On September 27, 2023, the 2nd New Investment Expo 2023 and the 17th Frost & Sullivan Global Growth, Innovation and Leadership Summit opened grandly in Shanghai.
At the meeting, Frost & Sullivan officially released the 'FSBVFrost & Sullivan Brand Value Model'. Starting from ten dimensions including macro-industry and niche tracks, brand background, brand innovation, brand quality, brand social responsibility, etc., FSBV helps enterprises conduct quantitative diagnosis of their brand value, provides long-term annual tracking and diagnostic guidance, builds and strengthens the enterprise's influence at the consumer end, and assists enterprises in achieving business expansion and growth.
Currently, the model has been successfully implemented in the catering industry. It creates an assessment of catering brand value through the 'Catering Brand Firepower Index', comprehensively evaluating the competitiveness of Chinese catering brands and reflecting the market position of benchmark brands in niche segments. It has been confirmed that Frost & Sullivan has assessed Dragon Hotpot as a 'brand worth fifty billion'.
Wang Chenhui, Managing Partner and Executive Vice President of Frost & Sullivan Greater China, Co-founder and President of LeadLeo
Yang Xiaocheng, Partner and Managing Director of Frost & Sullivan Greater China, Co-founder and CEO of LeadLeo
Research on the Brand Value of Food and Beverage Brands: Frost & Sullivan×LeadLeo
The research on the value of catering brands by Frost & Sullivan and LeadLeo mainly includes: 1. The firepower index of catering brands; 2. Two core modules for evaluating catering brand value, ranging from brand competitiveness assessment to economic value calculation, providing an in-depth insight into Chinese catering brands.
Brand value is a comprehensive indicator that measures a company's social influence and industry competitiveness, reflecting consumers' perception, sentiment, and loyalty to the brand. Brand value is more often manifested as the contribution of the brand to the company's economic value, that is, its impact on the company's market share, sales, and profits. This is also the basis for Frost & Sullivan and LeadLeo's measurement of catering brand value.
Catering Brand firepower index
To comprehensively evaluate the competitiveness of Chinese catering brands in all aspects and reflect the market position of benchmark brands in niche segments, the Catering Brand Firepower Index was developed.
We selected 30 leading brands across sub-sectors and used the Frost & Sullivan Catering Brands' firepower index evaluation system to comprehensively assess the competitiveness of each brand, generatingCatering Brand firepower index databaseBased on the firepower index ranking, identify industry benchmarks for sub-sectors “Powerful Brand with All-round Firepower"or"Top Brands by Single Firepower Value"“.
Specifically, the catering brand firepower value index evaluation system is divided into two versions: the Basic Edition and the Pro Edition, fully considering the development of the catering industry. It selects key dimensions and indicators to provide a comprehensive insight into the brand. There are a total of 8 first-level evaluation dimensions, which are: track potential, market performance, market growth, menu management, store operation, consumer experience, brand innovation, and social responsibility. The Basic Edition evaluation system is further subdivided into a total of 32 third-level indicators, with a total score of 400 points; the Pro Edition evaluation system is further subdivided into a total of 61 third-level indicators, with a total score of 700 points.
The top ten catering brands across various sub-sectors can receive the title of 'All-round firepower brand'; catering brands that rank among the top ten in each primary evaluation item can receive the title of 'Single-item firepower TOP brand'.
Evaluation of catering brand value
The evaluation of catering brand value measures the absolute value of a brand's actual economic value and uses a brand value pyramid to visually represent the tiering of brands within a sector, showing their market position.
Based on the absolute value of catering brand value, we rank sub-sectors into a brand value pyramid, which can be divided into brands with millions, tens of millions, hundreds of millions, billions, and even trillions of value.
FSBV Catering Brand Value Assessment Method
To scientifically measure the amount of currency corresponding to brand value, ensure a more accurate reflection of the economic value of the brand, and gauge the economic benefits brought by the brand to the enterprise, we have referenced the general methods of corporate valuation to some extent and adopted the brand cash flow regression method to measure and calculate brand value.
In summarizing the entire set of measurement models, the Brand Firepower Index, the Brand Firepower Intensity Coefficient, and the Frost & Sullivan BV discount rate are three key variable indicators. Based on in-depth research into segmented market segments and catering brands, we will scientifically transform the catering brand firepower index into a Brand Firepower Intensity Coefficient that aligns with market conditions. Then, considering the Brand Firepower Intensity Coefficient and the average return on assets of the industry where the brand operates, we will determine the brand value discount rate.
Benchmarking the Value of Catering Brands: Dulongyi
Through the calculation of the index evaluation system and model, the firepower value index of Sichuan-Chongqing hotpot brand Dalongyi is 599, with a brand value reaching 52 billion yuan, making it the 'fully capable firepower brand' of Sichuan-Chongqing hotpot.
