Top brands could drop $33bn in value due to Covid-19
The world’s most valuable alcoholic drinks brands could cumulatively lose up to US$33 billion in value as a result of the Covid-19 pandemic, according to the latest Brand Finance Alcoholic Drinks report.
Research firm Brand Finance assessed the impact of Covid-19 based on the effect the outbreak has had on enterprise value compared to what it was on 1 January 2020.
According to the report, spirits will be moderately affected by the virus, facing a 10% brand value loss. This was based on the level of brand value loss in the first quarter of 2020.
Of the 10 most valuable spirits brands, six saw their value decline in the report. Yanghe, Bacardi and Johnnie Walker posted the largest declines, 15.4%, 14.2% and 13.2% respectively. The largest gains were for baijiu brands Moutai and Wuliangye, which grew 29.1% and 30.1% respectively.
Chinese spirits brands dominated the top three in the Brand Finance Spirits 25 2020 ranking, with Moutai in first (US$39.3bn), Wuliangye in second (US$20.9bn) and Yanghe in third (US$7.7bn).
Irish giant, Baileys, was the fastest-growing spirit brand, according to the report, posting a 105% brand value growth to US$1.3bn.
Don Julio, which was up 79% to US$958 million, is said to be the world’s strongest spirit brand with a Brand Strength Index score of 88.7 out of 100. In order to determine the index score of a brand, Brand Finance investigates the impact marketing investment and stakeholder equity has on a brand’s performance.
Richard Haigh, managing director of Brand Finance, 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.”