Leading independent branded business valuation and strategy consultancy, Brand Finance, has published its 2018 Global 500 report, which details the world’s most valuable brands, including the most valuable drinks brands.
The list is compiled using what Brand Finance calls its ‘Royalty Relief approach’, which involves estimating the likely future sales that are attributable to a brand and calculating a royalty rate that would be charged for the use of that brand. The overall brand value also includes a brand strength index and estimated brand revenues.
This year’s Brand Finance Global 500 report has seven alcoholic drinks brands in its top 500, with both the most valuable drinks brand and the overall fastest-growing brand both hailing from China.
Speaking about the popularity and growth of Chinese brands, David Haigh, CEO of Brand Finance, said: “The growth of Chinese brands is once again the standout story in our annual study of the world’s most valuable brands. Since the 19th Party Congress in 2017, there has been a renewed emphasis on brand development by Chinese companies in all sectors.
“Interestingly, while China had been pursuing a dual strategy of building home-grown brands but also acquiring underperforming international brands, like Volvo and Pirelli, the emphasis is now firmly on home-grown brands. Brands like Huawei, Ping An, State Grid, Evergrande, ICBC, Yili, Haval, Wuliangye, and many others are now being recognised worldwide as quality brands. We expect to see this develop rapidly in more and more sectors.”
Popular Chinese baijiu Moutai is once again the most valuable alcoholic drinks brand, with a total brand value of US$21.2bn. This is up from a brand value of $12.3bn last year and sees the spirit climb from the 108th most valuable global brand in 2017, to 56th in 2018.
In addition, the fastest-growing brand of 2018 also comes from China. The spirit industry champion Wuliangye grew a striking 161 per cent to US$14.6 billion year on year, rising 184 ranks to 100th.
American beers were the next drinks brands to feature on the global ranking with Bud Light moving up slightly from 230 in 2017 to 228 this year. Budweiser continues to lag behind its sister brand although it improved its overall position from 276 to 238.
Johnnie Walker fell in the ranking from 368 to 417, while another Chinese spirit, Luzhou Laojiao, featured in the ranking for the first time at 476 and Brazilian beer Braham also ranked in the top 500, at 493.
Speaking about the importance of understanding brand value, Haigh added: “Huge investments are made in the design, launch, and ongoing promotion of brands. Given their potential financial value, this makes sense. Unfortunately, most organisations fail to go beyond that, missing huge opportunities to effectively make use of what are often their most important assets. Monitoring of brand performance should be the next step, but is often sporadic. Where it does take place, it frequently lacks financial rigour and is heavily reliant on qualitative measures, poorly understood by non-marketers.
“By valuing brands, we provide a mutually intelligible language for marketing and finance teams. Marketers then have the ability to communicate the significance of what they do, and boards can use the information to chart a course that maximises profits.
“Brand Finance’s research revealed the compelling link between strong brands and stock market performance. It was found that investing in highly-branded companies would lead to a return almost double that of the average for the S&P 500 as a whole.”
Over the coming months Brand Finance will publish further reports detailing more information on the most valuable beer, wine and spirit brands.
Story by Andy Young. Originally published on www.theshout.com.au
