World’s most valuable alcoholic brands to lose $33bn brand value, says report
Brand Finance, an independent branded business valuation consultancy, has released its 2020 Alcoholic Drinks report. The report which assessed the impact of Covid-19 pandemic based on the effect of the outbreak on enterprise value, compared to what it was on 1 January 2020, revealed world’s most valuable alcoholic drinks brands stands to lose $33bn worth of brand value as a result of the pandemic impact.
The impact estimated for each sector with impact on beer brands most likely to be heavy leading to a potential loss of 20 per cent brand value. The Spirits, Champagne and wine brands category, according to the report, has the potential of losing 10 percent as the sector is likely to be moderately impacted by the pandemic.
In addition to measuring overall brand value, Brand Finance also evaluated the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation.
On the beer category, despite a drop in brand value by 14 percent to $6.4bn, Budweiser, the world’s strongest beer brand recorded a Brand Strength Index (BSI) score of 85.2 out of 100 with a corresponding AAA brand strength rating.
On the spirit category, with a BSI score of 88.7 out of 100 and a corresponding AAA brand strength rating Don Julio emerged the world’s strongest spirit brand. The brand recorded 14.5 percent increase in sale this year with 1.7 million nine litre cases; a feat that earned it the Tequila Brand Champion of 2020.
Moët et Chandon maintains the lead as the strongest wine brand with a BSI score of 79.0 out of 100 and a corresponding AA+ brand strength rating.
Speaking on the assessment, Brand Finance managing Director, Richard Haigh said: “We are witnessing mixed fortunes across the alcoholic drinks industry as a result of the Covid-19 pandemic.
“On the one hand, the almost global lockdown and closures of bars and restaurants has resulted in the standstill of on-trade sales. Off-trade sales, however, in the supermarkets and bottle shops, have spiked as consumers shift towards consuming alcoholic drinks at home.
“It is yet to be seen whether this spike can offset the loss and therefore how brands will fare in the coming year.”
Haigh added: “Despite AB InBev citing a drop in revenue for its global brands, including Budweiser, from the pandemic, the trend for consumers to pivot towards well-known brands rather than trying new beers stands the brand in good stead in the coming year compared to its lesser known counterparts.”
Commenting on the wine category, he said: “As the leading Champagne brand in the industry, Moët et Chandon has enjoyed an improved financial performance and brand equity score this year, also remaining a firm favourite amongst consumers, scoring highly for customer recommendation and consideration.
He maintained that “over the last year, the brand has worked hard at remaining accessible by focusing on charitable endeavours, sponsoring high-profile events, and most recently launching a social media campaign highlighting its sustainable ingredients and heritage”.
It will be noted that AB InBev positively exploited the strength of Budweiser by rebranding the UK and Irelands firms in March 2019 to boost its profile in those two markets.
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