced a
struggle to maintain their phenomenal growth rates. However, they will continue to
receive significant marketing support from their owners, the retailers and look set to
continue to make in-roads into market shares of the number one, two and three brands
in many food and drink sectors.
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Chapter 6
Conclusions
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Chapter 6 Conclusions
Summary
In dairy markets, the Dutch and U.S. cheese and yoghurt markets have grown
most quickly in recent years, with the Spanish yoghurt market also growing
strongly.
As FAB markets develop from relatively small bases, they will continue to be
characterised by dominant positions of the leading brands, though this dominance
will be expected to decline.
The profile of brands in wine markets will continue to grow as multi-national

players’ mass marketing strategies widen the customer base in the category
Whilst innovation will continue to drive growth in food and drinks markets,
marketing and branding strategies have a key role to play to ensure the ultimate
success of a new product and to justify the R&D expenditure.
In the same way that product portfolios are aligning with consumer needs, so
branding strategies should focus on practical, consumer-focused solutions rather
than textbook theory.
The key premium brands of the future will be based on consumer values and
aspirations, not physical products.
Health, wellness and obesity issues are expected to be the most important drivers
brand development over the next three years.
Functional products will become increasingly influential for brand development in

the short-term future as consumers look for their favourite brands to be
conveniently fortified with additional supplements.

deliver a strong and trusted perception of a product that increases its customer
base and ensures the loyalty of existing customers.
Brand ownership, in a corporate sense, will be a vital issue over the next three
years, as manufacturers seek to acquire, dispose, extend and cross-sell their food
and drinks brands.
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Introduction
This chapter presents the main findings of the report, with a forward-looking bias. It
begins by looking at market growth opportunities for global brands in the food and
drinks industries.
The chapter then goes on to highlight key branding issues facing manufacturers and
identifies action points for food and drinks manufacturers wishing to maximise the
growth opportunities for their brands.
Growth opportunities in food and drinks
The following section aims to identify which markets and categories will offer food and
drinks manufacturers the best potential for growth, based on analysis of recent market
performances and the positions of the leading brands.
Dairy markets have grown strongly, but private labels dominate
Over the 1998—2003 period, dairy markets recorded strong growth. Overall dairy
markets grew by over 20% in France, Netherlands, Spain and the U.S. At a category
level, the strongest performers over the 1998—2003 period were the U.S. yoghurt,
Spanish yoghurt, Swedish chilled snacks and desserts and the UK chilled snacks and
desserts segments, which each recorded growth in excess of 50% over the six year
period.
However, the private label ‘brand’ dominates dairy markets, certainly in cheese and
yoghurt categories. In these categories, using market growth over the last six years as an
indicator of where future growth opportunities may lie, the Dutch and U.S. cheese and
yoghurt markets grew most quickly, with the Spanish yoghurt market also growing
strongly. However, in Spain, the leading yoghurt brand already holds a dominant
position, accounting for over 56% of the market.
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Confectionery
Over the 1998—2003 period, confectionery markets recorded steady growth, though
rates were lower than those experienced in dairy markets. Only Spain saw growth of
over 20% between 1998 and 2003, whilst the UK market recorded growth of just 5.9%
over the six-year period. At a category level, the strongest results have been in the gum
sector, with the Italian, Spanish and UK markets being particularly strong performers.
In confectionery, private labels do not dominate in the same way as dairy, although they
are particularly strong in the sugar segment. In chocolate confectionery markets, which
are relatively fragmented, the leading brands accounts for around 11.5% of the market
(on average).
Most savoury snack markets have recorded strong growth in recent years (with rates
above 20% for the six-year period 1998—2003), with the exceptions being the UK,
Netherlands and Sweden. There does not seem to be one easily identifiable category that
is the fastest growing, as consumers in different countries favour various products. In
Belgium and Germany it is potato chips, in France it is corn-based snacks as it is in Italy;
in Spain and the U.S. it is the nuts and seeds segments that are growing most quickly,
whilst popcorn is the fastest growing segment in the UK and the Netherlands.
UK, Belgium and Germany are a focus for FAB brands
Over the 1998—2003 period, beer markets recorded little growth, outside of Spain, UK
and the U.S. In Spain, the leading brand has an 18% share of the market and its Sales
per capita is over 15 litres per year.
At a category level, the strongest results were all in the FAB sector, with the Belgian
and UK markets being particularly strong performers. As FAB markets develop from
relatively small bases, they will continue to be characterised by dominant positions of the
leading brands, though this dominance will be expected to decline. With the number one
brand holding almost 70% of the market in Belgium, 32% in France, 32% in Italy, 34%
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in the Netherlands, 64% in Spain, 28% in the UK and 38% in the U.S., there is
significant potential for growth across many countries as they follow the lead set by the
UK, Belgian and to a lesser extent, German markets.
Spirits markets are likely to continue to struggle for growth. Over the 1998—2003
period, the Belgian, German, Italian, Dutch and Swedish markets all fell in size. In
addition, the French market grew by just 0.6% over the six-year period, whilst the UK
market grew by only 1.0%. Growth prospects are perhaps best served by the tequila
segment. At a category level, they have performed reasonably well over the last six
years, generating growth of 42.6% in Belgium, 38.1% in Germany, over 150% in Spain
and almost 60% in the U.S. The profile of brands in wine markets will continue to grow
as multi-national players’ mass marketing strategies widen the customer base in the
category.
Soft drinks markets have recorded strong growth in recent years, with the Belgian,
French, Italian, Spanish, UK and U.S. markets all growing by over 20%. In the
Netherlands, the market grew by over 77% in value terms over the 1998—2003 period.
At a category level, functional drinks looks set to be an area for future growth, as the
category is already performing well in Belgium, Germany, the UK and the U.S. In
carbonates, where Coca-Cola will continue to dominate, markets have seen steady-
strong growth, with growth particularly high in the Netherlands, whilst Spain and the
U.S. have demonstrated high rates of growth in the bottled water category.
Key issues in food and drinks branding
As the leading food and drinks manufacturers align their product portfolios with the
needs of the modern consumer, the three major consumer trends - convenience, health
and pleasure will continue to shape product, brand and marketing strategies.
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Whilst innovation will continue to drive growth in food and drinks markets, marketing
and branding strategies have a key role to play to ensure the ultimate success of a new
product and to justify the R&D expenditure. In the same way that product portfolios are
aligning with consumer needs, so branding strategies should focus on practical,
consumer-focused solutions rather than textbook theory. Brands will be least likely to
succeed when their manufacturers base decisions on marketing theories instead of
customer requirements. The key premium brands of the future will be based on
consumer values and aspirations, not physical products, and they will have a
differentiated and distinct identity.
Health issues will drive brand development strategies
Together with convenience and health, wellness and obesity issues are forecast to be
among the most important facing brand managers in upcoming years. The issue of health
and obesity in the diets of Western European and U.S. consumers has now reached a
critical level such that where manufacturers once saw only the burden of higher costs
associated with product modifications, they now see growth opportunities in segmenting
many sectors in terms of health and wellness.
For food and drinks manufacturers, categorising their markets by such consumer trends
will enable them to create new strategies for increasing market share without
cannibalising markets for their existing products.
In terms of segmenting a brand’s customer base by age-group, manufacturers should

increasing look to seniors to boost sales, as this group is expected to be more influential
than any other when it comes to driving growth and the success of food and drinks
brands. There are key differences in the way that older consumers and other shoppers
choose their brands. Older consumers are more likely than the under 55s to:
Find a brand and stick to it (although over half of both groups of consumers claim
this);
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believe that own label products share manufacturers with branded products, and that
own label products are the same quality as well-known brands;
tend towards the same brands every time, change size of the product rather than
change brand, and lean towards well-known brands.
Case study: extending the health benefits of orange juice
In 2003, Interbrand was asked by Tropicana to help brand a new premium product
called Pure Orange. The Minute Maid Company, a competitor to Tropicana, had
previously introduced a premium orange juice product named Simply Orange and
Tropicana was looking to fight back in the battle for market share.
To contrast with the fact that Simply Orange was making no reference to its parent
company, Interbrand developed a range of concepts with a focus on the heritage of
Tropicana and the naturalness of the brand. The company selected a package design that
featured an orange crate with the Tropicana Pure Premium logo embossed on the side
and as an added endorsement to build on the heritage of the brand, the character Tropic
Ana is seen at the top of the label reinforcing the originality of the brand.
In January 2004, Tropicana further extended its pure premium range in the United
States when it added a new sub-line of fortified orange juice and juice beverage products
to its portfolio.
Pure Premium Essentials was launched in five varieties as a part of the Tropicana Pure
Premium line, containing less sugar and calories, with more vitamins and minerals. The
five varieties in the new Essentials range are:
Light 'n Healthy, with one-third less sugar and calories than standard orange juice;
Healthy Heart, with six vitamins and minerals proven to positively effect risk factors
for cardiovascular disease;
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Immunity Defence, with three antioxidants: vitamins C and E and selenium, to
support a healthy immune system;
Low Acid, which delivers less acid without compromising taste;
Healthy Kids, with immunity-supporting vitamins and calcium for strong bones and a
specially formulated, kid-friendly taste.
Figure 6.24: Pure Premium Essentials from Tropicana
Source: http://www.tropicana.com/index.asp?id=88 Business Insights
In launching the new range, Tropicana is attempting to cut the calories offered in its
standard products without losing any of the nutritional benefits. The company uses a
proprietary, patent-pending process to reduce sugar and calories by one-third without
compromising on the product’s taste or nutrition.
The new range first hit store shelves in January 2004. Tropicana Pure Premium
Essentials are packaged in 64-ounce cartons and are priced the same as all other Pure
Premium 64-ounce products.
Brands will continue to be challenged by private labels
As private label products extend their reach into nearly every food category, quality
standards are continually raised. However, in recent years, national brands have, to a
certain extent, fought back against the rise of private labels, which have been unable to
sustain their previously high growth rates.
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The Brand Building Industry Opinion Survey, conducted for this report, highlighted that
private labels will remain a competitive threat to the growth of some national brands.
Major retailers are not expected to give up on the significant levels of marketing support
they have invested in their products and some second or third-placed brands may lose
out to the power of the retailers. That said, however, the major brands will remain
essential for grocery retailers to stock as they generate store traffic. To remove them
from their shelves runs the considerable risk of alienating their customers and this is a
risk that the retailers will be unwilling to take.
Global aspirations branded at a local level
As economies become increasingly service-based, a consumer’s brand experience no

longer stops with the purchase of a product. Manufacturers will have to look to leverage
their brand equity, often with the provision of after-sales services, using such tools to
differentiate themselves from their competitors. In food and drinks markets, this means
building a perception of trust and confidence in products that will engender customer
loyalty. As consumers use the Internet to search and evaluate products before they
purchase, manufacturers will increasingly need to maintain consistent imagery and
recognition of a brand, which may mean discarding the use of different product names in
different countries.
Manufacturers: to dispose, acquire or extend?
With significant corporate activity having taken place in food and drinks markets in
recent years, the levels of which are not expected to continue, much corporate brand
activity will focus on extensions and cross-selling opportunities.
Respondents to the Brand Building Industry Opinion survey regard brand ownership, in
a corporate sense, as a vital issue over the next three years. In recent years, a number of
the largest international food and drink companies have disposed over their ‘tail’ brands
to provide greater focus to their core operations and the survey respondents expect
corporate ownership to be a significant issue over the next three years.
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Many food and drinks manufacturers have used brand extensions as a growth strategy.
This is often viewed as a less-risky approach to expansion, as it can help build brand
awareness more quickly by leveraging the success enjoyed by the existing brand and
enables the manufacturer to benefit from scale economies.
However, brand extensions must fit and be consistent with the core brand message, as
perceived by consumers. As long as the extension is both relevant and credible, the use
of an existing brand goes a long way to ensuring the success of a new product.
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Chapter 7
Appendix
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Chapter 7 Appendix
Primary research methodology
As a key element of the primary research effort for this report, Business Insights carried
out a comprehensive survey in December 2003. Major companies across Europe and the
U.S. were surveyed to canvass their opinions on a number of issues relating to the
issues, trends and developments highlighted in this report. In addition, key industry
sources were surveyed using a combination of telephone interviews and questionnaires
by the author.
Terms and abbreviations used in this report
A list of the most commonly used terms and abbreviations used in the report and their
meanings are provided in the following table.
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Table 7.33: Terms and abbreviations used in this report
Term Definition
CAGR The compound annual growth rate (CAGR) is a way of measuring a

market’s annual growth over a period of several years. It is the constant
percentage rate at which a market would have to grow, year on year, to
reach its current value from the value in a base year. It is not the same as
average growth but is a more representative measure of annual growth
over a number of years.
Convenience This is a key trend driving the movement for nutrition ‘‘on-the-go’’. It is
caused by pressure on time and pertains to something that is useful,
available and ready to use.
Foodservice Food channels such as takeaways, restaurants and catering.
Fun Defined here as comprising visual, sensory, interactive and inspirational

elements.
Functional and fortified The use of nutrients, vitamins, minerals, fibres and other ingredients to
enhance the health benefits of specific products.
Guilt-free indulgence Products that offer the dual benefits of being low and light and claim to
be indulgent.
Indulgence Products that are positioned as indulgent or luxurious through their

marketing or formulation.
Low and light Refers to products that claim reduced, very low or zero levels of sugars
and fats than may be expected for the food type.
Organic A term that is legally defined by EU Regulation 2092/91. It is used to

describe products that are grown without the use of synthetic chemicals
in a farming system that avoids the use of artificial fertilisers, pesticides,
growth regulators and livestock feed additives.
Planned impulse A consumer shopping pattern whereby products are purchased either at
the point of use or in the expectation of use at some appropriate but
unknown juncture.
Private label Products that are exclusively manufactured for, distributed and marketed
by specific retailers.
Super premium Refers to products that have a higher quality and exclusivity positioning
than premium goods characterised by a strong brand image and an
exceptionally high price.
Treating Treating is a usually a personal and very individual activity. What one
consumer regards as a treat another may simply consider normal
expenditure, so a fixed definition of what a treat consists of is difficult to
provide. One view is that treating represents additional spend over and
above one’s ‘normal’ expenditure.
Source: Author’s research Business Insights
113
TLFeBOOK
Food and drinks segmentation table
The following table defines the market segmentations used in the analysis of food and
drinks markets throughout the report.
Table 7.34: Definitions of food and drinks segments used in this report
Market and segment Definition
Bakery
- Bread and rolls Includes industrial, artisanal and in-store bakery products.
- Breakfast cereals Both ready-to-eat and hot cereals.
- Cakes and pastries Includes industrial, artisanal and in-store products.
- Morning goods Includes industrial, artisanal and in-store products.
- Savoury biscuits Includes crackers, dry wafers and snack biscuits.
- Sweet biscuits Defined to include artisanal, assortments, butter-based, chocolate,

cookies, cream-filled, egg-based, plain, wafers and those baked in-
store.
Confectionery
- Cereal bars Bars made from cereal products
- Chocolate Products which contain either real chocolate or a chocolate

compound containing substitute raw material ingredients such as
cocoa butter extenders.
- Gum A type of chewing gum that can be blown into large bubbles.
- Sugar confectionery Sugar mass, which is processed to be non-grained or to be grained

through aeration. Includes sugar-free varieties. Also known as
bonbons in France.
Dairy
- Chilled desserts Industrially manufactured, ready-to-eat chilled desserts.
- Concentrated milk Milk preserved and concentrated through the removal of water
and additional processes.
- Cream Chilled long life and frozen cream
114
TLFeBOOK
continued
Market and segment Definition
- Cream Chilled long life and frozen cream
- Fats and spreads Also known as spreadable fats or yellow fats.
- Fromage frais desserts Fromage frais is also known as curd cheese or quark. This
category only includes fromage frais packaged as a dessert.
- Ice-cream Dairy ice cream and ice milk with fat from either animal or
vegetable sources. Includes both full fat and low fat products.
- Liquid milk Fresh pasteurised milk or long-life products.
- Natural cheese A fresh or ripened dairy product obtained after coagulation and
separation of milk, requiring refrigeration.
- Powdered milk Not included is liquid coffee creamers.
- Processed cheese Processed cheese is a blend of natural cheese and emulsifier which
is heated to stop ripening.
- Yoghurt Includes regular, bioactive, set and drinking formats.
Snacks
- Popcorn A variety of maize having hard pointed kernels that puffs up when
heated.
- Potato chips Potato chips or crisps are products produced directly from the cuts
of potatoes.
- Savoury snacks Includes ethnic snacks, extruded snacks, corn chips, tortilla chips
and pretzels.
- Snack nuts Covers all packaged processed nuts, by either being cooked in oil
and salted or dry roasted. This includes only snack nuts and does
not include nuts used for cooking.
Alcoholic Drinks
- Alcoholic soft drinks Fruit- or water based flavoured drink with an a.b.v of around 5%
containing a fermented element. Examples include Mike’s Hard
Lemonade.
- Beer Includes ales and stouts, lagers and speciality beer.
- Brandy Brandy is distilled from wine or a fermented fruit mash. Almost

all brandies are aged. They have a minimum a.b.v. of 36%.
115
TLFeBOOK
continued
Market and Segment Definition
- Gin and Genever Gin is an infusion of juniper berries in alcohol with herbs and
orange blossom. It has a minimum a.b.v. of 37.5%. The segment
also includes many gins, mainly private label that use a less
traditional process called cold compounding. Genever is a juniper-
based spirit made with malt wine.
- Light Rum Produced from sugar cane juice or molasses. It has a minimum
a.b.v. of 37.5%.
- Liqueurs All liqueurs consist of a base spirit blended with a flavouring

agent and sweetener. They have an a.b.v. of at least 15% and
contain at least 2.5% sugar. All liqueurs except dry liqueurs
actually have a sugar content of at least 10%.
- Premium beer Beer marketed and sold as a premium product. Products falling
into this category usually include imports, premium priced and
super strength beer, although this does vary by county.
- Pre-mixed spirits Ready-to-drink products consisting of a spirit base blended with a

soft drink mixer. Example brand is Bacardi Breezer.
- Speciality Spirits Spirits often associated with a particular country or region.

Includes Ouzo, Schnapps, Sake, Grappa and Arrack, among
others.
- Tequila and Mezcal Mezcal is a spirit made from the blue agave plant but originating
outside the delineated boundaries of the Tequila region in Mexico.
Other imitation ‘tequilas’ from Greece and Spain often use sugar
or beet alcohol as a base. Tequila is a strong white spirit from
Mexico. Traditionally, at least half of the content must be from
the blue agave plant.
- Vodka Vodka is traditionally a spirit without any distinctive aroma,

colour or taste. It is distilled from a fermented mash of grain (or
molasses or potatoes) at a very high proof (about 190).
- Wine coolers Wine based, single-serve products - an a.b.v. of less than 7%.
- Whisky Whisky is produced by distillation of a mash of cereals. It has a

minimum a.b.v. of 40%.
116
TLFeBOOK
continued
Market and Segment Definition
Non-alcoholic drinks
- Bottled water Sparkling, still water, up to and including five litre packaging.
Mineral water is from an underground source, and is bottled at
source with no treatments except filtration. Spring water may be
treated. Table water is a mixture of spring water and tap water.
- Carbonates Cola, orange, mixers. Includes regular cola, as well as the

caffeine-free, diet and fruit types.
- Energy drinks Drinks that replace the energy (liquid, salts) lost before, during or
after exercising or playing sport or indeed following illness.
- Sports drinks Drinks containing ingredients which provide a range of nutrients

in addition to energy. They stimulate the energy process and
compensate for nutrient and fluid loss.
- Juices The juice category includes juices, which are extracted from fruit
or vegetables and sold in concentrated or un-concentrated forms.
- New Age Beverages Include herb based drinks, iced-coffee and iced teas. Does not
include carbonated non juice-based soft drinks.
117
TLFeBOOK
Index
43, 45, 46, 47, 49, 50, 51, 52, 53, 54, 104,
alcohol, 116 105
bakery, 114 health, 58, 59, 60, 61, 72, 96, 97, 105, 106,
107
Belgium, 10, 24, 26, 27, 29, 30, 32, 33, 35, 36,
37, 38, 39, 40, 42, 43, 45, 46, 47, 49, 50, Health, 113
51, 52, 53, 54, 104, 105
innovation, ii, 12, 75, 102, 106
brand extension, 59, 74
Interactive, 113
cheese, 10, 24, 25, 26, 27, 28, 29, 30, 102, 103,
115 Italy, 10, 19, 21, 24, 26, 27, 29, 30, 32, 33, 35,
36, 37, 38, 39, 41, 42, 43, 45, 46, 47, 49,
confectionery, 10, 24, 25, 31, 32, 34, 35, 66, 50, 51, 53, 54, 55, 104
68, 72, 73, 74, 75, 78, 88, 92, 104, 114
juices, 25, 49, 54, 61, 117
convenience, ii, 59, 60, 82, 96, 97, 105, 106
Juices, 117
Convenience, 113
loyalty, 11, 12, 15, 58, 60, 62, 64, 65, 69, 70,
cool, 58, 63, 64 72, 88, 91, 102, 109
dairy, 10, 24, 25, 26, 27, 28, 30, 32, 74, 102, manufacturers, ii, 14, 16, 20, 58, 59, 60, 61,
103, 104, 115 62, 64, 66, 67, 69, 70, 71, 72, 75, 76, 89,
92, 95, 98, 102, 103, 105, 106, 107, 109,
desserts, 25, 26, 74, 75, 103, 114, 115 110
drinks, 114, 115, 116, 117 Netherlands, 10, 19, 24, 26, 27, 28, 29, 30, 32,
33, 35, 36, 37, 38, 39, 40, 41, 42, 43, 45,
Europe, 15, 17, 24, 26, 27, 32, 37, 40, 45, 72, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 103,
75, 89, 112 104, 105
FABs, 25, 39, 40, 41, 43, 44 nostalgia, 58, 62, 63
foodservice, 16, 20, 75 packaging, ii, 11, 58, 62, 63, 64, 68, 76, 80,
81, 83, 85, 88, 93, 94, 117
France, 10, 18, 19, 24, 26, 27, 29, 30, 32, 33,
34, 35, 36, 37, 38, 39, 40, 42, 43, 45, 46, premium, ii, 15, 60, 65, 70, 79, 102, 106, 107,
47, 49, 50, 51, 52, 53, 54, 103, 104, 114 113, 116
Frozen food, 30, 31, 35, 39, 43, 44, 47, 53, 54, price, 70
55, 66, 74, 80, 83, 84, 86, 90, 91, 93, 94,
95, 97, 98, 108 private label, 10, 24, 27, 37, 45, 46, 47, 58, 59,
64, 69, 70, 71, 99, 103, 108, 116
Fun, 113
retailers, ii, 11, 15, 58, 69, 70, 71, 89, 95, 99,
Functional & fortified, 113 109, 113
Germany, 10, 18, 19, 21, 24, 26, 27, 28, 29, Sainsbury’s, 71
30, 31, 32, 33, 35, 36, 37, 38, 39, 40, 42,
118
TLFeBOOK
seniors, 12, 88, 106 Sweden, 10, 18, 19, 24, 26, 28, 29, 30, 32, 34,
35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45,
snacks, 25, 26, 36, 37, 38, 39, 75, 103, 104, 46, 47, 49, 104
115
UK, 10, 18, 19, 20, 24, 26, 27, 28, 29, 30, 32,
soft drinks, 10, 16, 24, 25, 48, 49, 52, 53, 54, 34, 35, 36, 37, 38, 39, 41, 42, 43, 45, 46,
73 47, 48, 49, 50, 52, 53, 55, 62, 65, 71, 83,
84, 85, 103, 104, 105
Spain, 10, 24, 26, 28, 29, 30, 32, 34, 35, 36,
37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, United States, 15, 61, 107
49, 50, 51, 52, 53, 54, 55, 103, 104, 105,
116 US, 89
spirits, 11, 24, 25, 44, 45, 46, 47, 116 yoghurt, 10, 24, 25, 26, 30, 31, 102, 103
119
TLFeBOOK
120
TLFeBOOK

Winning Brand Strategies in Food and Drink

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Winning Brand Strategies in Food and Drink

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CONSUMER

Brand Building Strategies in Food and

Mark O’Bornick is a consultant, specialising in strategic research and consulting

Copyright © 2004 Business Insights Ltd

Chapter 2 Market Dynamics 24

Chapter 3 Key Issues in Branding Food and

Chapter 5 Industry Opinion Survey 88

Chapter 6 Conclusions 102

Chapter 7 Appendix 112

Danone occupies a dominant position in the Spanish yoghurt market.

FAB (flavoured alcoholic beverages) markets are characterised by dominant

Key issues in branding

It is not necessarily the contents of products, or their packaging that must be

Best-practice case studies

As products become more difficult to differentiate, a successful brand strategy will

The aim of this report

Industry Opinion Survey - Chapter 5 provides detailed analysis of an exclusive

Conclusions - Chapter 6 provides a concise summary of the key conclusions of the

Where does food and drink fit in?

In foodservice, McDonald’s features in eighth position, Nescafé, Budweiser and Pepsi

1 Coca-Cola 70.45 Soft drinks

Source: Interbrand Business Insights

Procter & Gamble Co. Cincinnati 3,820

Source: Advertising Age’s Global Marketers Report 2002 Business Insights

Danone occupies a dominant position in the Spanish yoghurt market.

FAB (flavoured alcoholic beverages) markets are characterised by dominant

$7.27 for the leading yoghurt brand;

$14.95 for cheese;

$6.65 for savoury snacks.

0.42 litres for FABs;

14.62 litres for carbonated soft drinks;

10.46 litres for bottled waters;

2.62 litres for juices;

0.59 litres for spirits.

Brand dynamics in dairy

Table 2.6: Dairy market dynamics, 1998 and 2003

Belgium Total* 2,358.97 2,677.35 13.5%

Source: Author analysis, Datamonitor Business Insights

Table 2.7: Dairy brand dynamics by key category, 2002

Belgium Cheese Private label Private label 5.0

Source: Author analysis, Datamonitor Business Insights

Spain Cheese Garcia Baquero Lácteas García-Baquero SA 5.9

Source: Author analysis, Datamonitor Business Insights

Brand analysis in dairy markets: cheese

Belgium Private label 6.44 15.6% 5.0%

Source: Author analysis, Datamonitor Business Insights

50.0% Faster growing Sales/

Source: Author analysis, Datamonitor Business Insights

Brand analysis in dairy markets: yoghurt

Table 2.10: Yoghurt brand dynamics, 1998—2003

Belgium Private label 3.64 23.3% 15.7%

Source: Author analysis, Datamonitor Business Insights

Figure 2.2: Yoghurt brand dynamics, 1998—2003

30.0% France Faster growing Sales/

10.0% Greater Brand Share

Source: Author analysis, Datamonitor Business Insights

Brand dynamics in confectionery

Confectionery markets boosted by growth in gum segments

Table 2.11: Confectionery market dynamics, 1998 and 2003

Belgium Total* 1,063.76 1,178.68 10.8%

Source: Author analysis, Datamonitor Business Insights

Private labels not as dominant in confectionery

Belgium Chocolate Côte d’Or Kraft Foods Belgium SA 11.3

Source: Author analysis, Datamonitor Business Insights