Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Coca-Cola Company (KO), PepsiCo, Inc. (PEP), Kellogg Company (K): Four Companies Seemingly Immune From Brand Label Disloyalty

Page 1 of 2

Watch out, Oreos. You too, Sprite. Quit laughing, Fruity Pebbles. You aren’t immune from this, either.

In the wake of the most recent recession, many consumers are rethinking past cavalier spending habits. And a recent study shows one way people are cutting back is by switching to private-label goods. Big brands, are your days numbered?

A shift in the way people shop
According to Deloitte’s annual American Pantry Study, brand loyalty has dropped for the second year in a row, signaling a dwindling number of consumers who are staying loyal to their favorite brands. The study shows nearly nine in 10 consumers are swapping out big branded goods for private-label ones.

The survey also found that 94% of Americans indicate they’ll remain cautious and keep their spending for foods, beverages, and household goods at current levels, despite the rising stock market and strengthening economy.

The Coca-Cola Company (NYSE:KO)Shaking in their fancy packaging
Should the manufacturers of big-branded goods be scared? That depends. If they can find ways to differentiate their products and get them into consumers’ fridges and pantries, then they’ll come out OK. In fact, during the two years Deloitte’s study has shown declining brand loyalty, some very big brands have gotten even bigger.

The “Best Global Brands” list, from brand consultancy firm Interbrand, gives us a Who’s Who of the biggest brands in the beverage, food, and household-goods spaces. Here are the big four, with many of these brands having graced the list every single year since its 2001 inception.

Company Brand Change in Brand Value During the Last 2 Years 2-Year Total Shareholder Return
The Coca-Cola Company (NYSE:KO) Coca-Cola 10% 35%
PepsiCo, Inc. (NYSE:PEP) Pepsi 18% 23%
Kellogg Company (NYSE:K) Kellogg’s 9% 20%
H.J. Heinz Company (NYSE:HNZ) Heinz 2% 41%

Sources: Interbrand, The Motley Fool. 

If consumers are reaching for private labels more often these days, someone forgot to tell these four big-branded manufacturers. All of the companies’ respective Best Global Brands have increased in brand value during the past two years, according to Interbrand’s proprietary formula. Shareholders have also profited handsomely, with each companies’ stock returning on average at least 10% annually over this same period. And all four companies have enjoyed top-line growth over the past two years in the face of challenging global macroeconomic headwinds.

Page 1 of 2
Loading Comments...