January 13, 2022

Summary

Consumer Packaged Goods companies have a YDC Data Monetization Index (DMI) in the range of 9.38% to 28.82% with an average of 11.84%. The YDC DMI calculation for The Coca-Cola Company is based on a valuation of loyalty and supply chain data. For all other companies, the DMI is driven only by supply chain data because we did not have access to good information about loyalty membership. 

A higher YDC DMI is generally preferable across companies and industries. By way of reference, internet companies have a higher YDC DMI because most of their enterprise value is derived from data. For example, Google’s DMI is 93 percent as we will discuss in a later blog.

Defintions

• YDC Data Monetization Index (DMI) = Data Valuation / Enterprise Value
  
• Data Valuation = Supply Chain Data Valuation + Loyalty Data Valuation + Product Data Valuation + Employee Data Valuation + Real Estate Data Valuation + Other Asset Valuation 

• Enterprise Value =  Equity Value + Long Term Debt – Cash, a key metric used in the investment community

Methodology

The YDC team recently published a YDC DMI for major Consumer Packaged Goods companies in the United States. Here is an example for The Coca-Cola Company along with a benchmark that includes other companies in the industry.

The data valuation is based on research which indicates that better supply chain visibility can improve revenues by 11.7%. The data valuation for The Coca-Cola Company also includes the valuation of their more than 21 million loyalty members. We excluded loyalty data for the other companies because we did not have access to good information about member counts. 

The total value of data will likely be higher once additional datasets relating to product, employees and real estate are included. Going forward, we will be working to make the data valuation more real-time.