MOUTAI IS THE WORLD’S MOST VALUABLE SPIRITS BRAND AT $43 BILLION SAYS BRAND FINANCE
Brand valuation consultancy Brand Finance says that global spirits labels grew by 6% in value last year and that China’s Moutai baijiu was the most valuable spirits brand globally at $43 billion, well ahead of second placed Wuliangye, at $28.7 billion, also from China.
Brand value is defined by Brand Finance as the net economic benefit that a brand owner would achieve by licensing that specific brand in the open market.
While Wuliangye trails significantly behind Moutai, its brand value has shot up by 12%. In fact, Chinese brands held the top four positions, and six out of the top 10 according to the just-released Brand Finance Spirits 50 report. The highest valued western brand was Hennessy Cognac from LVMH, valued at $5.2 billion and ranked fifth followed by Bacardi Rum, valued at $3.1 billion and ranked seventh. Jack Daniels (ninth) and Johnnie Walker (tenth) completed the western line-up in the top 10.
Financial results this year from leading players such as Johnnie Walker owner, Diageo and others, suggest that the post-Covid world for spirits is looking reasonably bright. Alex Haigh, Brand Finance managing director, commented: “Over the course of the pandemic, alcoholic brands have been faced with difficult conditions including fluctuating demand due to national lockdowns across the world. The reopening of the economy has driven major growth in the sector with spirits brands growing by 6% year-on-year.”
Aspirational and market-dominating
Moutai retained the coveted top place though its valuation of $42.9 billion was down by 5%, possibly a reflection of the recurrence of sporadic lockdowns in China’s domestic market. However, the spirit continues to be an aspirational and market-dominating product in China.
Brand Finance noted: “The brand has been adept in supplying its product to Chinese customers by leveraging its Moutai mobile application which has over 10 million users for online payments and e-commerce fulfilment. The app also allows consumers to purchase in new and engaging ways.”
Like many top names, Moutai relies heavily on seasonal sales during the Lunar New Year and China’s Mid-Autumn Festival, with lower revenue expected in the summer months. Recently, the brand expanded its product range to meet the preferences of a younger demographic in China. Moutai has also moved into the novel area of alcoholic ice-cream parlours in Guizhou Province in partnership with Mengniu Dairy, one of the largest diary brands in China, which has proved to be quite popular.
Spirits power players
In addition to brand value, Brand Finance determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Using these parameters, Wuliangye is the world’s strongest spirits brand with an elite AAA brand rating and a Brand Strength Index (BSI) score of 89.4 out of 100 (see chart below).
Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 100,000 respondents in more than 35 countries and across nearly 30 sectors.
As well as being the strongest baijiu brand in the world, Wuliangye has also achieved the largest increase in brand value growth among the top five most valuable baijiu brands in the new ranking, while competitor, Moutai, has decreased.
Wuliangye has been on an internationalisation effort on behalf of the baijiu sector and has made this part of its corporate brand messaging strategy. The move is aligned to China’s successful Belt and Road initiative which includes engaging in international events including trade expos, the World Economic Forum in Davos and the Boao Forum for Asia, to name just a few.
Biggest growers: George Clooney’s Casamigos
New entrant in the Spirits 50 report, Casamigos Tequila, is the fastest-growing spirits brand, almost tripling in brand value last year: up 177% to $450 million. George Clooney’s brand was sold to UK-based drinks giant Diageo in 2017 for around $1 billion and has been on the up ever since, helped by surging demand for tequila.
Casamigos has not just ridden the tequila wave, but been at its crest, doubling sales this year. The brand has also announced plans to invest over $500m to expanding production capabilities in Mexico, with the increased investment expected to assist in securing further growth for the brand in coming years.