Johnny Walker comes out as the most valuable drinks brand in Brand Finance’s first list of Top 50 global spirit and wine brands. Some of the others might come as more of a surprise in this valuable industry study.
As we all know, there is more to having a successful brand than just volume. The value of a brand is every bit as important when it comes to leveraging margins, allocating future investment and driving bottom line performance.
The sector continues to thrive despite harsh economic conditions in some markets. Many brands are seeing dramatic increases in growth in China and India, whilst there are indigenous brands from those countries also on the list.
Brand Finance’s Chief Executive, David Haigh, says: “Our table shows that whisky has rebounded as the world’s favourite tipple. Recessionary Americans and boom time Chinese drinkers are both raising their glasses equally vigorously.”
According to Haigh, “Johnnie Walker keeps walking.”
For all drinks industry professionals, most of the brands are what we would expect: Johnnie Walker, Bacardi, Smirnoff, Chivas Regal, Hennessy, Baileys, Absolut and Jack Daniel’s. However, there are a couple of surprises – Kweichow Moutai and Wuliangye (both are local Chinese spirits) come in at numbers 9 and 10 respectively. Further down, Luzhou Laojiao and ChangYu are at 21 and 22 and McDowells from India is at 26.
Each brand’s valuation result is calculated by creating a balanced scorecard of financial, risk and brand equity measures (the ‘Brand Strength Analysis’). This analysis is then used to allocate an appropriate proportion of future sales to the brand, calculating a financial value for the brand.
The Brand Strength Analysis provides a rating for the brand’s strength (eg AA-) which is based on a similar concept to credit ratings for public companies.
THE STORY BEHIND THE BRANDS
1. Johnnie Walker
Johnnie Walker is the world’s most valuable drinks brand. It appeals to different segments of the market by pricing and labelling the ranges – Red Label to Blue Label. It’s growing particularly strongly in Asia but has potentially achieved critical mass in the UK market.
Diageo has continued to invest in the premium Johnnie Walker brands and has benefited from a consistent marketing approach.
The Keep Walking campaign has leveraged one of the most iconic design images created in the last 50 years. Drinkers worldwide instantly recognised the Striding Man.
Its foray into social media and new platforms of advertising has helped consumers engage with the brand.
Bacardi has embraced social media and is trying to encourage a viral spread of its campaign through Facebook and Twitter. It is probably the most widely distributed rum brand in the world and there is probably not a bar in the world that does not have Bacardi. Its versatility as a rum which goes with many mixers has underpinned its global reach.
Smirnoff continues to grow and appeals to the middle range of the vodka market – it’s premium but not super-premium.
It has explored the soda mixers market and also the alcopops segment. Smirnoff has engaged in a sponsorship strategy that revolves around musical events.
It will have to wait and see if it will gain a return on investment on this front.
4. Chivas Regal
Chivas Regal remains the benchmark for deluxe whisky. It has been consistently sold at a premium and is never discounted. It has the potential to be the first deluxe whisky that will truly break into the UK market.
This Pernod Ricard-owned whisky has launched a global TV and print advertising campaign entitled Live Wit Chivalry, which has been visibly implemented in Asia and Brazil, especially through the duty free channel. This campaign has tapped into a new ‘maleness’ which is very contemporary.
Hennessy has had a strong performance in North America and in Asia. It is deemed to be the cognac market leader.
It has predominantly been targeted at a mature market but it is gaining considerable market share in the younger generation of the African American market.
This has been helped by it being referenced in several rap and hip-hop songs by famous artists such a Snoop Dogg. P. Diddy and Kanye West.
This whiskey and cream-based liqueur is in a market that is fast maturing but it is still the clear leader in the sector. It has increasingly come under threat by price-fighting equivalents such as Amarula, Carolans and Sangster’s.
The Absolut brand continues to grow, as does the vodka market. It position in America is under significant pressure from competition.
There is a fear that it might be knocked off its perch by a growing number of super-premium vodkas.
Having said that, its wide array of flavours has helped it stay in sync with a changing market.
8. Jack Daniel’s
Jack Daniel’s is a true international success story. It forms the alcoholic component of the iconic drink JD and Coke. Jack Daniel’s has been able to pull off the ideal position of being an exciting brand for the young but also positioned as having substance and provenance for a more mature audience.
9. Kweichow Moutai
This is the largest Chinese brand in the league table. However, it is not an international brand but is the most prestigious biajiu in China, with a bottle of the premium range costing upwards of £100.
Wuliangye is the second most valuable alcoholic drink in China, after Kweichow Moutai. The brands account for about 75% of the baijiu market.