The World’s Most Valuable Brand Portfolios 

It’s not just the product or service that has business value
by Mike Hunter

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Every year, leading branded business valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test. They are evaluated to determine which are the most powerful and valuable by country, by industry and against all other brands worldwide. The companies with the highest total value of brands under management can be found in the Brand Finance Portfolio 100. Many of these companies have plants or offices in Arizona.

The total value of the table is US$3.2 trillion, half of which is from the 44 U.S. companies that total US$1.68 trillion. Fourteen Chinese companies feature in the table, rendering it the country with the second-highest number of portfolios. They make up US$347 billion of the total sum. Nine European Union (pre-Brexit) countries make the table and are home to 29 brands, nine of which are UK-based — more than any other European country. The portfolio table lists the companies with the most brand value under their management. Some companies, like Apple, include only one highly valuable brand, while other companies, like Nestlé S.A., operate hundreds. Apple does operate more brands; however, due to its reporting, it is not possible to identify and value these sub-brands from their financial statements.

The fastest growing portfolio this year is Agricultural Bank of China, with a value of US$32.3 billion after enjoying 42 percent growth. China Construction Bank and ICBC make the top five, with values of US$35.4 billion and US$36.3 billion after rising 34 percent and 32 percent, respectively. China Construction Bank is, in fact, the world’s most powerful banking brand. Chinese banks are performing well on brand equity measures such as familiarity, consideration, recommendation and preference as a result of investing in their brands. It must be noted that none of the Chinese portfolios in the table dropped in value.

Unilever’s impactful innovations have boosted its performance. The launch of the new Axe range and the “Find Your Magic” brand campaign appealed to a wider audience as it encouraged men to break free from assumptions about how they should behave and express themselves. Unilever grew 18 percent to a value of US$42.7 billion this year. Vodafone Group is the only other UK company to enjoy an increase in value this year, rising 2 percent to US$27.8 billion. It is no secret that smartphones are becoming increasingly prominent, and the growing proliferation of smartphones in both developed and emerging markets is the main driver behind a surge in data demand and revenue. Vodafone Group’s global presence positions it well to cater to the rising demand. Moreover, the oligopolistic nature of the industry coupled with Vodafone’s immense size gives the company a competitive edge among its peers.

With more than 500 brands in its portfolio, Nestlé S.A. owns the largest number of brands in the table. It climbs up the ranks to seventh place after 14 percent growth to a value of US$66.6 billion. Accelerated growth in North America was largely due to the turnaround in frozen meals, while in Latin America, Nestlé cited instant coffee as the core reason for growth. Nestlé’s category dynamics and innovation, which can be seen in its range of bottled water, are also factors that contributed to its strong growth. Furthermore, an increase in health awareness in relation to carbonated drinks gave Nestlé the opportunity to promote its bottled water segment, which other companies may have failed to embrace. Nestlé’s success is largely due to the range of product segments it provides, allowing it to more effectively overcome challenging global trends than its competitors.

 

We Love Our Cars

Volkswagen Ag was the biggest faller in the table this year. Its portfolio value dropped 36 percent to US$42.2 billion. The recent emissions scandal negatively impacted Volkswagen.

On a broader spectrum, the light vehicle industry, albeit growing at its slowest rate in the last decade, is forecasted to grow nonetheless. This is somewhat due to the upward surges in China, India and across continental Western Europe, which compensate for reductions in Brazil, the U.S. and the UK.

Toyota Motor Corp, ranked 10th this year, conforms to the forecasted industry trend, enjoying a 30 percent increase in portfolio value to US$55.3 billion this year.

 

10 Most Valuable Brand Portfolios

Rank
2016

Rank
2015
Number of Brands* Parent Company Domicile Portfolio
Value 2016
Portfolio
rating 2016
Portfolio Value
change (%)

Portfolio
Value 2015

1

1

1

Apple Inc United States 145,918 AAA 14% 128,303

2

3

17

Alphabet Inc United States 99,046 AAA 25% 79,430

3

2

1

Samsung Group South Korea 83,185 AAA 2% 81,716

4

5

13

Wal-Mart Stores Inc United States 77,523 AA 7% 72,599

5

4

7

Microsoft Corp United States 74,121 AAA -1% 74,912

6

11

6

Amazon.Com Inc United States 69,642 AA+ 24% 56,142

7

9

539

Nestlé S.A. Switzerland 66,604 AA+ 14% 58,300

8

7

1

Verizon Communications Inc United States 63,116 AAA- 5% 59,843

9

8

1

AT&T Inc United States 59,904 AA+ 2% 58,819

10

16

4

Toyota Motor Corp Japan 55,285 AAA- 30% 42,546

 

2016 brand values are calculated in USD with a valuation date of 1/1/16. 

Brand Finance calculates the values of the brands in its league tables using the ‘Royalty Relief approach.’ This approach 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 the brand, i.e. what the owner would have to pay for the use of the brand — assuming it were not already owned.

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