The world’s strongest and most valuable spirits brands

01 July, 2019 by Andy Young

Leading independent branded business valuation and strategy consultancy, Brand Finance, has produced its ‘Spirits 50 2019’ report, which details the world’s strongest and most valuable spirits brands.

The valuable brands 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.

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For the strongest brand list Brand Finance 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.

Speaking about the report, Brand Finance CEO, David Haig said: “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.

“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.

“Acknowledging and managing a company’s intangible assets taps into the hidden value that lies within it.”

The four most valuable brands are all Chinese baijiu brands, with Moutai retaining its position as the world’s most valuable spirits brand with an impressive 43 per cent increase in brand value to US$30.5bn.

The report says: “As China’s most prestigious baijiu brand, Moutai has recorded healthy brand value growth since last year, a nod to its heightened brand presence and large-scale marketing campaigns, further cementing its position as the top.

Wuliangye (brand value up 10 per cent to US$16.0bn) and Yanghe (up 16 per cent to US$9.1bn) have defended their second and third place positions respectively. Wuliangye, despite recording lower brand value growth than its baijiu counterparts, has recorded strong share price growth in the latter part of 2018.

Luzhou Laojiao (up 40 per cent to US$5.4bn) has knocked Diageo-owned Johnnie Walker (up eight per cent US$4.6bn) into fifth position, making it a Chinese top four for the first time.

In terms of the strongest brand, Don Julio has retained its position as the world’s strongest spirits brand, with a Brand Strength Index (BSI) score of 88.05 out of 100, and a corresponding AAA brand strength rating.

The report says: “Luxury premium tequila brand, Don Julio, hit the prestigious million-case mark in 2018. The brand largely attributes its success to the way in which its tequila is crafted, its excellent mixability and the effective capitalisation of its network of influencers, particularly high-profile DJ ambassadors.”

Top 10 Most Valuable Brands

  1. Moutai – $30,470m
  2. Wuliangye – $16,038m
  3. Yanghe – $9,060m
  4. Luzhou Laojiao – 5,371m
  5. Johnnie Walker – $4,644m
  6. Jack Daniel’s – $4,335m
  7. Hennessy – $3,869m
  8. Bacardi – $3,657m
  9. Smirnoff – $3,497m
  10. Gujing Gong Jiu – $2,703m

Top 10 Strongest Brands

  1. Don Julio
  2. Crown Royal
  3. Smirnoff
  4. Baileys
  5. Moutai
  6. Wuliangye
  7. Johnnie Walker
  8. Jack Daniel’s
  9. Finlandia vodka
  10. Captain Morgan