World’s top alcoholic drinks brands could lose US$33bn from COVID-19

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  • World’s top alcoholic drinks (beer, spirits and champagne & wine) brands could lose up to US$33 billion of brand value cumulatively as a result of COVID-19 pandemic.

  • Corona named world’s most valuable beer brand, brand value US$8.1 billion.

  • The king of beers, Budweiser, is the world’s strongest beer brand, Brand Strength Index (BSI) score 85.2 out of 100.

  • Chinese baijiu brands dominate the spirits sector, Moutai tops the ranking.

  • Don Julio is the world’s strongest spirits brand, BSI scores 88.7 out of 100. Moët et Chandon bubbles to the top of inaugural champagne & wine ranking as the most valuable and strongest brand, brand value US$1.4 billion and BSI score 79.0 out of 100.

World’s top alcoholic drinks brands could lose $33bn from COVID-19

The world’s most valuable alcoholic drinks brands could lose up to US$33 billion worth of brand value as a result of the COVID-19 pandemic, according to the latest Brand Finance Alcoholic Drinks 2020 report. Brand Finance’s analysis shows that different alcoholic drinks brands across the sector are likely to be impacted differently, with beer brands heavily impacted, facing a potential 20% brand value loss, and spirits and champagne & wine brands likely to be moderately impacted, facing a potential 10% brand value loss.

Looking beyond the alcoholic drinks sector, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak.

Brand Finance has assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on 1st January 2020. The likely impact on brand value was estimated for each sector. The industries have been classified into three categories – limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10% brand value loss), and heavy impact (up to 20% brand value loss) – based on the level of brand value loss observed for each sector in the first quarter of 2020.

Richard Haigh, Managing Director, Brand Finance, commented:

“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 have 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.”

ALSO READ: Chinese brands grow 8 times faster than global average

Brand Finance Beers 50

Corona crowned #1

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For the first time, the Brand Finance Beers 2020 ranking has been expanded to 50 brands, with Corona topping the ranking with a brand value of US$8.1 billion. The leading Mexican brand is imported into a staggering 120 countries and sales remain solid across its key markets, including China and South Africa.

The brand has focused on expanding its local production across several countries including China, Colombia, Brazil, Argentina, the UK and Belgium, which not only allows the brand to serve its local communities better but tackles its carbon footprint.

Corona has sought to broaden its appeal to both a wider range of occasions and consumers, within the US market, through the launch of new drinks Corona Premium and Corona Familiar – marking the first major Corona innovations in more than 25 years – and Corona Refresca, the brand’s foray into the alcohol-spiked refresher market.

With China being Corona’s largest market, outside of Mexico, the unfortunate combination of the coincidence in name and strict nationwide lockdown across the nation at the beginning of the year over Chinese New Year has caused a decline in sales. The makers of Corona have, however, hit back at allegations that the pandemic has damaged its brand, claiming that consumers understand that there is no link between the two.

Tuborg up 26%

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The Danish beer brand, Tuborg, is the world’s fastest-growing beer brand following a 26% brand value increase to US$968 million. Part of the Carlsberg Group since 1970, Tuborg posted a solid year in sales, with strong performances in China and India, the latter market accounting for more than two-thirds of the brand’s annual sales.

Last year, the brand entered a five-year partnership with Northern Europe’s largest festival, Roskilde Festival, which focuses on community and sustainability. This partnership saw the world premiere of a new organic lager and beer bars running on green electricity.

The king of beers is the 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, customer familiarity, staff satisfaction, and corporate reputation. According to these criteria, Budweiser (brand value down 14% to US$6.4 billion) is the world’s strongest beer brand with a Brand Strength Index (BSI) score of 85.2 out of 100 and a corresponding AAA brand strength rating.

World’s top alcoholic drinks brands could lose US$33bn from COVID-19 - Brand Spur
World’s top alcoholic drinks brands could lose US$33bn from COVID-19

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In Brand Finance’s global brand monitor study, Budweiser performed particularly well in the consideration and familiarity metrics, unsurprising as Budweiser is a truly global brand with a strong presence and awareness thanks to its high-profile advertising and sponsorship deals, including with the Premier League and La Liga.

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AB InBev has positively exploited the strength of its flagship brand, Budweiser, rebranding the company name to Budweiser Brewing Group in the UK and Ireland as of March 2019 to boost its profile in those two markets.

Richard Haigh, Managing Director, Brand Finance, commented:

“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.”

Brand Finance Spirits 50

Chinese baijiu brands dominate

Chinese spirits brands continue to dominate the top 3 in the Brand Finance Spirits 25 2020 ranking with Moutai (up 29% to US$39.3 billion) in first, Wuliangye (up 30% to US$20.9 billion) in second and Yanghe (down 15% to US$7.7 billion) in third.

The spirits market in China is flourishing as disposable income and living standards continue to rise across the nation. Consumers are now turning towards top quality and middle to high-end premium baijiu brands. In this year’s ranking, Chinese spirits’ brand values increased by 14% on average, while non-Chinese spirits brands decreased by 0.1% on average.

Read Also:  SONA Group’s Contribution to Growth Lauded, Chairman Declared one of the Top 25 CEOs

Moutai continues to dominate as the biggest player in the Chinese baijiu market and has focused on expanding its footprint and presence globally, with international sales reaching a record US$369 million last year. Wuliangye is the fastest growing brand in the top 10, its brand value rising an impressive 30% – a notable feat gave the sheer size of the brand already.

The brand has recently signed a strategic partnership with Pernod Ricard to support both brands’ goal of accelerated development within the Chinese and wider Asian markets. Furthermore, the brand has opened marketing centres in the Asia Pacific, Europe and America, to promote its ‘East meets West’ liquor.

Bailey’s sores 105%

Irish giant, Baileys, is the fastest-growing spirits brand, recording a staggering 105% brand value growth to US$1.3 billion. The brand has committed to its three-year-long strategy of repositioning the brand, transforming it to a drink that can be consumed on many occasions. This, paired with the exponential sales growth of the brand over the previous four years, has placed the spirits giant in a strong position.

World’s top alcoholic drinks brands could lose US$33bn from COVID-19 - Brand Spur
World’s top alcoholic drinks brands could lose US$33bn from COVID-19

Don Julio is the sector’s strongest

Don Julio (up 79% to US$958 million) is the world’s strongest spirits brand with a Brand Strength Index (BSI) score of 88.7 out of 100 and a corresponding AAA brand strength rating.

Available in over 40 countries, Don Julio has registered a strong sales increase of 14.5% this year, reaching 1.7 million nine-litre cases and being subsequently named the Tequila Brand Champion of 2020. With strong brand equity and CSR performance, Don Julio’s success has undoubtedly been fuelled by the brand’s heavy investment in social and digital media for its “For Those Who Know” campaign – the first of its kind in over 6 years.

Baileys and Don Julio’s parent company, global drinks giant Diageo, has however warned of a significant sales hit, estimated at just over €200 million, as the brand suffers with bar and pub closures as well as travel restrictions, which are significantly impacting airport sales.

Brand Finance Champagne & Wine 2020

Moët et Chandon bubbles to the top

Moët et Chandon (brand value US$1.4 billion) has claimed the title of the world’s most valuable champagne & wine brand in Brand Finance’s inaugural ranking. As one of the largest and oldest champagne producers in the world, the Moët et Chandon brand is instantly recognisable as a prestigious luxury item – aided by its association with LVMH – and a staple in popular culture, recently celebrating its 29th anniversary as the official champagne of the Golden Globes.

Moët et Chandon is also the world’s strongest champagne & wine brand with a Brand Strength Index (BSI) score of 79.0 out of 100 and a corresponding AA+ brand strength rating.

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. 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.

Changyu claims 2nd spot  

Chinese winery, Changyu closely follows Moët et Chandon in second place in the Brand Finance Champagne & Wine 2020 ranking, with a brand value of US$1.3 billion. Founded in 1819 during the Qing Dynasty, Changyu is China’s oldest and largest winery and is one of the most prolific brands both domestically and abroad. Ranking highly for familiarity and reputation and enjoying a high-profit margin, Changyu has spent the last few years expanding its reach by building numerous European-style chateaux across China and increasing its exports to Europe and Australia.

BRAND SPUR

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World’s top alcoholic drinks brands could lose US$33bn from COVID-19 - Brand SpurWorld’s top alcoholic drinks brands could lose US$33bn from COVID-19 - Brand Spur

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World’s top alcoholic drinks brands could lose US$33bn from COVID-19 - Brand SpurWorld’s top alcoholic drinks brands could lose US$33bn from COVID-19 - Brand Spur

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