Brand Finance has announced that L`Oréal Paris has topped its

034 SPC0415 top 50JW_spc feature template 13/05/2015 09:45 Page 34
brandstop 50
GLOBAL
TOP 50
BRANDS
2015
Brand Finance has announced that L’Oréal Paris has
topped its influential 50 Most Valuable Cosmetics
Brands beauty league table for the second year running.
SPC and Brand Finance analyse the winners, losers,
movers and shakers in 2015
This year marks the fifth anniversary
of the 50 Most Valuable Cosmetics Brands
league table, calculated by leading brand
valuation consultancy Brand Finance and
brought to you by SPC. Over the last
half-decade, cosmetics and toiletries has
shown itself to be one of the most resilient
industries around, with beauty brands
commanding high levels of recognition,
admiration and loyalty among consumers.
“Cosmetics and apparel are two
extremely highly branded industries, so it
goes without saying that the big names in
beauty have very strong brand values,
whereas something like a utilities or
logistics company would have less,”
comments Richard Haigh, Valuation
Director at Brand Finance plc. “There is
more choice in clothes and cosmetics, so
you need to be that much
better than your competition.”
Brand Finance calculates
brand value through the
royalty relief methodology,
which determines the value a
company would be willing to
pay to licence a brand as if it
did not own it; full details of
this methodology can be
found on p38.
“If, from last year to this year, there has
been a very significant revenue rise, we
reflect that in our brand valuation. The
market might not yet have cottoned on to
the fact that revenues are rising
and the brand is strengthening,
so the share value might have
flattened, but chances are it
will start taking off again,”
explains Brand Finance’s
Founder and CEO,
David Haigh.
This year, the top 50
companies combined boasted
a brand value of just under
L’ORÉAL PARIS: TOP HONOURS
L’Oréal Paris has defended its position at
the top of the 50 Most Valuable
Cosmetics Brands ranking in 2015. This is
perhaps unsurprising as L’Oréal Paris
operates in most beauty categories and
across all continents worldwide. Indeed,
globally, a staggering 50 L’Oréal Paris
products are sold per second.
In the last 12 months, L’Oréal Paris’
colour cosmetic launches – including Miss
Manga mascara and two-step Infallible
Nail Polish – helped propel make-up to
the number one category in the L’Oréal
Consumer Products division. The brand’s
iconic hair care sub-brand Elseve/Elvive
34 SPC April 2015
also enjoyed investment.
Following the success of its
Extraordinary Oil, it launched a
full spin-off range last year,
already claimed to be a ‘pillar’
of the brand.
L’Oréal Paris continues to
cater for a diversity of
consumer demographics, for
example, by launching
Revitalift V-Shaper, which
promises to create the ‘vshaped’ jawline popular among
Asian women, and appointing
69-year-old Dame Helen
Mirren as an ambassador.
Perhaps the most
audacious move by L’Oréal
regarding its flagship brand
was the launch of Makeup
Genius, a digital beauty
innovation based on “the
best possible algorithm
capable of producing an
extremely realistic
colour-rendering in real
time”, which lets consumers
test make-up using their
mobile phone or tablet as a
virtual mirror.
034 SPC0415 top 50JW_spc feature template 13/05/2015 09:45 Page 35
top 50brands
L’ORÉAL BRANDS
Brand
L’Oréal Paris
Garnier
Lancôme
Maybelline
The Body Shop
L’Oréal (Corporate)
Vichy
Biotherm
Total
BRAND RATING DEFINITIONS
TOP TEN
WINNERS
US$
2015brand value
11,218
4,630
3,984
2,814
1,278
1,262
1,225
704
27,114
US$122.57bn, 13.2% higher than in 2014
and an enterprise value totalling
$424.14bn.
The consultancy also allocates a brand
rating, which benchmarks the strength, risk
and future potential of a brand relative to
its competitors, in a manner similar to a
credit rating.
“To be a AAA+ brand, the brand has to
be excellent across all measures,” says
R Haigh. “Their owners have to be
investing in them; they have to have
created that bond with consumers; they
have to have impressed financial audiences;
external audiences have to be happy that
they are fulfilling their CSR
responsibilities; and staff have to enjoy
working for them. Then they have to be
generating the financial return that you
Brand rating
AAA
AA
A
BBB–B
CCC–C
DDD–D
L’Oréal Paris
Clarins
Natura
Gillette
Kanebo
Chanel
Sulwhasoo
Rexona
Kosé
L’Oréal
(Corporate)
Strength
Extremely strong
Very strong
Strong
Average
Weak
Failing
to being AAA+, but they are just not quite
there yet, especially when you consider it is
done on a benchmark scale. We [Brand
Finance] cover 26 industries and we have
only rated 12 brands AAA+.
L’Oréal Paris, Clarins and Natura enjoyed the
greatest value leap (US$) in brand value in 2015,
while Sulwhasoo, Kosé and Clarins were the
biggest ‘risers’ by percentage
would want a brand to be doing, that
would be creating a strong profit margin,
allowing the brand to have an excellent
growth forecast. You have to have those
three elements: the input, the equity and
the output.”
The beauty top 50 contains an
impressive total of 23 ‘triple A’ rated
brands, one of which (L’Oréal Paris) is
rated AAA+. That said, R Haigh adds: “A
lot of the ‘triple A’ beauty brands are close
VIEW FROM THE TOP
For the second year running, L’Oréal Paris
has taken poll position with a brand value
in 2015 of $11.22bn, ahead of the second
placed brand, Gillette, by a $2.23bn
margin. Its brand value increased 15%
compared with 2014, while its enterprise
value remained more or less level at
$32.21bn. It is also the only AAA+ rated
brand in the beauty sector, putting it
among the likes of Lego, Rolex, Ferrari
and Red Bull.
D Haigh describes parent company
L’Oréal as “a powerhouse of creating
brands and supporting brands”, noting that
L’Oréal Paris in particular has benefited
from the Bettencourt family’s constructive
TOP 20 GLOBAL BEAUTY BRANDS 2015
No No No No No Brand
‘15 ‘14 ‘13 ‘12 ‘11
Parent company
Domicile
Brand Brand Enterprise Brand/
BV
EV Brand Brand Brand Brand
value rating
value enterprise chnge chnge value value value value
2015 2015
value (%)
2014 2013 2012 2011
1
1
L’Oréal Paris
L’Oréal
France
11,218 AAA+
32,210
35%
15%
0%
9,763 8,696 7,744 7,630
2
New
Gillette
Proctor & Gamble
US
8,988
AAA
20,778
43%
7%
-5%
8,409 7,245 7,806 7,784
3
5
7
Dove
Unilever PLC
UK
5,821
AAA-
12,674
46%
-1%
2%
5,885 4,242 5,045 4,517
4
3
11 12 13 Pantene
Proctor & Gamble
US
5,364
AAA
16,896
32%
-13%
-5%
6,163
5
4
4
Beiersdorf
Germany
5,322
AAA
14,820
36%
-12%
-8%
6,079 5,843 5,574 6,569
AAA-
1
3
5
4
5
Nivea
5,974 2,643 2,545
6
13 13 18 16 Chanel
Chanel
France
4,921
N/A
N/A
9%
7
7
9
Estée Lauder Companies
US
4,792 AAA-
10,901
44%
4%
1%
4,589 3,870 3,716 3,037
8
9
6
9
15 16 14 Garnier
1 1 1 Olay
L’Oréal
Proctor & Gamble
France
US
4,630 AAA
3,986 AAA-
14,350
13,816
32%
29%
-4%
-2%
-14%
-5%
4,809 2,632 2,340 2,493
4,083 3,955 11,756 11,067
10 8
5
6
7
Lancôme
L’Oréal
France
3,984 AAA-
9,974
40%
-3%
-14%
4,088 5,508 5,095 5,685
11 2
6
2
2
Avon
Avon Products
US
3,897
AA+
7,611
51%
-39%
-33%
6,384 5,169 7,901 10,171
12 10 23 29 28 Johnson’s
Johnson & Johnson
US
3,591
AAA
14,900
24%
0%
8%
13 15 18 19 19 Clarins
Clarins
France
3,550
AA+
N/A
N/A
36%
14 17 21 17 17 Natura
Natura Cosméticos
Brazil
3,220 AAA-
7,651
42%
31%
-25%
France
3,051
AAA
3,965
77%
33%
187% 3,329 3,329 2,540 2,114
8
9
15 11 12 14
Estée Lauder
Christian Dior LVMH Moet Hennessy
Louis Vuitton
4,509 2,813 2,292 2,283
3,603
1,513
1,148 1,179
2,602 2,375 2,018 2,057
2,465 1,849 2,332 2,274
16 14 17 20 23 Maybelline
L’Oréal
France
2,814
AAA
11,067
25%
-4%
-14%
2,921 2,398 2,016 1,568
17 12 11
Proctor & Gamble
US
2,577
AA+
9,447
27%
-13%
-5%
2,953 3,138
2,507 2,203 2,907 2,973
47 Head &
Shoulders
18 16 19 10 11 Shiseido
Shiseido Co
Japan
2,353
AA+
4,351
54%
-6%
-2%
19 18 2
Neutrogena
Johnson & Johnson
US
2,122
AAA
7,201
29%
-8%
8%
2,313
Palmolive
Colgate-Palmolive
US
1,997
AA+
13,397
15%
8%
-1%
1,850
20 New
4
6
394
2,127 6,248 6,350
All the figures are shown in US$m
April 2015 SPC 35
034 SPC0415 top 50JW_spc feature template 13/05/2015 09:46 Page 37
top 50brands
approach to reinvestment. “One thing
about L’Oréal is that, although it is floated,
it is very highly controlled by the
Bettencourts and the Bettencourts have
always taken the view that ‘we are not out
to maximise profits, we are out to
maximise long term value’. They have
always had an exceptionally high
GILLETTE: THE BEST A MAN CAN GET
The brand with the second highest brand value this year is
P&G-owned Gillette, valued at $8.99bn. “We didn’t include
Gillette in last year’s ranking, but looking at the value last year
compared with this year, it would have come in second had we
included it in 2014,” says R Haigh. “It has been a very valuable
brand for some time. It makes very good products and has
been around for years, so everyone knows what to expect
when they buy a Gillette product.”
This evaluation is supported by a Gillette spokesman, who
tells SPC: “Gillette has been in business for well over 100 years
and over this time has built a longstanding relationship with
men. This relationship is built on trust for the performance and
quality of our products... every day, all over the world more
than 800 million men shave with Gillette.”
2014 was a big year for Gillette, which continued its
longstanding association with football during the World Cup,
using ambassadors including Lionel Messi and Joe Hart. This
was then followed by the relaunch of its #byahair marketing
campaign. It also partnered with McLaren Mercedes, drawing
comparisons between the precision engineering of Formula 1
cars with that of its Fusion ProGlide razor.
P&G BRANDS
Brand
Gillette
Pantene
Olay
Head & Shoulders
Clairol
SK-II
Cover Girl
Max Factor
Old Spice
Wella
2015brand value
8,988
5,364
3,986
2,577
1,298
1,205
1,192
1,115
903
827
TOP 21- 50 GLOBAL BEAUTY BRANDS 2015
No No No No No Brand
‘15 ‘14 ‘13 ‘12 ‘11
Parent company
21 21 28
Rexona
Domicile
Brand Brand Enterprise Brand/
BV
EV Brand Brand Brand Brand
value rating
value enterprise chnge chnge value value value value
2015 2015
value (%)
2014 2013 2012 2011
Unilever
UK
1,838
AA+
7,186
26%
18%
2%
1,563
22 20 22 23 22 L’Occitane
L’Occitane International
China
1,818
AAA-
3,405
53%
16%
2%
1,570 1,698 1,611 1,705
23 19 25
M.A.C
Estée Lauder Companies
US
1,776
AA+
4,193
42%
8%
1%
1,639
24 22 16 11
Schwarzkopf
Henkel
Germany
1,630
AAA-
4,656
35%
7%
0%
1,517
25 31
Kanebo
Kao Corp
Japan
1,585
AA+
4,205
38%
36%
26%
1,163
26 26
Sunsilk
Unilever
UK
1,446
AA+
5,705
25%
17%
2%
1,232
27 30 24
Lux
Unilever
UK
1,377
AA+
5,379
26%
18%
2%
1,169
28 New
Clairol
Proctor & Gamble
US
1,298
AA+
6,666
19%
7%
-5%
1,213
29 23 36 33 35 The Body Shop L’Oréal
France
1,278
AAA-
3,327
38%
-16%
-31%
1,514
30 1
L’Oréal
France
1,262 AAA+
91,451
1%
26%
143% 1,002
31 29 30 28 32 Vichy
L’Oréal
France
1,225
AAA-
3,096
40%
4%
-14%
1,173
32 28
SK-II
Proctor & Gamble
US
1,205
AA+
3,737
32%
2%
-5%
1,177
33 25
Cover Girl
1
3
4
L’Oréal
(Corporate)
1,183
1,752
2,420 2,682 2,904
902
1,135 1,410
1,501 2,541 2,797
1,063
977
890
1,170
1,172 1,036
Proctor & Gamble
US
1,192
AA+
4,522
26%
-4%
-5%
1,242
34 33 39 37 41 Clinique
Estée Lauder Companies
US
1,120
AA+
1,957
57%
4%
1%
1,077
885
790
683
35 27 34 42 39 Rimmel
Coty Inc
US
1,118
AA
2,793
40%
-6%
3%
1,188
1,109
615
694
36 32
Proctor & Gamble
US
1,115
AA+
4,218
26%
-3%
-5%
1,144
Max Factor
37 24 31 25 27 Oriflame
Oriflame Cosmetics
Luxembourg
1,038
AA+
1,545
67%
-25%
-31%
1,388
1,151
1,310 1,204
38 35 10 9
Kao Corp
Japan
1,007
AA+
1,833
55%
4%
26%
964
792
3,336 3,014
561
922
6%
-5%
853
439
39
10 Bioré
43 34 43 Revlon
Revlon Inc
UK
903
AA
2,780
32%
Proctor & Gamble
US
903
AAA-
3,295
27%
Proctor & Gamble
US
827
AA+
4,197
20%
AmorePacific
South Korea
807
AA-
2,161
37%
84%
112%
Unilever
UK
785
AA+
3,215
24%
13%
2%
696
44 37 29 26 26 Biotherm
L’Oréal
France
704
AAA-
1,870
38%
-10%
-14%
778
45 40
Pola
Pola Orbis Holdings
Japan
677
AA
1,183
57%
6%
17%
638
46 48 48 45
Kosé
Kosé Corp
Japan
677
AA
1,709
40%
68%
75%
Kering
France
612
AA-
1,929
32%
-41%
29%
-14%
8%
710
2,196 1,990 1,959
0%
3%
560
562
40 36
Old Spice
41 New
Wella
42 44
Sulwhasoo
43 39
Pond’s
47 34 35 35 37 Yves Saint
Laurent
48 38 20 21 21 Clean & Clear Johnson & Johnson
US
609
AAA-
1,839
33%
49 New
Hera
AmorePacific
South Korea
602
AA-
1,678
36%
50 41 42 47
Coty
Coty Inc
UK
559
AA
1,150
49%
402
1,174
452
1,030 1,092
656
1,277 1,393
473
915
409
872
336
All the figures are shown in US$m
April 2014 SPC 37
034 SPC0415 top 50JW_spc feature template 13/05/2015 09:46 Page 38
brandstop 50
advertising and marketing to sale ratio, so if
they made a bit of extra profit they are just
as likely to pump it back into extra
advertising as they are to pay a dividend,”
he says. “Although you don’t make so
much profit this year if you keep
reinvesting it, it keeps growing and
growing and growing, and you get bigger
and bigger and bigger over the years.
Gradually, quietly you get very big.
Whereas if you are still stripping out all
available profit and paying dividends, well
you can stay big, but you’re not giving
yourself extra growth, are you?”
PROUD PARENTS
L’Oréal owns a total of eight brands
included in the beauty top 50, including
Garnier, Lancôme, Maybelline, The Body
Shop, Vichy and Biotherm, with La
Roche-Posay just falling short of the table
at number 51. Moreover, recent months
have seen L’Oréal on the acquisition trail.
Jean-Paul Agon, L’Oréal’s Chairman and
CEO, described 2014 as a “year of
transformation for L’Oréal”, during which
the company has made several strategic
acquisitions, including China’s Magic
UNILEVER BRANDS
Brand
Dove
Rexona
Sunsilk
Lux
Pond’s
2015brand value
5,821
1,838
1,446
1,377
785
ESTÉE LAUDER BRANDS
JOHNSON & JOHNSON BRANDS
Brand
Estée Lauder
M.A.C
Clinique
Brand
Johnson’s
Neutrogena
Clean & Clear
2015brand value
4,792
1,776
1,120
2015brand value
3,591
2,122
609
BRAND VALUATION METHODOLOGY
The valuation in the Brand Finance
beauty brands puts a value on the
intangible assets of a certain company,
namely its ‘trademarks, logos and
associated intellectual property’ on a
specific date: 1 January 2015.
The royalty relief approach
Brand Finance calculates brand value
using the royalty relief methodology,
which determines the value a company
would be willing to pay to license its
brand as if it did not own it. This
approach involves estimating the future
revenue attributable to a brand and
calculating a royalty rate that would be
charged for the use of the brand. The
steps in this process are as follows:
1. Calculate brand strength on a scale of
0-100 based using a balanced scorecard
of a number of relevant attributes such
as emotional connection, financial
performance and sustainability, among
others. This score is known as the brand
strength index.
2. Determine the royalty rate range for
the respective brand sectors. This is
done by reviewing comparable licensing
agreements sourced from Brand
Finance’s extensive database of licence
agreements and other online databases.
3. Calculate royalty rate. The brand
38 SPC April 2014
strength score is applied to the royalty
rate range to arrive at a royalty rate. For
example, if the royalty rate range in a
brand’s sector is 1%-5% and a brand has
a brand strength score of 82 out of 100,
then an appropriate royalty rate for the
use of this brand in the given sector will
be 4.1%.
4. Determine brand-specific revenues
estimating a proportion of parent
company revenues attributable to each
specific brand and industry sector.
5. Determine forecast brand-specific
revenues using a function of historic
revenues, equity analyst forecasts and
economic growth rates.
6. Apply the royalty rate to the forecast
revenues to derive the implied royalty
charge for use of the brand.
7. The forecast royalties are discounted
post tax to a net present value which
represents current value of the future
income attributable to the brand asset.
Why use the royalty relief approach?
The royalty relief approach is used for
three reasons:
● It is favoured by tax authorities and
the courts because it calculates brand
values by reference to documented third
party transactions
● It can be done based on publicly
Holdings, colour cosmetics brand NYX,
Decléor, Carita and Brazilian hair care
brand Niely, to complement its brand
portfolio in key categories and regions of
the world.
However, Procter & Gamble (P&G)
takes the crown as the conglomerate with
the greatest number of beauty brands listed,
namely Gillette, Pantene, Olay,
Head & Shoulders, Clairol, SK-II,
Cover Girl, Max Factor, Old Spice
and Wella.
P&G’s brands are also, collectively, the
most valuable brands in the top 50,
totalling $27.46bn, compared with L’Oréal’s
$27.11bn. Moreover, P&G’s pledge to shed
up to 100 ‘outlying’ brands globally in
mid-2014 (thus far, these have included
soap brand Camy and most of its Zest soap
business) means the company will be freer
to speed up growth of its core brands,
so we could see some of P&G’s big names
in beauty creeping further up the rankings
in future years.
Another brand owner poised to storm
the table in 2016 is South Korea’s
AmorePacific. Although there are only two
AmorePacific-owned brands in the top 50
available financial information
● It is compliant with the requirement
under the International Valuation
Standards Authority and ISO 10668 to
determine the fair market value of
brands.
Brand Finance was one of the first
companies in the world to be accredited
to provide ISO 10668 compliant brand
valuations. The ISO 10668 global
standard provides a consistent, reliable
approach to brand valuation that
emphasises transparency and
objectivity.
Valuers must take all relevant
financial, behavioural and legal
information into consideration. In order
to make its valuations of the world’s
top brands ISO 10668 compliant, Brand
Finance uses data from a range of
partners, including: Havas, BAV
Consulting, Alexa, Bloomberg,
Meltwater, VI360, CSR Hub and
Novagraaf.
Brand ratings
These are derived from the Brand
Strength Index, which benchmarks the
strength, risk and future potential of a
brand relative to its competitors on a
scale ranging from D to AAA. It is
conceptually similar to a credit rating.
034 SPC0415 top 50JW_spc feature template 13/05/2015 09:46 Page 41
top 50brands
At number six, Chanel
is the highest placed
luxury brand in the
top 50 2015
NEW ENTRANTS
8,988*
1,997*
1,298*
Gillette
Palmolive
Clairol
*Brand value. All the figures are shown in US$m
at present (Sulwhasoo at 42 and Hera at
49), there are two more just outside of the
top 50 ranking (Laneige at 55 and
Mamonde at 58).
“The whole of AmorePacific has been
doing exceptionally well this year,”
R Haigh tells SPC. “The largest percentage
risers are the South Korean brands; they are
further down or just off the table, but they
are rising well.” Indeed, when it comes to
percentage change, skin care brand
Sulwhasoo’s brand value shot up by 85%
between 2014 and 2015, an increase of
$368m, which also puts it among 2015’s
top ten growth brands by US$.
MASS VS LUXE
The highest ranking brands on 2015’s list
are, apart from Chanel and Estée Lauder,
either mass market or masstige.
Unilever-owned Dove is third,
while P&G’s Pantene and
DROPOUTS
473*
454*
430*
Elizabeth Arden
TRESemmé
Clear
*Brand value. All the figures are shown in US$m
Beiersdorf-owned Nivea take the fourth
and fifth spots, respectively.
“The highest ranked British brand is
Dove,” notes R Haigh. Commenting on
Dove, Pantene and Nivea, he adds: “It’s a
comfort thing. You know what you’re
getting; you know you’re going to be using
it every day; you know it’s worth paying
CLARINS: A FAMILY AFFAIR
Clarins, like L’Oréal Paris, reaped the
rewards of family involvement. The
brand, which celebrated its 60th birthday
last year, saw its brand value increase by
36% ($948m) compared with 2014,
taking it to number 13 in 2015’s ranking.
“Its business performance this year and
the expectations for its growth are just
enormous,” says R Haigh. “I was
surprised at the extent of Clarins’ growth
and people’s expectations of it.”
Groupe Clarins is run by Olivier and
Christian Courtin-Clarins (sons of founder
Jacques Courtin-Clarins), and by Philip
Shearer, who joined in 2008. Virginie,
Claire, Jenna and Prisca Courtin-Clarins,
the daughters of the Courtin-Clarins
brothers, have been on the group’s
Supervisory Board since 2010, and are
said to embody “renewal and continuity”.
The group also has a notoriously
strong CSR drive, as recently evidenced
by its new headquarters in the 17th
arrondissement of Paris, which benefits
from low power consumption resulting in
energy savings of 30%.
Analysing NPD, the label was an early
adopter of facial oils, launching
revitalising Blue Orchid, hydrating Santal
and purifying Lotus facial oils in early
2012, and since then it has remained at
the forefront of trending skin care
formats and claims. Recent launches
included Instant Light Lip Comfort Oil,
a lip treatment product in an innovative
non-greasy oil format, and UV Plus
Anti-Pollution Day Screen, which provides
SPF50 protection and answers consumer
demand for ‘urban shield’ products –
a predominantly Asian trend that has
now gone global.
that little bit extra to get the product that
you want. It’s like when you go to the
supermarket and buy baked beans, you’d
buy Heinz. It’s that sort of decision making
process; you’re going to pay that little bit
extra to get your favourite everyday item.”
Unilever may have been banking on
consumers’ willingness to pay that bit more
for quality when it launched its first
premium lines in 2014, introducing the
dermatologist-developed Dove
DermaSeries; five-sku shave regimen Dove
Men+Care Expert Shave; underarm dark
mark eraser Dove True Tone; and the Dove
Advanced Hair Series, a collection of three
new premium hair care ranges to suit a
variety of hair needs.
At number six, Chanel is the highest
ranked luxury brand, valued at $4.92bn.
While 2015 marks the first time that
Chanel appears in the table’s top ten,
R Haigh notes that its dramatic increase in
rank is slightly artificial. “In the valuation
last year we understated their revenues.
That said it would have increased anyway,”
he notes. “It is one of the go-to luxury
brands – universally known and admired as
a very cool, chic brand.”
The French luxury brand is certainly
continuing to invest in its cosmetics
business, with the launch of a new French
‘e-shop’ (www.chanel.com/fr_fr), stocking
the firm’s whole range of perfumes, skin
care products and make-up, in September,
and a rumoured production facility based
in the Compiègne area of France in the
pipeline, according to French newspaper
the Courrier Picard.
Analysing the progress of brands across
April 2014 SPC 41
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top 50brands
the top 50’s five-year life, R Haigh notes
that Garnier has done particularly well,
rising from 14th place in 2011’s edition to
eighth place this year. Pantene, which has
progressed from 13th to fourth place, was
also singled out for mention.
As R Haigh explains: “It is the mass
market brands that people are used to
buying day-in, day-out that don’t
necessarily go in and out of favour, and
they retain that brand loyalty. It is
something that people will always be able
to afford when they go to shops, rather
than something on which they might
occasionally splash out. Discretionary
purchases are the ones that are at the mercy
of economic fluctuations.”
DOWN AND OUT
Most of the brands breaking into the top 50
for the first time – Gillette, Palmolive,
Clairol, Revlon and Wella – are included
either as a result of Brand Finance
expanding its definition of ‘beauty’ to
include traditionally hardware-oriented
brands (as in the case of Gillette), or because
of more comprehensive data breakdown
WINNERS & LOSERS
Change in brand value (US$)
C
(3000) (2500)(2000) (1500) (1000) (500)
L’Oréal Paris
0
500 1000 1500 2000
Natura
Kanebo
Sulwhasoo
Kosé
Garnier
The Body Shop
Oriflame
Nivea
Avon
from parent companies. However, several
notable names dropped off the table in
2015. Elizabeth Arden was the most notable
‘dropout’, sliding from 42nd position in
2014 to 59th in 2015, the result of a 15%
drop in brand value.
“Elizabeth Arden has had a terrible year
for its fragrances,” explains R Haigh. “The
only exception is the Britney Spears line,
which has taken on a life of its own,
AVON: TOUGHING IT OUT
It has been an annus horribilis for Avon, which is suffering from
a crisis in its formerly core US market (in Q4 2014 its North
America beauty sales declined 10%). “It [Avon] is very sort of
1960s, mumsy and midwest,” comments D Haigh. “Avon is a
Mad Men brand that hasn’t progressed since Mad Men times”.
In order to focus more fully on its US business, Avon
continues to cut jobs globally in a bid to make $400m in cost
savings by 2016. Recently, this has included an end to
operations across 16 Caribbean nations and jobs cuts in
Canada. In 2014, Avon was hit on two fronts when Executive
Vice President and Chief Financial Officer Kimberly Ross
resigned in October, then December saw Avon’s China business
slapped with a $135m fine following a
six-year anti-bribery case,
estimated to have cost the
company $300m in
legal fees.
As such, it is little
surprise that Avon slid down
this year’s rankings, dropping
from second to 11th place.
That said, it hasn’t all been
bad news for the company, which
is branching out of its classic
direct sales retail model.
At the end of 2014,
Avon opened its first
standalone store in Warsaw,
Poland, called The Avon
Studio as part of its
multichannel strategy
in Central Europe.
Elizabeth Arden has
been hit by a slump in
demand for its
celebrity fragrances,
including those in its
Justin Bieber portfolio
irrespective of Britney herself. It’s a brand in
its own right.” Commenting on the brand’s
beleaguered Justin Bieber fragrance line, he
adds: “Because Justin Bieber is so fresh in
everyone’s mind, people are probably
growing out of it and are embarrassed about
their affections towards him. Or parents just
aren’t buying his fragrances for their
children any more because they think he’s a
bad role model. They [Arden] put all their
eggs in one basket and someone dropped it.
They would have dropped out of the top 50
even if others hadn’t moved up.”
Arden also identified its China operations
as a problem area, but recently said that it
was “making tough decisions [in China] in
support of a new distribution strategy to
drive a healthier and more profitable
business”.
For the fiscal quarter ended
31 December, Arden recorded a net sales
decrease of 17.2% with a net loss per
diluted share of $1.90. And although it
doesn’t predict that its North America
celebrity fragrances business will rally any
time soon, it did say it expected to see net
sales increases in the international segment
in the second half of fiscal 2015, compared
with the prior year.
TOP TEN
LOSERS
US$
Avon
Pantene
Nivea
Yves Saint Laurent
Head & Shoulders
Oriflame
Christian Dior
The Body Shop
Neutrogena
Garnier
April 2014 SPC 43
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brandstop 50
Other brands whose brand value has
dipped in 2015, but which still made the
top 50 are Avon, which has the biggest
value drop ($2.49bn) and Yves Saint
Laurent, which suffered the greatest
percentage loss (41%). The luxury label,
whose beauty business (Yves Saint Laurent
Beauty) is owned by L’Oréal Luxe, has
sustained a brand value blow as a result of a
2012 rebrand by its Kering-run fashion
label, now known as Saint Laurent.
“It is, frankly, confusing,” says R Haigh.
“Fashion and cosmetics are a statement of
identity, and if you don’t know what you
[the consumer] are standing for by aligning
yourself with these brands, that is going to
have a negative impact on your purchasing
decision: whether you want to wear them,
whether you want to buy them. If brands
don’t sort that out, they’re going to lose
potential customers and loyal customers
who are becoming disillusioned.”
Oriflame’s brand value has likewise
dropped – with a decline of 25%, it is third
on the percentage decrease list after Yves
Saint Laurent and Avon. This is likely due
to the negative impact of devaluation of
the rouble in Russia, which represents
around 30% of the Swedish direct sales
company’s total sales. Oriflame, however, is
meeting macroeconomic difficulties by
increasing prices in Russia, to ensure an
income level for for its consultants and to
compensate for currency devaluation, and
next year’s top 50 will reflect whether or
not this move has been successful.
THE KOREAN WAVE
Unsurprisingly, the majority of names in
2015’s table hail from the US (21) or
France (12); although there is only
$10.69bn difference between the total
value of beauty brands in the top 50 from
each country, suggesting that while France
has far fewer companies in the table,
they are high placed ones.
However, a standout finding of 2015’s
top 50 beauty roster is how much pressure
South Korean labels are putting on Western
brands on the lower rungs of the table.
While some established US and European
brands have remained consistently strong,
they are being displaced in the rankings by
those hailing from Asia, which are rapidly
gaining in brand value.
“There are various machinations just
outside of the top 50 and that is where a
lot of the Asian brands are,” says R Haigh.
“South Korea is the country that is
jumping into the table,” he tells SPC.
“It is one of the smallest countries in that
region, yet it is very culturally significant.
K-pop is massive and across Asia, South
Korean culture is as influential as Japanese
44 SPC April 2015
culture used to be.”
AmorePacific brands have been at the
forefront of Asia’s cushion foundation craze
(which is poised for global domination in
coming months) and the company owns
multiple patents for cushion foundation
technology. As Seunghwan Kim, EVP &
Chief Strategy Officer at AmorePacific
Group, tells SPC: “For AmorePacific, 2014
was a great year for cushions, a category we
created in 2008 with the launch of IOPE
Air Cushion. In 2014 we saw our total
global sales of cushions increasing 105%
year-on-year to 26 million units, which
means that an AmorePacific cushion was
sold every 1.2 seconds last year.”
While Kim believes international interest
in South Korean culture has not hurt
AmorePacific’s brands’ performance, he
stresses that the company has worked hard
to boost global awareness of the company
and its businesses. “Recent global interest in
Korean culture may have helped raise initial
awareness of AmorePacific, but we were
able to leverage the trend, retain customers
and induce repurchases only because we
have been building global awareness and
customer trust with our quality products
and services since the early 2000s.”
The highest ranked Asia domicile brand
remains Shiseido in 18th place. However,
this is two places lower than in 2014 and
its brand value has dropped by 6% to
$4.35bn. Indeed, with the exception of
NATURA: LATIN FEVER
Natura Cosméticos, in at number 14 with
a brand value of $3.22bn, is the only
South American brand to make the cut.
“Natura is doing well,” says R Haigh.
“It only jumped up a few places, but in
terms of value it’s up 31% on last year
– there’s a huge appetite for beauty
products in Brazil and Natura is
capturing a chunk of that appetite.
It has become known as the go-to
Brazilian beauty brand.”
This is confirmed by a company
spokesman, who says consumers
recognise Natura as “a brand that
promotes sustainability and reconnection
with nature... and expresses the elegance
of the Brazilian creative fusion”.
2014 marked a strong year for Natura
on several fronts. Firstly, the company
moved its soap factory to the
‘Ecoparque’, a Natura-led complex in
Benevides, Pará, in the Brazilian
Amazon, which was “inspired by the
concept of industrial symbiosis”.
According to the spokesman, the factory
“inaugurates a new way of production –
it promotes and combines sustainability
and the manufacturing of high quality
products from the rich biodiversity of
the Amazon region”.
Sustainability is especially
important for Brazilian
consumers – GfK research has
shown that over half of Brazilian
consumers consider the
environmental impact of
cosmetics when purchasing
beauty products, the highest
for any country – and
sustainability remains a
pillar of Natura. In fact, the
company rounded off 2014
by becoming the largest (and first
publicly traded) company to attain
B Corp sustainability certification.
When it comes to product innovation,
meanwhile, Natura is proving particularly
successful in the fragrance sector,
according to its spokesman.
Among its new perfumes, which Natura
says have been a hit
with consumers, were
Luna, the first Brazilian
chypre, and #urbano,
which won the
IF Design Awards
2015.
Another landmark for
Natura in 2014 was the
start-up of its e-commerce
operation – Rede Natura –
run in co-operation with
Natura representatives.
034 SPC0415 top 50JW_spc feature template 13/05/2015 09:46 Page 47
top 50brands
KAO BRANDS
Brand
Kanebo
Bioré
2015brand value
1,585
1,007
The US is home to 21
of the top 50 global
beauty brands, which
amounted to $49.94bn
in total
BRAND VALUE BY COUNTRY
Total value of brands (US$ millions)
US 49,938
France 39,249
UK 11,268
Germany 6,951
ASIA PACIFIC BRANDS
Japan 6,299
Brand
Shiseido
L’Occitane
Bioré
Sulwhasoo
Pola
Kosé
Hera
Brazil 3,220
Country
Japan
China
Japan
South Korea
Japan
Japan
South Korea
Value
2,353
1,818
1,007
807
677
677
602
China1,818
South Korea 1,409
Luxembourg 1,038
NUMBER OF BRANDS PER COUNTRY
AMOREPACIFIC BRANDS
Brand
Sulwhasoo
Hera
US 21
France 12
2015brand value*
807
602
UK 5
Japan 5
Germany 2
South Korea 2
Kao Corp-owned Kanebo, which jumped
from number 31 in 2014 to 25th in this
year’s table, Japanese brands have not
proved as upwardly mobile as in previous
years. This may be partially due to recent
political disputes between Japan and China
over the ownership of a group of islands
lying between the two countries and the
resulting boycotts of Japanese goods by
consumers in one of Japan’s biggest beauty
export markets.
On the subject of China, D Haigh says
that he would like to see one or more
Chinese beauty brands make it into the top
50 in future. “One of the big stories has
Brazil 1
China 1
Luxembourg 1
been the growth of Chinese brands in the
banking, telecoms and automotive
industries. But it is in the highly branded
industries, like cosmetics and
apparel, and the luxury market
where you don’t see as
many Chinese brands.”
That said, following
L’Oréal’s acquisition of
facial mask specialist Magic Holdings and
with companies the calibre of LVMH (via
L Capital Asia) backing Chinese brands like
skin care player Marubi and sister
brand Haruki, chances are high
that the 50 Most Valuable
Cosmetics Brands league
table won’t be a China-free
zone for too long.
LANEIGE & MAMONDE: ON THE UP
Although it just missed out on being
included among the top 50 beauty
brands in 2015, AmorePacific-owned
Laneige, which was number 55 in the
ranking with a brand value of $487m,
will almost certainly be included in
2016’s listing, according to R Haigh.
The brand, which is based on the
fundamental principle that water is the
key to maintaining youthful and radiant
skin and is best known for its high end
moisturising products, has been at the
forefront of AmorePacific’s expansion
overseas, particularly in the US.
Laneige’s US expansion started in March
2014, with the initial introduction of its
Laneige BB Cushion compact foundation
into 400 Target stores; this
increased to around 750 by
the end of last year.
The brand was first introduced
overseas in Hong Kong in April 2002
and has since expanded to other Asian
markets, including China, Singapore,
Vietnam, Taiwan, Thailand, Malaysia and
Indonesia.
New launches from the brand include
Time Freeze Intensive Cream, which
contains a Dynamic Collagen EX complex
to keep the skin’s collagen from breaking
down, and a reformulated version of its
popular antioxidant essence Clear C
Advanced Effector.
Also nipping on the heels of big names
in the top 50 2015 is
Mamonde, another
AmorePacific brand, which
with a brand value of $450m is
positioned at number 58.
Said to “instil the wisdom of nature
found in flowers”, the brand recently
introduced Age Control Camellia Oil, a
new facial oil, into its age control
collection, claimed to provide moisture
without greasiness. The brand also
enhanced its Pure White range, its most
popular line in the lucrative Chinese
market, with the launch of Mamonde
Pure White Sleeping Pack, which
removes dead skin cells and whitens
skin simultaneously overnight.
April 2015 SPC 47