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A study released last week showcases the strength quick-service restaurant brands have on a global scale.
The 7th annual BrandZ Top 100 Most Valuable Global Brands study ranked Apple as the No. 1 brand overall, and included heavy representation from the technology segment in general, with IBM and Google also leading the list. McDonald's came in at No. 4.
The study was commissioned by WPP and conducted by Millward Brown Optimor and ranked the world's most valuable brands based on numerous factors such as dollar value, buzz levels, analyst reports, reputation, relevance and more.
The QSR segment is one of 13 included in the report, available here.
QSRs drive sales through menu innovations
The report attributes QSR sales through the slow economy to the breakfast daypart expansion – mentioning examples such as Taco Bell's First Meal launch, Wendy's foray into the morning space and McDonald's continued success with breakfast.
Additionally, experiments with the fledgling snack daypart created a buzz, such as Subway's café prototype and McDonald's baked goods now in test.
"I think the key issue this year is the breakfast daypart. We're starting to see a bit of a change happen as a consequence of that – some revenue pick up," said Philip Herr, senior vice president of Corporate Intelligence at Millward Brown.
The BrandZ report cites Starbucks' success as the impetus behind QSR breakfast and coffee enhancements. But innovation in the segment extended beyond daypart expansion.
"Pressured to hold prices while commodity prices increased, the QSRs also continued to improve their menus, décor and service to draw diners from the somewhat more upscale family restaurant segment," the report said.
Unemployment hits some chains
The BrandZ report pointed out the impact high unemployment had on the QSR segment, particularly high unemployment of young men. Because of this jobless trend, Burger King was notably affected, and fell into the No. 3 burger spot behind McDonald's and Wendy's, respectively. It marked the first time in the history of these chains that Burger King was not No. 2.
Meanwhile, McDonald's further solidified its top spot, benefiting from a successful "barbell" strategy in which the menu offers both bargain and premium items to broaden the customer base.
Domino's Pizza's strategy also notably catered to value-seeking customers with its offer of two special pizzas for under $10.
BRICs drive growth
Most of the 13 segments in the BrandZ report benefited from the fast-growing BRIC markets of Brazil, Russia, India and China. In 2006, the Top 100 mentioned only China. Now, growing markets account for one-in-five brands in the 2012 Top 100.
The QSR segment, in particular, is getting a boost from the BRIC markets and their populations that are intrigued with Western brands. Brazil's expanding middle class is driving growth, while Russia's consumers are craving brands over institutions as the tides continue to turn in the country. India's diverse population bodes well for innovative companies, and Chinese brands benefit from improved quality.
Yum! Brands is clearly positioned to take advantage of these emerging markets. Same-store sales at the company grew 19 percent in China last year, versus 1 percent in the U.S.
Yum! opened 656 restaurants in China during 2011, and 905 in other international locations. In October, Starbucks opened its 500th store in China. Starbucks and Dunkin' Donuts have since planted flags in India, where McDonald's also plans to accelerate growth.
Most valuable brands
Based on all of the data and research conducted, McDonald's ranked No. 4 overall on the BrandZ list – behind Apple, IBM and Google – with a brand value of $95.2 billion. Last year, the Golden Arches also ranked fourth. Coca-Cola was the only other foodservice company in the top 10, ranking sixth.
"Brands help businesses create competitive differentiation, command a price premium and become more resilient to crises or economic turbulence. This year, those businesses that leveraged technology, focused on the customer experience or boosted control of their brands thrived," said David Roth of WPP.
QSRs were represented in other top sub-lists in the report, as well. For the Top 20 "Risers," companies that experienced growth in value from last year, Starbucks ranked No. 5 with 43 percent brand growth.
Domino's Pizza was No. 11 with 29 percent brand growth, and Tim Hortons was No. 15, with 25 percent growth.
Facebook was the overall top riser, with 74 percent brand growth over last year.
The QSR segment's top 10 is as follows:
Other report takeaways
Read more about trends and statistics.
Topics: Business Strategy and Profitability , Domino's Pizza , Food & Beverage , Franchising & Growth , Marketing / Branding / Promotion , Online / Mobile / Social , Operations Management , Trends / Statistics
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