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Home Depot Overtakes Coca-Cola as Georgia’s Most Valuable Brand

 

·         Brand value of Home Depot went up 12% to $33.7 billion over the past year, while Coca-Cola’s dropped 5% to $30.4 billion

·         Georgia is home to 15 of America’s 500 most valuable brands

·         Despite losing the crown of the state’s most valuable brand, Coca-Cola remains Georgia’s strongest brand with AAA rating

·         Brand Finance US 500 2018 is the first brand ranking released in compliance with newly adopted ISO 20671 international standard on Brand Evaluation

·         Nationally, with a brand value breaking the $150 billion-mark, Amazon becomes America’s most valuable brand, sending Google to #3

·         Disney is America’s strongest brand as 15 other US brands achieve highest AAA+ brand rating

View the full list of 500 most valuable US brands here

The 2018 iteration of the annual Brand Finance US 500 ranking of America’s most valuable brands is the first study of its kind to be released in compliance with the ISO 20671 international standard on Brand Evaluation, adopted by industry leaders earlier this month. Brand Finance was instrumental in crafting both the newly released standard on qualitative Brand Evaluation as well as the ISO 10668 – the international standard on quantitative Brand Valuation, adopted in 2010.

David Haigh, CEO of Brand Finance, commented:

“Every year, Brand Finance puts thousands of the world’s biggest brands to the test, evaluating which are the strongest and most valuable across all markets and sectors. All our corporate brand valuations are compliant with both ISO 10668 and ISO 20671. The newly adopted international standard will be the guiding light for the entire brand valuation industry and Brand Finance is proud to be leading the way.”

Home Depot Overtakes Coca-Cola as Georgia’s Most Valuable Brand

The Brand Finance US 500 2018 report reveals that, at the state level, Home Depot leads as the most valuable brand from Georgia, with its 2018 brand value established at $33.7 billion, up 12% from last year. In a shock development, it has taken over the lead from the iconic Coca-Cola brand (5% to $30.4 billion), which dominated the ranking since its inception.

Laurence Newell, Director of Brand Finance North America, commented:

“Alongside its expanded online shop offering and plans to open new stores, Home Depot has also announced investment in the construction of over 150 new warehouses and distribution centers in Atlanta and beyond. It is this ambitious growth strategy that has helped the brand to become the leader of Georgia’s brand ranking.”

Home Depot bucks the national trend, as across the country, the rise of the Tech sector, and particularly online shopping giants like Amazon, has dealt a blow to the prominence of the traditional brick and mortar model. This year’s Brand Finance US 500 study reveals that two out of every three Retail brands in the ranking have lost brand value over the last year, which contributed to the fall of Retail to third rank among the brand-rich industries. Worth $279.3 billion, Retail has been overtaken by Banking & Financial Services, and accounts for only 8% of the total value of America’s top 500 brands.

With 15 brands in the ranking worth $122.3 billion, Georgia is the 6th state nationally according to brand value and 9th according to number of brands.

The strength of America’s brands

In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, through the Brand Strength Index (BSI) – a balanced scorecard of factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Along with the level of revenues, brand strength is a crucial driver of brand value.

According to these criteria, Coca-Cola remains Georgia’s strongest brand, earning a BSI score of 89.3 out of 100 and a corresponding AAA rating. Nationally, Disney is America’s strongest brand, earning a BSI score of 92.3 and an elite AAA+ rating. Just a handful of brands in the world across all industries achieve such status. Interestingly, America is home to most of them as there are 15 other AAA+ brands in the Brand Finance US 500 alongside Disney, including Visa, Johnson’s, and McDonald’s.

Laurence Newell, Director of Brand Finance North America, said:

“A strong and valuable brand tends to deliver superior business performance. In periods of prosperity, strong brands serve as a launching pad for growth, equally, in times of crisis, they provide buoyancy to the business.”

Amazon becomes America’s most valuable brand

Nationally, Amazon takes this year’s top spot in the Brand Finance US 500 2018 league table, with its brand value growing by 42% to $150.8 billion. The surge in value for Amazon’s brand allowed it to overtake Apple (up 37% to $146.3 billion), which takes second place in the ranking, despite similarly strong growth. Google (up 10% to $120.9 billion) fell from first place to third, unable to keep pace with the remarkable growth of the top two brands.

This year’s study reveals that brands in the Tech sector have cemented their position as absolute leaders in the market as they now account for $977.0 billion or 30% of the total brand value in the league table. Overall, Tech brands have grown nearly $100 billion year on year and claim 5 of the top 10 positions in the ranking.

Commenting on the list’s frontrunner, David Haigh said:

“Amazon has built a brand that has no peer. They provide unmatched convenience, availability, and scale. The success of their brand is a reflection of an authentic obsession with their customers. Boldly expanding into new – seemingly unrelated – industries to respond to the evolving preferences of modern consumers, Amazon has completely revolutionized the brand world as we used to know it.”

View the full Brand Finance US 500 2018 report here. Highlights:

YouTube doubles brand value

YouTube (up 114% to $25.9 billion), which is owned by Google’s parent company, Alphabet, is the fastest-growing brand in the Brand Finance US 500 rankings, just ahead of new entrant Rockwell Collins (up 112% to $1.8 billion). Now the internet’s primary video source, YouTube registers hundreds of hours of video uploaded every minute. YouTube’s rise has opened up a new industry in its own right with the commercialization of vlogs and the creation of virtually unlimited marketing opportunities accessible to businesses large and small.

Another brand to achieve very fast brand value growth this year was Tesla (up 106% to $5.7 billion). Despite being founded only 15 years ago, Tesla has become one of the most valuable automobile brands in the world in a very short time. Tesla’s brand value has been built upon the environmentally friendly positioning, premium styling of their distinctive vehicles, and a very growth-focused corporate vision, which aims to bring a more affordable model to market very soon. However, doubts exist whether Tesla has the short-term manufacturing capability to satisfy consumer demand in terms of both volume and quality to match the brand expectations they have created.

Big banking brands boom

As the damaging legacy of the financial crisis is slowly fading away, Banking & Financial Services brands are back in black. Now America’s second most valuable sector, Banking & Financial Services contributes $307.1 billion or 9% to the total brand value of the league table. All four largest high street banks in the Brand Finance US 500 ranking: Wells Fargo (9), Chase (10), Bank of America (12), and Citi (17), recorded significant growth, each adding between $2.5 and $5.1 billion brand value to last year’s results. Chase broke into the top 10 this year, following significant expansion over the last few years and announcements of further plans to open branches in cities like Boston, Philadelphia, and Washington, D.C. 

ENDS

Note to Editors

Every year, leading independent brand valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 500 most valuable US brands are included in the Brand Finance US 500 2018 league table.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is assessed through a balanced scorecard of factors (such as marketing investment, stakeholder equity, and business performance) and used to determine what proportion of a business’s revenue is contributed by the brand.

Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance US 500 2018 report.

Brand Finance helped craft the internationally recognized standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.

Data compiled for the Brand Finance league tables and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.

Media Contacts

Erika Eyl

Brand Finance Americas

US Mobile: +1 (917) 794 2924

T: +52 55 4631 3476

M: +52 55 1401 8596

e.eyl@brandfinance.com

Konrad Jagodzinski

Communications Director

T: +44 (0)2073 899 400           

M: +44 (0)7508 304 782          

k.jagodzinski@brandfinance.com

Sehr Sarwar

Communications Manager

T: +44 (0)2073 899 400

M: +44 (0)7966 963 669

s.sarwar@brandfinance.com

About Brand Finance          
Brand Finance is the world’s leading brand valuation and strategy consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.

Methodology
Definition of Brand
Brand Finance helped to craft the internationally recognized standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.

Brand Strength
Brand Strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.

Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.

Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.

The steps in this process are as follows:

1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.

2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.

3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.

4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.

5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.

6 Apply the royalty rate to the forecast revenues to derive brand revenues.

7 Brand revenues are discounted post-tax to a net present value which equals the brand value.

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