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TOP 100 - Power Players
by Mary Ellen Kuhn
Exclusive Research Project Ranks the 100 Most Powerful Confectionery Brands.
It’s a given that brands are important to candy and gum companies. But just how important?
Getting to the heart of that question is what Confectioner’s exclusive
Top 100 Power Brands study is all about.
The Power Brands ranking conducted for Confectioner by Intangible
Business LLC, an independent brand valuation company, systematically
evaluated top-selling candy and gum brands on eight criteria to arrive at
the Top 100 list. A panel of five confectionery industry experts provided
input for the study. (See sidebar titled, “The Methodology,”
for more details on how the Top 100 list was compiled.)
The Methodology
To conduct the Candy Power Brands study, Intangible
Business LLC, a brand valuation firm with offices in London and Milwaukee,
collected five years of historical sales data provided by Information
Resources Inc. for the leading 300 candy brands and top 100 gum brands. The
IRI data tracked sales for the brands in food, drug and mass (excluding
Wal-Mart) channels.
Next, Intangible Business organized data by year per
brand and combined data for varying volumes and brand extensions. For
example, all Snickers revenues were consolidated. This data was then
condensed into a master list of the top 175 candy and gum brands on the
basis of 2005 revenue. To determine the qualitative strength of the brands,
five confectionery industry experts scored each of the 175 brands on eight
measures of brand strength.
The measures included the following:
Share of Market – a
volume-based measure of market share;
Future Growth - projected
growth based on historical data and future trends;
Premium Price Positioning – a measure of a brand’s ability
to command a premium price;
Market Scope – number
of markets in which the brand has a significant presence;
Brand Awareness – a
combination of prompted and spontaneous awareness;
Brand Relevancy – a
capacity to relate to the brand and a propensity to purchase (i.e. how
likely a consumer is to want to purchase it);
Brand Heritage – a
brand’s longevity and a measure of how it is embedded in local
culture;
Brand Perception – loyalty
and how close a strong brand image is to a desire for ownership.
Each of the preceding eight measures was then averaged
individually and in aggregate to arrive at the overall brand score for each
of the Top 100.
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Brand valuation is a way of measuring a brand’s worth or value and, in particular, its ability to generate future income on the basis of historic performance coupled with future trends. It must be reported in financial statements during acquisitions and may be required in the case of litigation or to help monitor a company’s marketing initiatives, among many other applications, explains Elise Neils, Intangible Business managing director.
Neils and her Intangible Business colleague, Bradley
Sarna, developed the Power Brands study methodology for Confectioner, employing the same kinds
of tools they use when conducting brand valuation research for clients. The
study ranks the brands, but it stops short of assigning a specific value to
each, Neils explains, because the detailed financial data needed to do so
were not available for the large pool of candy and gum brands our panelists
evaluated.
Although sales figures were the starting point in this
study, a brand’s “power” ranking does not necessarily
correlate directly with its sales. As Sarna points out, “All of the
brands were evaluated on eight criteria. Factors such as relevancy and
heritage go a long way toward determining how a brand will rank.
“In other words,” he continues, “a
brand’s imagery, history and appeal to consumers are among the
important factors in establishing its ‘power.’”
Consider, for example, that Just Born’s iconic,
54-year-old Peeps brand is No. 27 on the Power Brands list, although it
comes it at No. 69 on the basis of sales tracked by Information Resources
Inc. in food, drug and mass (excluding Wal-Mart) channels. Another striking
example is Kraft’s Toblerone - No. 17 on the Power Brands
list, but No. 124 in sales in the IRI-tracked channels.
Feel the power!
Brand power is particularly important in the candy/gum
category compared with most other packaged goods segments, says Neils.
“There are very few industries where brands play such an important
role,” she emphasizes.
“Much of the value of confectionery companies
can be attributed to intangible assets - mainly brands,” Neils
continues, adding that candy/gum is one of the most profitable segments of
the consumer goods sector. Only beverages (alcoholic and soft drinks),
tobacco products and cleaning products are more profitable sectors, she
notes.
“Branded, publicly held candy companies
such as Hershey, Tootsie Roll and Wrigley consistently achieve double-digit
profit margins, well above the consumer goods average of 7 percent,”
Neils continues. “The presence of powerful and well known brands
within these companies contributes to each company’s high
profitability and strong market value.”
For a specific example of “the vast value
attributable to brands,” Neils cites Wm. Wrigley Jr. Co., which has a
market value of approximately $14.3 billion and net assets of about $2.2
billion, according to a Wrigley 10-Q report and NYSE 2006 Trading Summary
reported in The Wall Street Journal on Jan. 2, 2007.
Leading Power Brands by Projected Future Growth | |||
Rank | Brand | Future Growth Score | |
1 | Ice Breakers | 8.2 | |
2 | Lindt Lindor | 8.0 | |
3 | Reese’s Chocolate | 7.6 | |
4 | Ghirardelli | 7.4 | |
5 | Dove | 7.0 | |
6t | Orbit | 6.8 | |
6t | Hershey’s Special Dark | 6.8 | |
8t | Hershey’s Kisses | 6.4 | |
8t | Trident | 6.4 | |
10t | Hershey’s Chocolate | 6.2 | |
10t | Ferrero Rocher | 6.2 | |
t = Tie |
“This indicates that approximately $12.1 billion
of Wrigley’s market value is attributable to its intangible assets,
including Power Brands such as Altoids, Orbit Juicy Fruit and a dozen
others, also included in the Top 100 Power Brands list,” she
concludes.
Heard It Through the Red Vines Package
American Licorice’s Red Vines brand didn’t
make the cut for the Top 100 Power Brands listing. But if the list
were calculated regionally rather than on a national basis, chances are
excellent that Red Vines would indeed be ranked among the “power
players.”
West of the Rocky Mountains, Red Vines frequently
leads the pack in non-chocolate sales as calculated by Information
Resources Inc., reports Aaron Johnson, director of consumer marketing for
the company. But in many markets east of the Rockies, sales aren’t as
strong, which means that American Licorice must come to market with a mixed
bag of marketing tools. In the well-developed West Coast markets, the
emphasis is on marketing tactics that encourage consumers to increase
purchase, while in markets like the North Central region, where Red Vines
has started to establish a foothold, the focus is on building trial.
“Part of how I want to build brand loyalty is
that I want to rely on our existing consumers to be brand evangelists to
people who may not be so familiar [with the brand],” says Johnson.
“What I see my job as a marketer [to be] is to find ways to help
people who already love Red Vines to communicate with people who could love
Red Vines.”
To that end, American Licorice has sponsored contests
in which consumers share their stories about Red Vines. Winning entries are
printed on licorice trays; 160 stories have been printed thus far. Johnson
describes it in this way. “If you’re a new Red Vines user and
you don’t have a lot of emotional connection [to the brand], if you
see stories about their [other consumers’] connection, maybe in some
way, their stories can become your stories,” Johnson reflects.
Next, American Licorice will be printing
consumers’ drawings of some of their favorite Red Vines moments such
as the one shown here.
Passionate About Dove
Talk about an emotional connection! Margaret Asselin
Woods, marketing director for Masterfoods USA’s Dove chocolate brand,
says Dove lovers experience that and more as they relate to the brand.
Leading Power Brands by Brand Heritage | |||
Rank | Brand | Heritage Score | |
1t | M&M’s | 10.0 | |
1t | Hershey’s Chocolate | 10.0 | |
3 | Hershey’s Kisses | 9.8 | |
4 | Reese’s Chocolate | 9.6 | |
5 | Trident | 9.4 | |
6t | Snickers | 9.2 | |
6t | LifeSavers | 9.2 | |
6t | Marshmallow Peeps | 9.2 | |
6t | Tootsie Roll Pops | 9.2 | |
10t | Altoids | 9.0 | |
10t | Nestlé Raisinets | 9.0 | |
10t | Nestlé Chocolate | 9.0 | |
10t | Wrigley’s Spearmint | 9.0 | |
10t | Wrigley’s Double Mint | 9.0 | |
10t | Tootsie Roll | 9.0 | |
t = Tie |
Leading Power Brands by Brand Perception | |||
Rank | Brand | Brand Perception Score | |
1 | M&M’s | 9.8 | |
2 | Altoids | 9.6 | |
3t | Hershey’s Chocolate | 9.4 | |
3t | Hershey’s Kisses | 9.4 | |
3t | Reese’s Chocolate | 9.4 | |
6t | Snickers | 9.2 | |
6t | Marshmallow Peeps | 9.2 | |
6t | Jelly Belly | 9.2 | |
6t | Lindt Lindor | 9.2 | |
10t | Wrigley’s Spearmint | 9.0 | |
10t | Toblerone | 9.0 | |
10t | Ghirardelli | 9.0 | |
10t | Dove | 9.0 | |
t = Tie |
Leading Power Brands by Brand Awareness | |||
Rank | Brand | Brand Awareness Score | |
1t | M&M’s | 10.0 | |
1t | Hershey’s Chocolate | 10.0 | |
1t | Hershey’s Kisses | 10.0 | |
4t | Snickers | 9.8 | |
4t | Reese’s Chocolate | 9.8 | |
4t | Trident | 9.8 | |
7t | LifeSavers | 9.4 | |
7t | Wrigley’s Double Mint | 9.4 | |
7t | Nestlé Chocolate | 9.4 | |
10t | Kit Kat | 9.2 | |
10t | Wrigley’s Juicyfruit | 9.2 | |
t = Tie |
Leading Power Brands by Premium Price Positioning | |||
Rank | Brand | Premieum Price Positioning Score | |
1t | Lindt Lindor | 8.0 | |
1t | Ferrero Rocher | 8.0 | |
3 | Brown & Haley Almond Roca | 7.8 | |
4t | Ghirardelli | 7.6 | |
4t | Altoids | 7.6 | |
6 | Listerine PocketPaks | 7.2 | |
7t | Dove | 6.8 | |
7t | Altoids | 6.8 | |
7t | Toblerone | 6.8 | |
10t | After Eight Chocolate | 6.6 | |
10t | Mauna Loa | 6.6 | |
t = Tie |
“Most consumers love chocolate,” says
Woods, “but our consumers have an affair with Dove. Once people try
it, they tend to become loyal customers. Dove is much more than a
chocolate; it’s a relationship,” she maintains.
Reinforcing consumers’ connection to Dove is its
ready availability in mainstream channels. “We’ve found that
once people taste Dove, they know the chocolate is superior in taste and
silky smooth texture,” says Woods. “The fact that they can find
that superior chocolate in their mass store of choice for a reasonable
price becomes exciting and reinforces the brand for them.”
Leading Power Brands by Market Scope | |||
Rank | Brand | Market Scope Score | |
1t | M&M’s | 10.0 | |
1t | Hershey’s Chocolate | 10.0 | |
3 | Snickers | 9.8 | |
4 | Reese’s Chocolate | 9.6 | |
5t | Hershey’s Kisses | 9.4 | |
5t | LifeSavers | 9.4 | |
7t | Kit Kat | 9.2 | |
7t | Wrigley’s Double Mint | 9.2 | |
7t | Wrigley’s Spearmint | 9.2 | |
10t | Trident | 9.0 | |
10t | Nestlé Chocolate | 9.0 | |
10t | Wrigley’s Juicyfruit | 9.0 | |
t = Tie |
The brand’s advertising tagline, “My
Moment with Dove,” was designed to allow consumers “to
reconnect with themselves, even if just for a moment,” says Woods.
The Power of Peeps
Matt Petronio, vice president of customer and brand
development for Peeps maker, Just Born, is another marketer who talks about
brand loyalty in terms of relationships.
“The success of a brand is determined ultimately
by consumers, and the strength of the relationship that develops between
the two [the consumer and the brand],” says Petronio.
“Having a strong brand is important for success
in the candy category because it satisfies two important constituents:
retailers and consumers,” Petronio continues. “For retailers, a
strong brand will generate the sales/profit they need because there is
confidence that consumers will pull them off their shelves. For consumers,
a strong candy brand gives them the confidence in their decision to
purchase the candy, because they know their ‘want’ will be
satisfied.
“Critical to continued brand growth, though, is
the ability to consistently respond to and deliver against the evolving
requirements of both the retailer and the consumer,” he adds.
Here’s a Brand with Plenty of Heart
It’s hard not to love a Hershey’s Kiss;
after all, this 100-year-old brand is all about love and affection. Not
surprisingly, the company is capitalizing on that with its marketing
communications initiatives, reports spokesman Kirk Saville. “The
‘Kiss Someone,’ tagline is at the heart of the new
Hershey’s Kisses television and print advertising campaigns,”
says Saville.
The venerable Hershey’s Kisses brand marks its
100th year in 2007, so it’s hardly surprising that it scores high on
heritage in the Power Brands study. “Consumers’ passion for the
brand is a result of the personal connection the brand has made for 100
years,” says Saville.
There are seven Hershey’s Kisses varieties
available every day. Watch for limited edition Hershey’s Kisses with
Coconut Crème, Hershey’s Kisses with Vanilla Crème,
Hershey’s Kisses with Candy Cane Bits and Hershey’s Kisses with
Mint Truffle in the months ahead. Also on tap for the brand’s 100th
anniversary year is a Hershey’s Kisses birthday celebration held
— where else but? — Hershey, Pa., “the sweetest place on
earth.”
Pop Culture Icon Pez Keeps It Current
For a candy novelty product to stay relevant to U.S.
consumers for 55 years is no small feat, but Pez has achieved it by
consistently delivering value and fun, says Joseph Vittoria, CEO of Pez
Candy Inc.
Of course, the collectibility factor hasn’t
hurt. Classic Pez dispensers can sell for tens of thousands of dollars. And
Vittoria and his team work hard to home in on the hottest collectible
prospects each year.
Last year’s Orange County Chopper Pez items were
red hot thanks to the popularity of the cable television series and
Pez’s creative promotional efforts.
“That’s how we’re continuing the
relevancy,” says Vittoria. “We’re keeping Pez closely
associated with pop culture.”
What’s ahead for this year? One hint: If
you’re an Elvis fan, this collectible will be for you!
Beans That Everybody Loves
No one at Jelly Belly takes the brand’s powerful
appeal for granted. The company’s marketers are intently focused on
how consumers perceive the brand as well as how to ensure its continuing
relevance, says Lance Jensen, vice president of marketing.
The perception among consumers is that Jelly Belly
jellybeans are of high quality and feature authentic flavors, Jensen
continues, adding that, “we work hard to live up to that.”
As for relevance, he continues, “One of the most
popular questions here in marketing is, ‘Does this activity or
program increase the relevancy of the brand?’”
So what’s Jensen’s take on the essence of
Jelly Belly? “At the heart of the brand is flavor and fun and a
little bit of magic dust from the marketing guys,” he says.
Leading Power Brands by Brand Relevancy | |||
Rank | Brand | Relevancy Score | |
1 | M&M’s | 9.6 | |
2t | Hershey’s Chocolate | 9.2 | |
2t | Snickers | 9.2 | |
2t | Trident | 9.2 | |
5t | Hershey’s Kisses | 9.0 | |
5t | Orbit | 9.0 | |
5t | Toblerone | 9.0 | |
5t | Brown & Haley Almond Roca | 9.0 | |
9 | Jelly Belly | 8.8 | |
10t | Reese’s Chocolate | 8.4 | |
10t | Kit Kat | 8.4 | |
10t | Altoids | 8.4 | |
10t | Dentyne Ice | 8.4 | |
10t | Ghirardelli | 8.4 | |
10t | Lindt Lindor | 8.4 | |
t = Tie |
A Triangular Treat
Kraft’s Toblerone brand has had limited
distribution in the United States for about 30 years, which makes its No.
17 ranking on the list particularly impressive.
Worldwide, however, its scope is broad; the brand is
distributed in 120 countries, says Laurie Guzzinati, associate director,
corporate and legal affairs, Kraft Foods. So it’s not surprising that
Toblerone is well known for the quality of its smooth, Swiss milk chocolate
and distinctive honey nougat, particularly among consumers who have
traveled internationally. Soon, however, Toblerone’s U.S. presence
may be even stronger, says Guzzinati, because the company has “plans
in place to continue to build distribution and to provide more consumers
with the opportunity to try Toblerone.”
The marketing tagline, “Lose yourself in the
Toblerone triangle,” is designed to work on several levels. On the
literal level, it references the triangular shape of the chocolate and the
packaging. Metaphorically, it focuses on savoring the Toblerone taste
experience.
Want to know more?
For more information on the Candy Power Brand
research, contact Brad Sarna or Elise Neils at Intangible Business LLC,
(414) 224-0500. You can learn more about the company at
www.intangiblebusiness.com.