AlcoholicBeverages2017 The annual report on the world’s most valuable alcoholic beverages brands Foreword Contents wasted resources and a negative impact on thebottom line. ForewordDefinitionsMethodologyExecutive Summary - Spirits 50Full Table - Spirits 50 (USDm) Brand Finance bridges the gap between themarketing and financial worlds. Our teams haveexperience across a wide range of disciplinesfrom market research and visual identity to taxand accounting. We understand the importanceof design, advertising and marketing, but wealso believe that the ultimate and overridingpurpose of brands is to make money. That iswhy we connect brands to the bottom line. Byvaluing brands, we provide a mutually intelligiblelanguage for marketers and finance teams.Marketers then have the ability to communicatethe significance of what they do and boards canuse the information to chart a course thatmaximises profits. Without knowing the precise, David Haigh, CEO, Brand Finance What is the purpose of a strong brand; to attractcustomers, to build loyalty, to motivate staff? Alltrue, but for a commercial brand at least, the firstanswer must always be ‘to make money’. Hugeinvestments are made in the design, launch andongoing promotion of brands. Given theirpotential financial value, this makes sense.Unfortunately, most organisations fail to gobeyond that, missing huge opportunities toeffectively make use of what are often their mostimportant assets. Monitoring of brandperformance should be the next step, but isoften sporadic. Where it does take place itfrequently lacks financial rigour and is heavilyreliant on qualitative measures poorly Brand Finance’s recently conducted share pricestudy revealed the compelling link betweenstrong brands and stock market performance. Itwas found that investing in the most highlybranded companies would lead to a returnalmost double that of the average for the S&P500 as a whole. Acknowledging and managing a Definitions Branded Business Value Brand Contribution Brand Value Brand Strength Brand Strength is the part of our analysis mostdirectly and easily influenced by thoseresponsible for marketing and brandmanagement. In order to determine thestrength of a brand we have developed the In the very broadest sense, a brand is the focusfor all the expectations and opinions held bycustomers, staff and other stakeholders aboutan organisation and its products and services.However, when looking at brands as business A brand should be viewed in the context of thebusiness in which it operates. For this reasonBrand Finance always conducts a BrandedBusiness Valuation as part of any brand The brand values contained in our leaguetables are those of the potentially transferablebrand asset only, but for marketers and Brand Contribution represents the overall upliftin shareholder value that the business derives Brand Finance helped to craft the internationallyrecognised standard on Brand Valuation, ISO10668. That defines a brand as “a marketing-related intangible asset including, but not limitedto, names, terms, signs, symbols, logos anddesigns, or a combination of these, intended to In the more usual situation where a companyowns multiple brands, business value refers tothe value of the assets and revenue stream ofthe business line attached to that brandspecifically. We evaluate the full brand valuechain in order to understand the links between Following this analysis, each brand is assigneda BSI score out of 100, which is fed into thebrand value calculation. Based on the score,each brand in the league table is assigned arating between AAA+ and D in a format similarto a credit rating. AAA+ brands are Brands affect a variety of stakeholders, not justcustomers but also staff, strategic partners,regulators, investors and more, having asignificant impact on financial value beyond Understand Your Brand’s Value Methodology League Table Valuation Methodology Brand Finance calculates the values of thebrands in its league tables using the‘Royalty Relief approach’.This approachinvolves estimating the likely future sales that areattributable to a brand and calculating a royalty 2Determine the royalty rate range for the respectivebrand sectors. This is done by reviewingcomparable licensing agreements sourced from 3Calculate royalty rate. The brand strength score is applied to the royalty rate range to arrive at a royaltyrate. For example, if the royalty rate range in abrand’s sector is 1-5% and a brand has a brandstrength score of 80 out of 100, then an appropriate The steps in this process are as follows: 1Calculate brand strength on a scale of 0 to 100based on a number of attributes such as emotionalconnection, financial performance and sustainability,among others. This score is known as the Brand 4Determine brand specific revenues estimating a 5Determine forecast brand specific revenues using a Strength Index, and is calculated using brand datafrom the BrandAsset® Valuator database, theworld’s