· Global brand study reveals values of the world’s top beer & spirit brands
· Baijius account for 37.5% of total value vs 28% for Whiskey/Whisky
· Individual Baijiu brands growing by as much as 91% year on year
· Budweiser and Bud Light grow strongly despite Superbowl ad controversy
Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. The world’s 50 most valuable spirits brands are included in the Brand Finance Spirits 50 and the top 25 beer brands in the Brand Finance Beers 25.
2017 is the year of Baijiu brands. For the first time, the fiery Chinese drink now accounts for a greater share of brand value than any other spirit type. In 2016, Baijiu accounted for 23% of the total brand value of the Brand Finance Drinks 50 behind Whiskey/Whisky on 37%. However this year, the tables have turned. Whiskey’s share has dropped to 28% while Baijiu’s has surged to 37.5%. The world’s top Baiju brands have a combined value of over US$22 billion.
Moutai maintains its position as the world’s most valuable spirits brand with an outstanding 60% increase in brand value to US$11.5 million. The Chinese brand has been performing well with a 19% year-on-year increase in revenue and 7% increase in net profit, driving up its share price. 50% of all sales in 2012 were to government entities so Moutai’s brand value and future success appeared to have been seriously threatened by a government crackdown on excess and gift-giving that might be construed as bribery. However the gap has been filled by individual consumers and private enterprise. Demand is now stronger than ever, with the price of a bottle recently rising to 1,200 yuan.
Moutai is even tentatively expanding outside China, celebrating the one year anniversary of Moutai Day in San Francisco in 2016 as well as launching in Germany.
Other Baijiu brands are performing extremely well too. Gujing Gong Jiu is the fastest growing brand this year, nearly doubling its brand value to US$1.1 billion. Wuliangye, Luzhou Laojiao and Yanghe follow suit, with 86%, 73% and 50% increases respectively. Brand Finance’s CEO David Haigh comments, “These rates of growth support existing evidence to suggest that consumers are trading up to more premium Baijius. The Baijiu market is resurgent but some have suggested this may only be temporary and that Chinese consumers’ tastes will diversify without corresponding growth internationally to compensate. In such a situation, strong brands will be essential to maintain market share.”
Johnnie Walker remains the world’s most valuable Whiskey/Whisky brand by a considerable margin despite a 2% brand value drop this year. Its US$4.5 billion brand value keeps it in second place within the sector as a whole.
Malibu has fallen more than any brand this year, mainly as a result of falling sales. Brand value is down 17% to US$273m. A perennial problem for owners Pernod Ricard has been Malibu’s seasonality with sales spiking in July and spiking in September/October. To counter this, Malibu black has been introduced. With a less sweet taste and packaging more akin to a traditional dark rum, it is hoped that it will help to keep the brand top of mind and maintain market share through the winter months.
The world’s most valuable beer brand is Bud Light. It is also the fastest growing major beer brand this year, up 34% to US$ 6.6 billion. Sister brand Budweiser is in second place at US$5.9 billion. Anheuser Busch courted controversy with its Superbowl ad, ‘Born the Hard Way’. The cinematic spot emphasized Budweiser’s heritage and the perseverance of its founder, but drew the ire of Trump supporters who called for a boycott of the brand for what they saw as thinly veiled pro-immigrant propaganda. This does not appear to have had any lasting damage however, with brand value up 30%.
Heineken is in 3rd place again with a brand value growth of 22% to US$5.2 billion. Heineken is a major global sponsor, particularly of sports. It has a longstanding relationship with the UEFA Champions League, however Heineken is slowly shifting its focus away from football which it sees as ‘totally overcrowded’ with competitors brands making differentiation difficult. It is instead developing its involvement with F1 and has renewed its association with Rubgy by announcing that it will be the headline sponsor of the 2019 Rugby World Cup.
Note to Editors
More information about the methodology, as well as definitions of key terms are available in the Brand Finance Alcoholic Beverages 2017 Report document. Brand values are reported in USD. For precise conversions into local currency values, please confirm rates with the Brand Finance team.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined 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 is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
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 Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings 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, while 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 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.