Beers 25

2018The annual report on the world’s most valuable beer brands November 2018 Foreword.

What is the purpose of a strong brand: to attract customers, to build loyalty, to motivate staff? All true, but for a commercial brand at least, the first answer must always be ‘to make money’.

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.

David Haigh As a result, marketing teams struggle to communicate the value of their work and CEO, Brand Finance boards then underestimate the significance of their brands to the business. Sceptical finance teams, unconvinced by what they perceive as marketing mumbo jumbo, may fail to agree necessary investments. What marketing spend there is, can end up poorly directed as marketers are left to operate with insufficient financial guidance or accountability. The end result can be a slow but steady downward spiral of poor communication, wasted resources, and a negative impact on the bottom line.

Brand Finance bridges the gap between marketing and finance. Our teams have experience across a wide range of disciplines from market research and visual identity to tax and accounting. We understand the importance of design, advertising, and marketing, but we also believe that the ultimate and overriding purpose of brands is to make money. That is why we connect brands to the bottom line.

By valuing brands, we provide a mutually intelligible language for marketing and finance teams. Marketers then have the ability to communicate the significance of what they do, and boards can use the information to chart a course that maximises profits. Without knowing the precise, financial value of an asset, how can you know if you are maximising your returns? If you are intending to license a brand, how can you know you are getting a fair price? If you are intending to sell, how do you know what the right time is? How do you decide which brands to discontinue, whether to rebrand and how to arrange your brand architecture? Brand Finance has conducted thousands of brand and branded business valuations to help answer these questions.

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 following report is a first step to understanding more about brands, how to value them and how to use that information to benefit the business.

The team and I look forward to continuing the conversation with you.

Brand Finance Beers 25 November 2018 3. About Brand Finance. Contents.

Brand Finance is the world’s leading independent Foreword 3 brand valuation and strategy consultancy. About Brand Finance 4 Brand Finance was set up in 1996 with the aim of ‘bridging the gap between marketing and finance’. Contact Details 4 For more than 20 years, we have helped companies and organisations of all types to connect their brands Definitions 6 to the bottom line. Executive Summary 8 We pride ourselves on four key strengths: • Independence Methodology 12 • Technical Credibility • Transparency Understand Your Brand’s Value 13 • Expertise. Consulting Services 14 Brand Finance puts thousands of the world’s biggest Communications Services 15 brands to the test every year, evaluating which are the strongest and most valuable.

For more information, please visit our website: www.brandfinance.com

Contact Details.

For business enquiries, For further information on Brand Finance®’s services and valuation experience, please contact: please contact your local representative: Richard Haigh Managing Director Country Contact Email Address [email protected] Asia Pacific Samir Dixit [email protected] +65 906 98 651 Australia Mark Crowe [email protected] +61 282 498 320 Canada Charles Scarlett-Smith [email protected] +1 647 3437 266 For media enquiries, Caribbean Nigel Cooper [email protected] +1 876 8256 598 please contact: China Scott Chen [email protected] +86 1860 118 8821 East Africa Jawad Jaffer [email protected] +254 204 440 053 Konrad Jagodzinski Germany Holger Mühlbauer [email protected] +49 1515 474 9834 Communications Director India Savio D’Souza [email protected] +44 207 389 9400 [email protected] Indonesia Jimmy Halim [email protected] +62 215 3678 064 Ireland Simon Haigh [email protected] +353 087 6695 881 Italy Massimo Pizzo [email protected] +39 0230 312 5105 For all other enquiries, Japan Jun Tanaka [email protected] +8190 7116 1881 please contact: Mexico & LatAm Laurence Newell [email protected] +52 1559 197 1925 [email protected] Middle East Andrew Campbell [email protected] +971 508 113 341 Nigeria Babatunde Odumeru [email protected] +234 012 911 988 +44 (0)207 389 9400 Romania Mihai Bogdan [email protected] +40 728 702 705 Spain Teresa de Lemus [email protected] +34 654 481 043 South Africa Jeremy Sampson [email protected] +27 828 857 300 linkedin.com/company/ Sri Lanka Ruchi Gunewardene [email protected] +94 114 941 670 brand-finance Turkey Muhterem Ilgüner [email protected] +90 216 3526 729 UK Richard Haigh [email protected] +44 207 389 9400 USA Laurence Newell [email protected] +1 917 794 3249 facebook.com/brandfinance Vietnam Lai Tien Manh [email protected] +84 473 004 468

twitter.com/brandfinance

4. Brand Finance Beers 25 November 2018 Brand Finance Beers 25 November 2018 5. Definitions.

Definitions.

Brand Value Brand Strength

+ Enterprise Value Brand Strength is the efficacy of a brand’s Each brand is assigned a Brand Strength Index (BSI) The value of the entire enterprise, made performance on intangible measures, relative to its score out of 100, which feeds into the brand value up of multiple branded businesses. competitors. calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a Where a company has a purely mono- [Anheuser-Busch InBev] In order to determine the strength of a brand, we look at branded architecture, the ‘enterprise value’ credit rating. is the same as ‘branded business value’. Marketing Investment, Stakeholder Equity, and the impact Enterp of those on Business Performance. Analysing the three brand strength measures helps inform rise Va managers of a brand’s potential for future success. lue + Branded Business Value The value of a single branded business Bra operating under the subject brand. nded Bu si [Bud Light] A brand should be viewed in the context of Marketing Widely recognised factors deployed by marketers to create brand loyalty and ne ss the business in which it operates. Brand Investment market share. V a Finance always conducts a branded Bran lu d C e business valuation as part of any brand on tr valuation. We evaluate the full brand value ib u t chain in order to understand the links io n between marketing investment, brand- Stakeholder Perceptions of the brand among different stakeholder groups, with customers tracking data, and stakeholder behaviour. Equity being the most important.

+ Brand Contribution The overall uplift in shareholder value Brand Quantitative market and financial measures representing the success of the Value that the business derives from owning Business the brand rather than operating a Brand Strength Index Performance brand in achieving price and volume premium. [Budweiser] generic brand.

The brand values contained in our league tables are those of the potentially transferable brand assets only, making ‘brand contribution’ a wider concept. An Marketing Investment assessment of overall ‘brand contribution’ to • A brand that has high Marketing Investment but low Stakeholder Equity may be on a a business provides additional insights to path to growth. This high investment is likely to lead to future performance in Stakeholder Equity which would in turn lead to better Business Performance in the future. help optimise performance. Investment • However, high Marketing Investment over an extended period with little improvement in Stakeholder Equity would imply that the brand is unable to shape customers’ preference. + Brand Value The value of the trade mark and Stakeholder Equity associated marketing IP within the • The same is true for Stakeholder Equity. If a company has high Stakeholder Equity, it is branded business. Equity likely that Business Performance will improve in the future. [Brahma] • However, if the brand’s poor Business Performance persists, it would suggest that the Brand Finance helped to craft the brand is inefficient compared to its competitors in transferring stakeholder sentiment internationally recognised standard on to a volume or price premium. Brand Valuation – ISO 10668. It defines brand as a marketing-related intangible Performance Business Performance asset including, but not limited to, names, • Finally, if a brand has a strong Business Performance but scores poorly on Stakeholder terms, signs, symbols, logos, and designs, Equity, it would imply that, in the future, the brand’s ability to drive value will diminish. intended to identify goods, services or • However, if it is able to sustain these higher outputs, it shows that the brand is entities, creating distinctive images and particularly efficient at creating value from sentiment compared to its competitors. associations in the minds of stakeholders, thereby generating economic benefits.

6. Brand Finance Beers 25 November 2018 Brand Finance Beers 25 November 2018 7. Executive Summary.

Executive Summary.

of beer brands growing strongly across the world, a Top 10 Most Valuable Brands credit to its global presence; operating across London, Sao Paulo, New York, Johannesburg, and Mexico City. Rank 2018: 1 2017: 1 AB InBev has also been investing in Africa, where beer 1 BV 2018: $7377m consumption is on the rise, and has announced plans BV 2017: $6608m +12% to build a US$100m brewery in Tanzania. Brand Rating: AAA-

Harbin and Aguila Fly High Rank 2018: 2 2017: 2 2 BV 2018: $7082m BV 2017: $5863m +21% Harbin (up 69% to US$3.5 billion) in China and Aguila (up Brand Rating: AAA- 52% to US$1.4 billion) in Colombia are the world’s fastest- growing beer brands this year ahead of Thailand’s Chang Rank 2018: 3 2017: 3 (up 48% to US$1.3 billion) and Mexico’s Corona Extra (up 3 BV 2018: $6090m 43% to US$3.4 billion). Harbin, Aguila, and Corona are all BV 2017: $5237m +16% part of the AB InBev family and have been able to leverage Brand Rating: AA the global giant’s output capacities to their advantage. Rank 2018: 4 2017: 4 4 BV 2018: $3715m Asahi Battles Changing Tastes BV 2017: $3148m +18% Brand Rating: AAA Asahi (down 34% to US$2.0 billion), on the other hand, lost more brand value this year than any other brand in Rank 2018: 5 2017: 12 the ranking and dropped out of the top ten, falling from 5 BV 2018: $3539m fifth position in 2017 to twelfth most valuable beer brand BV 2017: $2091m +69% Bud Light and Budweiser Bubble Up The world’s biggest beer brands have Brand Rating: AA+

Bud Light remains the world’s most valuable beer brand, been able to build deep customer Brand Value Change 2017-2018 (%) Rank 2018: 6 2017: 7 with its brand value increasing by 12% to US$7.4 billion loyalty by representing an accessible BV 2018: $3417m 6 +43% since last year. Despite a reduction in sales in 2017, the BV 2017: $2394m but aspirational lifestyle. Creative Harbin 69% Brand Rating: AA+ value of Bud Light’s brand increased in connection with marketing campaigns are equally Aguila 52% its well-received “Dilly Dilly” marketing campaign, and Rank 2018: 7 2017: 5 the launch of its product into the United Kingdom. important as the taste and packaging. Chang 48% 7 BV 2018: $3317m They help the established market Corona Extra 43% BV 2017: $3071m +8% Budweiser (up 21% to US$7.1 billion) enjoyed strong leaders compete with challenger Snow 31% Brand Rating: AAA growth, retaining second place and narrowing the gap Coors Light 29% behind Bud Light. Despite a decade of decline in the brands on their home turf by Rank 2018: 8 2017: 9 brand’s American sales, Budweiser continues to benefit promising their consumers an Tecate 24% BV 2018: $2783m 8 +22% from its leadership position in the mainstream beer Castle 24% BV 2017: $2286m experience rather than just a product. Brand Rating: A- market. With an average brand value growth of 19% year The top brands will continue to face Busch 22% on year, other global brands ranked in the Brand Finance Kirin 22% Rank 2018: 9 2017: 11 Beers 25 league table also hold their own in the face of challenges from craft beers but smart Cass 22% 9 BV 2018: $2711m new challenges posed by the craft beer revolution. marketing combined with the scale of BV 2017: $2106m +29% production and distribution Budweiser 21% Brand Rating: AA+ -12% Miller Lite Belgian Beer Brewer’s 13 Brands capabilities of the big conglomerates -21% Antarctica Rank 2018: 10 2017: 8 BV 2018: $2528m AB InBev dominates the ranking as its brands claim is a strong defence strategy. 10 -34% Asahi BV 2017: $2299m +10% 13 out of the top 25 spots. The Belgian conglomerate David Haigh Brand Rating: AAA- has had a remarkably successful year with their family CEO of Brand Finance

8. Brand Finance Beers 25 November 2018 Brand Finance Beers 25 November 2018 9. Executive Summary. Executive Summary.

Brand Value Over Time this year. This reflects a change in Japanese consumer Top 5 Strongest Brands tastes, with preferences shifting towards other drinks as Japanese beer consumption has been recorded BSI Score 8 at an all-time low. Consequently, the Asahi Group has acquired beer brands outside Japan as it seeks to 88.3 diversify its geographic distribution of earnings. 7 BSI Score Brahma Boasts Best Brand Strength 86.8 Aside from determining overall brand value, Brand Finance 5 also evaluates the relative strength of brands through a BSI Score balanced scorecard of metrics on marketing investment, 4 stakeholder equity, and business performance. 86.8 Brand Value (USD bn) Brand Value BSI Score 3 Brazil’s Brahma is the world’s strongest beer brand with a Brand Strength Index (BSI) score of 88.3 out of 100 and a 85.7 2 corresponding AAA brand rating. Brahma invested heavily in building its brand awareness through a series of high- BSI Score 1 profile advertising campaigns, mustering strong results in 2012 2013 2014 2015 201 2017 2018 the domestic Brazilian market and further complemented Year by international sales. 83.0 Top 25 Most Valuable Beer Brands

Brand Value by Country Rank Rank Brand name Country Brand value % Brand value Brand Brand 2018 2017 (USD m) change (USD m) rating rating 2018 2017 2018 2017

1 1 Bud Light United States 7,377 +12% 6608 AAA- AAA- 2 2 Budweiser United States 7,082 +21% 5863 AAA- AAA- 3 3 Heineken Netherlands 6,079 +16% 5237 AA AA Colour Country Brand Value % of total 4 4 Brahma Brazil 3,715 +18% 3148 AAA AAA 5 12 Harbin China 3,539 +69% 2091 AA+ AA+ (USD bn) 6 7 Corona Extra Mexico 3,417 +43% 2394 AA+ AA+ ——— United States 218.9 33.7% 7 5 Skol (Conglomerate) Brazil 3,317 +8% 3071 AAA AAA ——— Netherlands 72.7 11.2% 8 9 Kirin Japan 2,783 +22% 2286 A+ A- 9 11 Coors Light United States 2,711 +29% 2106 AA+ AA+ ——— Brazil 81.5 12.6% 10 8 Guinness Ireland 2,528 +10% 2299 AA AAA- ——— China 70.6 10.9% 11 13 Snow China 2,415 +31% 1844 AA- AA- 12 6 Asahi Japan 2,024 -34% 3044 AA- AA- ——— ——— Mexico 54.0 8.3% 13 14 Tecate Mexico 1,984 +24% 1597 AA+ AA+ ——— Japan 48.1 7.4% 14 10 Miller Lite United States 1,940 -12% 2195 AA- AA- 15 16 Stella Artois Belgium 1,654 +19% 1390 AA+ AA+ ——— Others 103.7 16.0% ——— 16 17 Busch United States 1,629 +22% 1333 AA AA- Total 1286.2 100% 17 24 Aguila Colombia 1,403 +52% 924 AAA AAA 18 18 Carlsberg Denmark 1,276 +16% 1102 A+ AA- 19 New Chang Thailand 1,268 +48% 855 A A 20 21 Cass South Korea 1,217 +22% 1000 AA- AA- 21 19 Amstel Netherlands 1,175 +10% 1070 AA- AA- 22 20 Natural United States 1,155 +10% 1047 AA AA- 23 15 Antarctica Brazil 1,123 -21% 1429 AAA AAA 24 22 Tsingtao China 1,110 +13% 981 AA- AA 25 New Castle South Africa 1,026 +24% 828 AA- AA-

10. Brand Finance Beers 25 November 2018 Brand Finance Beers 25 November 2018 11. Methodology. Understand Your Brand’s Value.

Brand Finance calculates the values of the A Brand Value Report provides a complete Each report includes expert recommendations for growing brands in its league tables using the Royalty breakdown of the assumptions, data sources, and brand value to drive business performance and offers a Relief approach – a brand valuation method calculations used to arrive at your brand’s value. cost-effective way to gaining a better understanding of compliant with the industry standards set in Brand Strength your position against competitors. ISO 10668. Index (BSI) Brand strength This involves estimating the likely future revenues that expressed as a BSI What is a Brand Value Report? What are the benefits of a Brand are attributable to a brand by calculating a royalty rate score out of 100. that would be charged for its use, to arrive at a ‘brand Brand Valuation Summary Value Report? value’ understood as a net economic benefit that a + Internal understanding of brand licensor would achieve by licensing the brand in the + Brand value tracking Insight open market. + Competitor benchmarking Provide insight as to how the brand is + Historical brand value The steps in this process are as follows: performing vs. key competitors on underlying measures and drivers of Brand Brand Strength Index 1 Calculate brand strength using a balanced scorecard Royalty Rate brand value and brand strength. of metrics assessing Marketing Investment, + Brand strength tracking BSI score applied to an Stakeholder Equity, and Business Performance. Brand + Brand strength analysis appropriate sector Strategy strength is expressed as a Brand Strength Index (BSI) + Management KPIs royalty range. Understand where brand value is being score on a scale of 0 to 100. + Competitor benchmarking generated by region and channel in 2 Determine royalty range for each industry, reflecting order to identify areas of opportunity Royalty Rates the importance of brand to purchasing decisions. In that warrant further investigation. luxury, the maximum percentage is high, in extractive + Transfer pricing industry, where goods are often commoditised, it is + Licensing/franchising negotiation Benchmarking + International licensing lower. This is done by reviewing comparable licensing Track year-on-year changes to brand + Competitor benchmarking agreements sourced from Brand Finance’s extensive value and set long-term objectives database. Brand Revenues against which high-level brand Cost of Capital 3 Calculate royalty rate. The BSI score is applied to the Royalty rate applied to performance can be benchmarked. + Independent view of cost of capital for internal royalty range to arrive at a royalty rate. For example, if forecast revenues to valuations and project appraisal exercises the royalty range in a sector is 0-5% and a brand has derive brand value. Education a BSI score of 80 out of 100, then an appropriate Provide a platform of understanding Customer Research royalty rate for the use of this brand in the given sector which the company can use to educate will be 4%. + Utilities employees on the importance of the + Insurance brand. 4 Determine brand-specific revenues by estimating a + Banks proportion of parent company revenues attributable + Telecoms Communication to a brand. Brand Value Communicate your brand’s success to 5 Determine forecast revenues using a function of Post-tax brand shareholders, customers, and other historic revenues, equity analyst forecasts, and revenues discounted to For more information regarding our Brand Value strategically selected audiences. economic growth rates. a net present value (NPV) Reports, please contact: which equals the brand 6 Apply the royalty rate to the forecast revenues to value. Understanding derive brand revenues. Richard Haigh Understand and appreciate the value of Managing Director, Brand Finance your brand as an asset of the business. 7 Brand revenues are discounted post-tax to a net [email protected] present value which equals the brand value.

Disclaimer Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions produced in this study are based only 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 report are not to be construed as providing investment or business advice. Brand Finance does not intend the report to be relied upon for any reason and excludes all liability to any body, government or organisation.

12. Brand Finance Beers 25 November 2018 Brand Finance Beers 25 November 2018 13. Consulting Services. Communications Services.

We offer a variety of services to help communicate your brand’s success. 1. Valuation: What are my intangible 2. Analytics: How can I improve assets worth? marketing effectiveness? Valuations may be conducted for technical Analytical services help to uncover drivers purposes and to set a baseline against of demand and insights. Identifying the CEO Quote Social Media which potential strategic brand factors which drive consumer behaviour Supply a quote in Coordinate with your scenarios can be evaluated. allows an understanding of how brands recognition of your social media activity N 2. brand’s performance to communicate your IO AN create bottom-line impact. for you to use in brand’s success more + Branded Business Valuation T A A L external and internal effectively. + Trademark Valuation U Y Market Research Analytics + communications. Awards L T + Intangible Asset Valuation A I Return on Marketing Investment + Press Release Produce an accolade V C Assist with the creation plaque and hand-written + Brand Contribution . S Brand Audits + 1 of a press release certificates, personally Brand Scorecard Tracking + communicating your signed by our CEO, to Brand & brand’s success. recognise your brand’s performance.

Business Value

S

4. Transactions: N 3. Strategy: How can 3

. O

Advertising I

Is it a good deal? S I increase the value of

T Allow full use of the T

C

R Your Brand Value Brand Finance logo on

Can I leverage my A my branded business?

A

S Explain and discuss your

T your ad designs and

E N

G brand’s performance in

intangible assets? A Strategic marketing services enable create a bespoke digital Y

R How we can help

T

. 4 more depth. brands to be leveraged to grow endorsement stamp for Transaction services help buyers, your website and investor sellers, and owners of branded businesses businesses. Scenario modelling will relations use. get a better deal by leveraging the value of identify the best opportunities, ensuring their intangibles. resources are allocated to those activities which have the most impact on brand and business value. + M&A Due Diligence + Franchising & Licensing Brand Governance + + Tax & Transfer Pricing Brand Architecture & Portfolio Management + + Expert Witness Brand Transition + Brand Positioning & Extension +

Strongest

MARKETING FINANCE TAX LEGAL Global Brand 2018

We help marketers to We provide financiers and We help brand owners We help clients to enforce connect their brands to auditors with an and fiscal authorities to and exploit their business performance by independent assessment understand the intellectual property rights Your Brand evaluating the return on on all forms of brand and implications of different by providing independent investment (ROI) of intangible asset tax, transfer pricing, and expert advice in- and brand-based decisions valuations. brand ownership outside of the courtroom. and strategies. arrangements.

Example digital endorsement stamp for use on your website as well as in investor relations and advertising, to recognise your brand’s performance.

14. Brand Finance Beers 25 November 2018 Brand Finance Beers 25 November 2018 15. ®

BECOME A MEMBER A contemporary and exclusive members’ club & events venue in the heart of the City of London

Characterful space for meetings and private events Members’Private events Members with focus Club on marketing & Events andVenue branding Discounted room hire for members

3 Birchin Lane, London, EC3V 9BW +44 (0) 207 3899 410 www.brandexchange.com [email protected] 3 Birchin Lane, London, EC3V 9BW +44 0207 389 9410 www.brandexchange.com [email protected] Brand Exchange is a member of the Brand Finance plc group of companies

Value-Based Communications

We execute strategic communications programmes to optimise the value of your business and to enhance brand perception among stakeholders.

SERVICES - Research and Insights - Project Management and Agency Steering - Content and Channel Strategy - Integrated Communications Planning and Execution - Communications Workshops

For more information, contact [email protected] or visit www.brand-dialogue.co.uk

Brand Dialogue is a member of the Brand Finance plc group of companies

16. Brand Finance Beers 25 November 2018 Contact us.

The World’s Leading Independent Brand Valuation and Strategy Consultancy T: +44 (0)20 7389 9400 E: [email protected] www.brandfinance.com