Starbucks And McDonald's Are Top The World's Most Valuable Food Chains
Starbucks and McDonald's were ranked the most valuable chain restaurants for 2023. According to the "Restaurants 25" report from consultancy group Brand Finance, these two food giants handily held the first two spots for the seventh year running despite challenges due to the Covid-19 pandemic, supply chain constraints, and inflation. Brand Finance looks at a number of factors to determine the overall value and strength of the brand.
Even though these two brands are clearly the front runners when compared to other restaurant chains in the top five like Kentucky Fried Chicken, Domino's, and Subway, there is not much competition between the two. Since 2022, Starbucks' value increased by 17% to $53.4 billion, further widening the gap between the coffee powerhouse and its golden-arched rival. McDonald's value actually decreased by 7% to $36.9 billion.
McDonald's, a restaurant chain based on low-priced offerings, really struggled with increased costs along its supply chain. The chain opted to up prices on popular items, like Big Macs and fries, to offset those higher commodity costs and inflation-related price hikes. While this did bolster earnings, the brand value suffered. Consumers place a lot of importance on McDonald's being an affordable brand.
Why is Starbucks so successful?
Brand Finance found that one of the factors driving Starbucks' success is the consumer perception of sustainability. The consultancy group found that, of the restaurants studied, Starbucks had the highest score for sustainability perception. This does not mean that simply changing Starbucks' famous cups or offering more plant-based options made the coffee chain the most sustainable restaurant chain. This metric solely reflects that customers perceive Starbucks to place a high importance on sustainability.
Additionally, Starbucks doubled down on customizable cold drinks. Of all beverages sold at Starbucks locations in the United States, 75% were chilled. This represents a huge growth opportunity for Starbucks in its international market. During an earnings call in August 2022, founder Howard D. Schultz spoke to this unique opportunity saying that the option for consumers to create highly customizable cold drinks not only broadens the time of day that a customer would think to go to Starbucks, it also is "creating opportunities for customers' self-expression [and] deepens our connection to customers" (via Food Business News).
The value of Starbucks is 30% higher than before the pandemic, which shows that Starbucks' plan to reinvent itself really seemed to work. This multi-dimensional plan for fiscal years 2023 through 2025 includes placing renewed attention on customer experience, prioritizing employees, reinforcing leadership, expanding the number of stores, and keeping costs in check. With Starbucks already demonstrating huge growth potential, who knows how much higher the coffee powerhouse will soar by its next fiscal year?