Brand power

Coca-Cola, Longbeach and Winfield were once again the three leading Australian grocery brands, according to marketing information company ACNielsen's 13th biennial Top 100 Brands Report. The report also revealed that these super brands were now bigger than ever, having each broken through the $750 million barrier for the first time.

Coca-Cola retained its position as Australian brand leader for the thirteenth consecutive year, driven primarily by strong performance by the traditional Diet Coke sub-brand. New product development has also been an important driver of growth, with new flavour variants including Coca-Cola Lime, Diet Coke Lime and Diet Coke Vanilla contributing about a third of the absolute dollar growth of the entire Coca-Cola brand over the last two years.

The top 100 accounted for 45% of total absolute dollar growth recorded by the packaged grocery sector in the past two years. The top 100 brands were worth a total of $14.1 billion in 2005, up 12% from $12.6 billion in 2003, and accounted for 38% of total packaged grocery, up from 37% in 2003.

The entry bar for a top 100 brand was $62 million, up from $55 million in 2003, with seven new brands entering the top 100 in 2005, including VIP chilled/frozen petfood, Philadelphia Cheese, McCain Frozen Meals, Primo Smallgoods, Champion Ruby RYO Tobacco, Bird's Eye Frozen Fish and Energizer Batteries, with six of the seven brands enjoying more than 20% growth over the past two years.

Brands which had achieved the most significant increase in rank versus 2003 were Quilton Toilet Tissue (up 37 places); followed by Nabsico Biscuits (up 35 places); and Hans Smallgoods (up 24 places).

Nearly half (48) of the 2005 top 100 brands were owned by just 10 manufacturers, and 15 manufacturers owned an astounding 63 brands.

"The Top 100 Brands Report provides clear indication that big brands are instrumental in driving the performance of the grocery channel," says Anton van den Berg, director, Client Service, ACNielsen. "And depending on the future success of the private label, it is likely that the dominance of larger manufacturers will increase over time."

The ACNielsen report also includes a top 25 umbrella brand ranking, accommodating brands which operate in a variety of categories, none of which would necessarily qualify as a top 100 brand (see methodology).

While Arnott's, Cadbury and Kellogg remained the top-selling umbrella brands, the composition of the top 25 compared to 2003 was changed with the entry of Smith's, Mainland and Tip Top.

The most significant shift in rank within the top 25 umbrella brands was Kleenex's entry into the top 10 at number eight, from 13 in 2003. This shift was driven by the rebranding of its main toilet tissue brand to Kleenex Cottonelle.

The top 25 umbrella brands included four Australian suppliers, including Dairy Farmers, Golden Circle, Sanitarium and Murray Goulburn. With the exception of Sanitarium, these manufacturers all slipped one to two positions in rank versus 2003. The top 25 also included new entrant Mainland, owned by New Zealand supplier Fonterra Brands (previously Bonland Dairies).

"Today's top 100 brands are where they are because of years of investment in marketing and brand building," van den Berg notes. "Sales and promotional activity may provide the current cashflow, but marketing investment - advertising, new product development, packaging, product quality - provides for future cashflow. Boards are increasingly recognising the ROI [return on investment] of their marketing spend, although more effort is needed to measure marketing spend effectiveness."

Methodology

The Top 100 Brands Report is now in its 13th year and while ACNielsen has made every effort to ensure the data in this analysis is accurate - the company cannot guarantee that all errors or omissions have been corrected, due to the constant shifting of the marketplace and the magnitude of the analysis. Comparisons with the 2003 compilation should be treated with some care and consideration should be given to brand and definitional changes.

Definitions

As in previous years, ACNielsen has compiled two lists. The top 100 brands list defines a brand within a single category (eg, Colgate toothpaste). Range extensions under the same name are included: Diet Coke, for example, is included in the Coca-Cola brand.

The top 25 umbrella brands apply to brand names that cross grocery categories (eg, Heinz baked beans/spaghetti and soup), or where sub-brands can be viewed as brand names in their own right. An example of this is Arnott's, which has individual entries in the entries in the top 100 (eg, Shapes and Tim Tam), but the Arnott's umbrella brand is included in the top 25 list.

Coverage

The top 100 brands and top 25 umbrella brands lists are based on annual sales through supermarkets and grocery stores for the year ending 3 July 2005. For direct-delivery categories such as bread and milk, the data is projected for warehouse accounts.

The coverage is national (including Tasmania) and covers all grocery accounts. The non-grocery channels not covered are the route trade (milk bars, newsagents, service stations), convenience stores, mass merchandisers (Kmart, Big W, Target), department stores, food service, vending and exports.