The American Companies With the Most Valuable Brands


By Douglas A. McIntyre, Charles B. Stockdale, Michael B. Sauter,24/7 Wall St.

24/7 Wall St. has done an analysis of the largest companies in the United States based on the size of their portfolios of major consumer brands. Many of these brands are worth billions of dollars if brand valuation firms are correct. All certainly generate tremendous sales. The Procter & Gamble brand portfolio creates more than $40 billion in revenue each year. P&G has a market value of $186 billion. Coca-Cola, another company on the list, has a market value of $155 billion. The success of these corporations is based almost entirely on their brands.

Most of the corporations on this list have flagship products that are decades old and some were first introduced before 1900. None of the companies on the list is a one-trick pony. Brand diversification has been one of the most successful American business strategies over the last several decades. Mars has a large array of chocolate and pet food products. Kellogg has dozens of cereals. Each company used manufacturing, marketing, and distribution expertise as leverage for commodities purchases and product placements in retail outlets.

Some of the corporations on the 24/7 Wall St. list have even gone beyond diversification within their core businesses. Pepsi sells soft drinks, bottled water and Frito Lay snacks. That, in theory, gives the company revenue diversification which helps create a steady flow of revenue. A slowdown in beverage sales or an increase of the price of sugar used in its sodas may be offset by success in its grains-based snacks operation. This 24/7 Wall St. examination of brands is as much about brand management and aggregation as it is about brand value and earnings.

The list was created after our researchers looked at over 100 large American companies which rely heavily on sales of branded products to the general public. The firms reviewed ranged from magazine publishing houses to broadcast companies to suppliers of over-the-counter and prescription drugs. Each of the companies that made the list has more than 25 major brands. Procter & Gamble, at the top of the list, has nearly 50.

The reason that these firms are among the largest companies in the U.S., and in many cases, the world, is that they have been intelligent and aggressive brands stewards which have maintained and acquired brands as well as any other firms on earth.

1. Mars

> Number of Major Brands:

> Industry: Confectionery, Pet Food, Other
> Most Well-Known Brands: M&M's, Snickers, Orbit
> Year Founded: 1920

Mars is known for itsextensive control in the confectionery industry. Along with numerous other products, the company makes M&M's, the top selling candy in the United States. Mars has diversified beyond candy, however, which may turn out to be a strategically critical decision. It has a large division that sells pet food, including the popular Pedigree brand. Mars also owns Uncle Ben's, the popular line of instant rice products. The prices of sugar and chocolate have risen sharply in the last year, which almost certainly pressures the margins for products like M&M's and Snickers.

2. Procter & Gamble

> Number of Major Brands:

> Industry: Beauty & Grooming, Household Care Products
> Most Well-Known Brands: Duracell, CoverGirl, Gillette, Pampers
> Year Founded: 1837

Proctor & Gamble may be the most diversified company in the world with regards to brands. One of the primary reasons is the massive gamble it made in 2005 when it bought men's products company Gillette for $57 billion. Despite its large portfolio of brands across several sectors, commodities prices will affect products like Charmin and Bounty. P&G's sales last year were $41 billion ,which means that it can pressure suppliers to prices down and on retailers to give its products premium displays. According to the Procter & Gamble site, the company owns 23 separate brands than generate over $1 billion each year. In the 1920's the company, which was then known primarily for its soap products, sponsored so many radio dramas that they eventually became known as "soap operas." The company's other major brands include Pringles, Old Spice, and Dove.

3. Johnson & Johnson

> Number of Major Brands:

> Industry: Cosmetics, Health Care, Pharmaceutical
> Most Well-Known Brands: Band-Aid, Tylenol
> Year Founded: 1886

Johnson & Johnson produces a multitude of popular, everyday products under brands such as Band-Aid, Johnson's, Tylenol, and Listerine. Johnson & Johnson's major challenge is that the reputation of some of its brands has been severely damaged recently and sales of these products have plummeted. The most widely publicized cases of this involved nonprescription drugs such as Motrin and Children's Tylenol. Media reports say that there have been 22 J&J product recalls in the last 19 months. The most recent was epilepsy drug Topamax. J&J has the advantage of a significant presence in a number of non-consumer businesses which include medical devices.

4. PepsiCo

> Number of Major Brands:

> Industry: Beverages, Snacks, Food Products
> Most Well-Known Brands: Pepsi, Frito-Lay, Gatorade
> Year Founded: 1965

Pepsi, like many other companies which have multiple brands diversified beyond its core soft drink business. In 1965, Pepsi merged with Frito-Lay. It bought Tropicana in 1998 and Gatorade in 2001. The company now has a large portfolio of wheat-based products to balance its sugar-based brands. Unfortunately, wheat prices are up along with the price of sugar, so Pepsi will need to either raise prices or face margin compression. Under its wide range of brands, Pepsi markets Quaker Oats, Rice-a-Roni, SunChips, and Mountain Dew. Last year, the company had at least 19 products that netted more than $1 billion in sales.

5. Kraft Foods

> Number of Major Brands:

> Industry: Confectionery, Food, and Beverages
> Most Well-Known Brands: Nabisco, Oreo, Maxwell House
> Year Founded: 1903

Kraft is the world's second largest food company and is owner of top selling brands such as Oreo, Nabisco, Oscar Meyer, and Maxwell House. The company made a large and controversial buyout when it took over Cadbury last year for almost $20 billion. Several large Kraft shareholders such as Warren Buffett were not happy about the deal. It will be several years before Kraft's earnings show whether the merger was a good idea. Kraft has created a number of ways to market its products which are unique and should keep sales strong despite rising costs. A great deal of Kraft's advertising in based on the use of its products in recipes, as ways to save money, and as avenues to better health.

6. The Coca-Cola Company

> Number of Major Brands:

> Industry: Beverage
> Most Well-Known Brands: Coca-Cola, Sprite, Minute Maid
> Year Founded: 1892

According to the website The company sells more than 3,500 different beverages in 200 countries, selling 1.7 billion beverages each day in 2010. Vitamin Water, Fanta, A&W, Dasani, and Powerade.

Coke, like Pepsi, made the decision years ago that it was foolish to rely on one type of product -- soft drinks. The better strategy was brand diversification. It allows Coke to use its global manufacturing, marketing, and distribution levels across dozens of products. This infrastructure is one that virtually no other company can replicate. Coke's diversification has been more in the beverage business than Pepsi's has been Coke has added Fanta, Sprite, Powerade, and processed juices like Minute Maid. The manufacturing and transportation of these is closer to a carbonated drink like Coke. In theory, this saves money on redundant systems. It also concentrates Coke's products more narrowly than Pepsi's which currently makes Coke's earnings hostage to sugar prices.

7. General Mills

> Number of Major Brands:

> Industry: Cereal/Other Food Products
> Most Well-Known Brands: Cheerios, Pillsbury, Betty Crocker
> Year Founded: 1866

In the 1940's, General Mills became the sponsor for the radio program The Lone Ranger, drawing many young fans to its breakfast cereals. Today, the company markets popular brands such as Green Giant, Nature Valley, Fiber One, Hamburger Helper, Haagen-Daazs, and Wheaties. General Mills and rival Kellogg's have to diversity narrowly compared to Johnson & Johnson or P&G. The great majority of its major brands are grains-based–mostly cereals and instant foods. The rare exceptions are Yoplait and Haagen-Daazs. These rely much more heavily on dairy products. General Mills has to hedge against wheat, oats and corn prices. It also has to hope that consumer will accept prices increases for its products or be fooled when the company decreases the sizes of its packages and keeps prices the same.

8. ConAgra Foods

> Number of Major Brands:

> Industry: Food/Cooking Products
> Most Well-Known Brands: Chef Boyardee, Pam, Orville Redenbacher's
> Year Founded: 1919 as Nebraska Consolidated Mills, 1971 as ConAgra Foods

ConAgra Foods produces a wide variety of food products, including Chef Boyardee, Orville Redenbacher's, Hunt's, and Healthy Choice. According to the company, its products are found in 97% of American households. ConAgra Mills is one of the largest sources of grains and flour for other consumer-centric companies. ConAgra has intelligently used its manufacturing, refining, and distribution expertise to build its own brand portfolio.

9. Kellogg's

> Number of Major Brands:

> Industry: Cereal
> Most Well-Known Brands: Corn Flakes, Rice Krispies, Raisin Bran
> Year Founded: 1906

Along with General Mills, Kellogg's is one of America's biggest producer of cereal and other breakfast products, featuring 5 of the top 7 cereals sold in the country. Besides its well-known breakfast cereals, which include Raisin Bran, Corn Flakes, and Rice Krispies, the company also makes snacks like Cheez-its, 100 Calorie Bites, Town House and Club Crackers. Kellogg's challenge has been to move beyond the market for breakfast products, and its success has been very modest. Kellogg's Corn Flakes is a major brand. Famous Amos cookies, a product usually consumed later in the day, is not. If Kellogg has made any mistake, it has been to limit most of its revenue to products used between 6 a.m. and 9 a.m.

10. Dr Pepper Snapple Group

> Number of Major Brands:

> Industry: Beverage
> Most Well-Known Brands: 7-Up, Dr. Pepper, Schweppes
> Year Founded: 2008

Along with Dr Pepper and Snapple, the Dr Pepper Snapple Group produces such top beverages as 7 Up, Canada Dry, Hawaiian Punch, and Schweppes. Dr Pepper Snapple is the only company on the list which was built by private equity firms from Wall St. Snapple and other related brands were sold to Cadbury Schweppes in 2000. It purchased Dr Pepper/7 Up in 2006. Cadbury sold the combined businesses to the public in 2008. The firm's portfolio is weak in terms of product concentration. Almost all of its products are beverages, and none are first tier in terms of sales like Coke, Diet Coke, Pepsi or Diet Pepsi. 7 Up is as close to a flagship brand as the company has.