Report: Healthier Eating Spells Bad News For Fast Food Brand Values

Report: Healthier Eating Spells Bad News For Fast Food Brand Values
SHARE
THIS



A new US report has found that the global brand values of McDonald’s, KFC, Subway, Taco Bell, Pizza Hut and Domino’s have all fallen due to heavy competition in an increasingly fragmented market as well as healthier challenger brands offering greater choice for consumers.

You can read the full report here.

Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. The world’s 25 most valuable fast food brands are included in the Brand Finance Restaurants 25.

Panera Bread, regularly lauded as the healthiest fast food chain, is a beneficiary of this trend for slightly healthier, fast-casual options. Panera’s communications and advertising (developed with lead agency, Anomaly, since 2015) draw heavily upon this theme, stressing the importance of ‘clean’, natural food as the foundation of a full and healthy life. The brand is going from strength to strength, with its Brand Index Score increasing from 71 in 2025 to 76 in 2016 and 80 this year. Brand value is up 32 per cent to US$1.9 billion.

The same cannot be said for follow fast-casual pioneer Chipotle Mexican Grill. Its brand value is down 13 per cent to US$2.9 billion. Though consumer trends are in its favour and the brand had been growing rapidly, reputational issues have dogged Chipotle over the last 18 months. In late 2015, dozens of customers were taken ill in several separate incidents due to outbreaks of Salmonella, E. coli and Norovirus.

Though firm steps have now been taken to address hygiene standards, sales for 2016 were down 13% on the year before and profits were down over 75 per cent. Some tentative signs of recovery are just starting to emerge however, suggesting that Chipotle has been able to develop a sufficiently strong brand to weather the crisis long term.

Bucking the healthy eating trend is Papa John’s, this year’s fastest growing restaurant brand. The firm continues to expand and is rapidly approaching a total of 5,000 locations. Franchisee fees are relatively high, including an ad royalty of eight per cent, though with brand value growth of 52 per cent and a 5-point increase in its Brand Strength Index score, CEO and founder John Schnatter will feel confident in justifying the royalties.

Papa John’s product and advertising are fairly traditional, Papa John’s has pioneered digital technology. It was the first pizza chain to offer online ordering, back in 2002, its first-mover advantage netting it additional market share. This year, it is trialling ‘Papa Priority’ which will enable customers to move their orders to the front of the queue for a $3 fee. Though there is every chance that this will prove popular with some customers and generate extra revenue, there is a significant risk this will alienate others, undermining Papa’s everyman image, weakening the brand. Papa John’s should ensure that it has done its brand due diligence in addition to examining the short-term financial case before proceeding.

Tim Horton’s is another strong performer, with a 45 per cent increase in brand value. The coffee chain offering may be considered run-of-the-mill to some, but its surge indicates that there is an under-exploited appetite for reasonably priced rather than premium coffee.

Its merger with Burger King has benefitted both brands (Burger King’s brand value is up 11%) as well as shareholders; the brand’s combined market capitalisation is US$4 billion higher now than at the time of the merger. The deal provides opportunities for improved distribution and cost saving. Tim Horton’s devotees may be concerned at the loss of a Canadian icon but the strength and unique identities of both brands would make the disappearance of either almost unthinkable.

Please login with linkedin to comment

Latest News

Image lead story UnLtd’s ‘Big Clash’ Raises Over $120K, With Media Owners & Media Agencies Crowned Champions
  • Advertising
  • Media
  • Technology

UnLtd’s ‘Big Clash’ Raises Over $120K, With Media Owners & Media Agencies Crowned Champions

With over 50 companies taking part, the fourth annual Big Clash cricket tournament has been the biggest yet, raising $124,000. The event once again brought the industry together for a great afternoon of cricket, drinks, music, and charity activations. This year, the event was expanded to have Media Owners, Media Agencies, Techies and Creatives all […]

SCA’s Profit Drops 21% Due To “Years Of Heavy Lifting”
  • Media

SCA’s Profit Drops 21% Due To “Years Of Heavy Lifting”

Southern Cross Austereo (SCA) has experienced a negative first half of the 2018 financial year, posting a dramatic drop in overall profit and a slight drop in revenue. The group’s net profit after tax fell 21.2 per cent to $48.5 million in the six months to 31 December 2017 (compared to the previous corresponding period), […]

by B&T Magazine

B&T Magazine
Lord Of The Fries Pays Homage To Kanye West & Kendrick Lamar In Clever Ads Via Milkman
  • Advertising
  • Campaigns

Lord Of The Fries Pays Homage To Kanye West & Kendrick Lamar In Clever Ads Via Milkman

Creative digital agency Milkman has helped Lord of the Fries (LOTF) pay homage to two of the fast food outlet’s favourite artists through a series of clever art poster adverts. Milkman re-created the latest album covers of Kanye West and Kendrick Lamar with a LOTR vibe to highlight the brand’s hip-hop roots and its favourite albums […]

Keep Left Wins PR Account For Greening Australia
  • Marketing

Keep Left Wins PR Account For Greening Australia

PR and content marketing agency Keep Left has been selected by proactive conservation organisation Greening Australia to raise public awareness of its flagship programs and national footprint. The relationship began in 2017 when Greening Australia engaged Keep Left in support of Reef Aid, a project launched with corporate partner Virgin Australia to improve water quality […]

Now Screen Repositions Organic Care Brand With New Campaign
  • Advertising
  • Campaigns

Now Screen Repositions Organic Care Brand With New Campaign

Aussie agency Now Screen has teamed up with Organic Care to reposition the brand in what has become one of the most competitive FMCG spaces. The new campaign, ‘Caring Comes Naturally’, celebrates what Organic Care has created since its inception: products that are as good for your body as they are for the environment. In […]

Can You Speak Data?
  • Marketing
  • Opinion

Can You Speak Data?

We're certainly fluent in gibberish, balderdash and claptrap here at B&T, but sadly data isn't part of the lexicon.

Opinion

by B&T Magazine

B&T Magazine
Social Change Maker Profile: Emma Heath
  • Advertising
  • Marketing
  • Media

Social Change Maker Profile: Emma Heath

B&T has partnered with UnLtd to showcase industry heroes! Well, it's arguably more heroine in the case of Emma Heath.

by B&T Magazine

B&T Magazine
Ad Fraud: A Problem We Can Solve
  • Advertising
  • Opinion
  • Technology

Ad Fraud: A Problem We Can Solve

Unlike B&T's mystery office farter, this columnist argues ad fraud is a problem that can possibly be solved.

Opinion

by B&T Magazine

B&T Magazine
Why We Pivoted Our ‘Specialist’ Agency Five Times In 15 Years
  • Marketing
  • Opinion

Why We Pivoted Our ‘Specialist’ Agency Five Times In 15 Years

In this opinion piece, Gavin McDonough (pictured above, co-founder and managing partner of Urban, shares through his own experience some valuable advice for independent specialist agencies. In November 2017, my brother Ryan and I celebrated 15 years in business. We started business out of my front room in Melbourne in 2002 – not with any grand […]

Opinion

by B&T Magazine

B&T Magazine
W+K’s Susan Hoffman Chosen As 39th AWARD Awards Chair Of Judges
  • Advertising

W+K’s Susan Hoffman Chosen As 39th AWARD Awards Chair Of Judges

Susan Hoffman, co-chief creative officer at Wieden+Kennedy (W+K), has been appointed chair of judges for the 39th AWARD Awards. Known to challenge the status quo, Hoffman is behind some of W+K’s most memorable and game-changing ads, including Nike’s ‘Revolution’, Old Spice’s ‘The Man Your Man Could Smell Like’ and Chrysler’s Super Bowl spots starring Eminem and Clint […]

Experiential Agency Kreate Gets Bought Out By Staffers
  • Marketing

Experiential Agency Kreate Gets Bought Out By Staffers

Leading experiential marketing agency, Kreate Australia is embarking on an exciting growth strategy following its purchase by three of the agency’s existing management team from its UK founder, Steve Evans.

Hurry! B&T 30 Under 30 Entries Closing Friday!
  • Advertising
  • Marketing
  • Media

Hurry! B&T 30 Under 30 Entries Closing Friday!

This is a clarion call for B&T 30 Under 30 entries, although it's probably more mariachi band than angelic harbinger.

by B&T Magazine

B&T Magazine
The Hit Network Chooses Comedian Tanya Hennessy To Host Weekend Breakfast
  • Media

The Hit Network Chooses Comedian Tanya Hennessy To Host Weekend Breakfast

Southern Cross Austereo’s Hit Network has announced that rising radio star and comedian Tanya Hennessy will take over hosting duties for its weekend breakfast slot in 2018. Hennessy will bring content to the airwaves each Saturday and Sunday morning from 7am to 9am with a regular rotation of guest co-hosts. The self-described talker, not walker […]

Straight Up PR Wins Five New Clients
  • Marketing

Straight Up PR Wins Five New Clients

Health, wellbeing and lifestyle PR agency Straight Up PR has welcomed Changing Habits, Unichi Wellness, enerGi, SleepX, and Healthie Hampers to its client portfolio. Straight Up PR’s projects will include bespoke PR services and influencer marketing packages specifically focusing on communications strategy and execution, media and influencer relations, PR launch events, product seeding and gifting, […]

March One Creates ‘Cheese For Change’ Fundraising Campaign For White Ribbon Australia
  • Advertising
  • Campaigns
  • Marketing

March One Creates ‘Cheese For Change’ Fundraising Campaign For White Ribbon Australia

Independent creative agency March One has developed a new fundraising event for White Ribbon Australia that turns a social moment into a social movement. Starting on Thursday 22 March and going until Sunday 25 March, Cheese for Change will ask Aussies to create a cheese platter that matters by gathering friends, family or co-workers together […]

Sixth Annual IGN Select Awards Winners Announced
  • Marketing

Sixth Annual IGN Select Awards Winners Announced

The winners of IGN Australia’s sixth annual Select Awards were revealed during a huge special event at the Australian National Maritime Museum in Sydney on Friday, February 16. Some 225 Media & Game Publishers alongside 320 IGN Community Gamers attended the annual event. 2017 was absolutely crammed with terrific games and several categories were extremely tightly-contested. The top […]

Meet Your Mentors For B&T Bootcamp 2018!
  • Advertising
  • Marketing
  • Media

Meet Your Mentors For B&T Bootcamp 2018!

When it comes to an industry "who's who", you'll find there won't be too much who-ing with this impressionable lot.

by B&T Magazine

B&T Magazine
ANZ Unveils Its 2018 GAYTMs
  • Marketing

ANZ Unveils Its 2018 GAYTMs

Mardi Gras is only weeks away and B&T has already hoisted the mirror ball and donned the hotpants to bring you this.