$300bn at stake as plain packaging threatens the beverage industry

Modesto Morganelli
Dicembre 7, 2017

"To apply plain packaging in the food and drink sector would render some of the world's most iconic brands unrecognisable, changing the look of household cupboards and supermarket shelves forever, and result in astronomical losses for the holding companies", said David Haigh, CEO of Brand Finance.

The move to plain packaging, the report says, would limit the effectiveness of brands as marketing tools, and make it far more hard for companies to differentiate their products. In addition to hurting the bottom line of the companies themselves, it would also have a strong effect on the advertising and PR industries that aid in the creation and implementation of brand strategies.

Plain packaging policies could lead eight major food and beverage companies to lose $187 billion in sales, according to a new study by business valuation consultancy Brand Finance.

David Haigh, chief executive of Brand Finance, said: "To apply plain packaging in the food and drink sector would render some of the world's most iconic brands unrecognisable, changing the look of household cupboards and supermarket shelves forever, and result in astronomical losses for the holding companies". "Plain packaging also means losses in the creative industries, including design and advertising services".

"Predicted loss of brand contribution to companies at risk is only the tip of the iceberg". That would account for a 24 percent loss in total enterprise value for Coca-Cola and a 27 percent dip for PepsiCo.

In recent years, several countries have introduced plain packaging for cigarettes and tobacco products to discourage consumers from smoking.

The impact to major alcohol and sugary drink brands is significant, pointing towards an estimated loss of US$293bn for the beverage industry globally.

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