View the full Brand Finance Beers 25 2019 report here
Budweiser has claimed the top spot as the world’s most valuable beer brand for the first time, overtaking long-standing leader Bud Light, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy.
Budweiser’s brand value has increased 6% to US$7.5 billion, following the immense success of its global sponsorship campaign of the 2018 FIFA World Cup. The campaign, the brand’s most expensive to date, reached 3.2 billion football fans globally, facilitating accelerated growth in new markets including South Africa, Colombia, China and Australia.
Budweiser and Bud Light (down 5% to US$7.0 billion), the flagship brands of Belgian brewing giant AB InBev, have had to contend with the changing consumer drinking habits across the US. The general decline in beer consumption across millennials, and the preference for healthier alcohol-free alternatives have contributed to the slowdown in their brand value growth compared to previous years.
The AB InBev portfolio still dominates the rankings, however, with 11 brands claiming spots in the top 25, down from 13 last year. The brewer closed the third largest acquisition in history in 2016, after merging with SABMiller, and has since been tackling its mountainous debt pile, predominantly through sales drives.
Chinese brands record fastest growth
China’s Snow is the fastest-growing brand in this year’s Brand Finance Beers 25 ranking and has broken into the top 10 for the first time, with an impressive 52% rise in brand value to US$3.7 billion. Snow is the best-selling beer in the world, clocking up 101.2 million hectolitres of beer sold per year, more than double that of Budweiser’s sales. The brand, which historically has only been sold in China, has made a number of strategic partnerships in order to raise its global presence, notably with Dutch brewing giant Heineken and America’s Molson Coors.
Tsingtao (up 49% to US$1.7 billion) has jumped up 9 places in the ranking, more than any other brand. The brand continues to retain its loyal customer base in its home country and is also the most exported Chinese beer, sold in over 100 countries and regions globally. As with other Chinese brands, Tsingtao faces fierce competition from other global brewing giants but despite this, Tsingtao has recorded strong sales growth over the last year.
David Haigh, CEO of Brand Finance, commented:
“As you can see across this year’s ranking, it is the Asian, particularly Chinese, beer brands that are seeing the highest brand value growth. With demand for beer at an all time high in China and predictions of inflated growth over the coming years as a result of greater disposable income from the emerging middle class, this trend looks set to continue. If these brands begin to expand beyond China and into new markets, we could potentially see some very stiff competition to established Western beer brands.”
One to watch: BrewDog
Innovative Scottish craft beer brand, BrewDog, is the highest new entrant in the ranking in 19th position, with a brand value of US$1.5 billion. Now 11 years old, the brand is undertaking ambitious growth plans across key international markets, with new breweries and bars in the pipeline both at home in the UK and abroad. Its flagship beer, Punk IPA, is already the number one craft beer in the UK and the brand is striving to make it the beer of choice internationally.
The brand is committed to expansion, with gin and vodka already in its portfolio, it is widening its reach further by entering into the whiskey market, in a bid to make it more playful.
In 2018, BrewDog announced its foray into the hotels business, opening the doors to the world’s first craft beer hotel, The DogHouse.
Aguila flies high as sector’s strongest
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to this criteria, Colombia’s Aguila is the world’s strongest beer brand with a Brand Strength Index (BSI) score of 88.41 out of 100 and a corresponding AAA brand strength rating.
Aguila (brand value down 18% to US$1.1 billion), part of AB InBev’s portfolio, is Colombia’s second most popular beer and its consistently low prices ensures high customer retention. The brand, which has sponsored the national Colombian football team since late 2014, lowered its prices further in 2018 to celebrate the FIFA World Cup.
View the full Beers 25 2019 report here
Note to Editors
Every year, Brand Finance values 5,000 of the world’s biggest brands. The 25 most valuable spirits brands are included in the Brand Finance Beers 25 2019 ranking.
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 the efficacy of a brand’s performance on intangible measures relative to its competitors.
Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Beers 25 2019 report.
Data compiled for the Brand Finance rankings 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.
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.