spc feature template

top 50brands
The beauty industry continues to be
one of the most resilient but also one of
the most competitive industries around.
This year marks the publication of the
fourth 50 Most Valuable Cosmetics Brands
league table, calculated by the world’s
leading brand valuation consultancy, Brand
Finance. As ever, the findings are
illuminating.
“As well as calculating brand values, we
also allocate a brand rating,” says David
Haigh, founder and CEO of Brand
Finance plc. “In the list of the top ten
cosmetics brands by rating, they all have
‘triple A’ ratings, which is quite unusual.
You rarely get so many highly rated brands
in one sector. What this shows is that
beauty is a very highly contested sector
involving a lot of brands.
“If you look at banking, insurance or
utilities, there are almost no brands that get
a ‘double A’ status, let alone a ‘triple A’
one.”
But although beauty may be faring
better than many other categories, the
combined brand value of the beauty top
50 has actually decreased since the
publication of the first of Brand Finance’s
top 50 league tables. “In 2011, the
combined brand value of the top 50 brands
was US$117.5bn and in 2014 it is only
$106.1bn,” says Haigh. This proves that the
GLOBAL
TOP 50
BRANDS
2014
L’Oréal Paris has taken top honours in
Brand Finance’s influential league table
50 Most Valuable Cosmetics Brands.
SPC asks ‘where did L’Oréal go right?’
and takes a look at the winners,
losers and newcomers in 2014
L’ORÉAL: POLE POSITION
TABLE 1: ON THE UP
Brand
Garnier
Johnson’s
L’Oréal
Dove
Avon
Estée Lauder
Natura
Maybelline
The Body Shop
Christian Dior
Rise in brand
value (US$m)
2,178
2,089
2,070
1,643
1,215
719
616
524
451
377
TABLE 2: GOING DOWN
Brand
Aveeno
Clean & Clear
Lancôme
Kérastase
Redken
Clearasil
Pola Orbis
Schwarzkopf
Matrix
Sunlight
Decline in brand
value (US$m)
2,450
1,486
1,420
1,261
1,098
998
936
902
799
786
With a brand value of $10.8bn and an AAA+ brand
rating, L’Oréal Paris is currently the strongest brand
within the beauty industry as a whole, according to
Brand Finance. L’Oréal Paris’ brand value/enterprise
value jumped significantly (+29%) in 2014. This, says
Haigh, is the combined result of a good performance
financially (its enterprise value grew from $26.2bn
last year to $37.6bn) and very heavy investment in
NPD, branding and distribution.
“The L’Oréal group invests disproportionately
highly in marketing and branding,” notes Haigh. “It
pays very large amounts of money to well known
stars to endorse L’Oréal and then it puts
substantial amounts of money behind the
advertising, which is done very, very
professionally.”
A major campaign for L’Oréal Paris in 2013 accompanied the
launch of its Color Riche Collection Privée, a range of nude lip and nail colours
designed to suit every skin tone; it involved a line-up of L’Oreal Paris spokesmodels
across a wide range of ages, nationalities and ethnicities, including US actors Jane
Fonda and Julianne Moore, Slumdog Millionaire star Freida Pinto and Chinese actor
Fan Bingbing.
Investment in NPD is evident in recent launches, which offer novel textures and
effects across a range of categories. New lip product L’Extraordinaire By Color Riche,
for example, fuses oils and colour pigments to create a liquid lipstick, while Age
Perfect Extraordinary Facial Oil taps the dual trends for nourishing oils and multitasking products. According to L’Oréal, it can be used on its own, under face cream,
as a face wash, or as a massage oil. It may also be mixed with foundation for added
luminosity.
April 2014 SPC 37
top 50brands
industry cannot always rely on the oft
quoted ‘lipstick effect’ – whereby women
who’ve cut their spend on big ticket items
compensate by treating themselves to
smaller discretionary items, like lipstick,
during leaner periods.
TAKING THE TOP SPOT
Rising above the competition in 2014 is
L’Oréal Paris, which currently occupies the
number one spot with a brand value of
$10.8bn, significantly ahead of Avon, the
second placed brand, which is valued at
$6.4bn.
Analysing Brand Finance’s findings,
Haigh tells SPC that corporate structure
and attitudes to spending are key factors
propelling the brand to the top of the
chart. “The ownership structure of L’Oréal
is unusual in that it is dominated by the
Bettencourt family and they invest heavily
in the long term,” he says. “You can do this
very easily when you are a family
controlled company, because the investors
aren’t looking over your shoulder saying
‘we’d rather you make a 20% return than a
15% return’. If a short term investor is
involved, they’d probably say ‘forget about
putting money into extra advertising, just
make 20%’. The Bettencourt family has
taken the view that ‘this is an asset forever,
TABLE 3: NEW ENTRANTS
TABLE 4: DROPOUTS
Brand
Brand
1 Cover Girl
2 Sunsilk
3 SK-II
4 Kanebo
5 Max Factor
6 Old Spice
7 Pond’s
8 Pola
9 TRESemmé
10 Sulwhasoo
Rise in brand
value (US$m)
1,242
1,232
1,177
1,163
1,144
853
696
638
454
439
and we want to make sure it’s as strong as
possible’. So that is therefore reflected in
growth in brand value.
“L’Oréal invests very heavily in
innovation and the distribution of products
– the stuff which secures ‘the long term’,”
continues Haigh. “The probability is, if it
wasn’t doing this and it was releasing some
of its money back into its profit and loss
account short term, its share price would
probably jump, because its profitability
would jump. But it isn’t looking short
term, and in the long run that would be
bad for the business.
1 La Roche-Posay
2 Kiehl’s
3 RoC
4 Eucerin
5 Speed Stick
6 Revlon
7 Irish Spring
8 Softsoap
9 Sunlight
10 Matrix
Decline in brand
value (US$m)
95
118
251
326
332
478
500
517
786
799
“It’s a very interesting case study of what
works and what doesn’t work.”
Investment by L’Oréal the company in
maintaining the image of L’Oréal the brand
is clearly paying off, according to Haigh.
“In the branding world, people are always
going on about how marketing
departments are systematically deprived of
funds. This is probably true in a lot of
cases – big companies can under invest in
their brands. This is the proof that when
you do it right, you win.
“The other thing is that although it is a
mass brand, it gives the impression of being
GARNIER: ON THE RISE
Garnier, part of L’Oréal’s Consumer
Products Division, exhibited the sharpest
rise in brand value this year of any name
in the top 50 – up by nearly $2.2bn. It
shot to number six on Brand Finance’s
list having been placed 12th last year.
This may be in part attributed to the
popularity of Olia, Garnier’s ammoniafree, at home hair colour product, which
uses oil to boost the hair colouring
process. Reviewing its full year 2013
financial performance, L’Oréal says:
“Garnier recorded double digit growth in
hair colourants, thanks to Olia.”
It also adds: “The brand’s growth in
facial skin care is continuing
with the BB creams.” Garnier
continues to diversify its lineup of BB creams, the most
recent of which was
Garnier BB Cream AntiAgeing Miracle Skin
Perfector, formulated
with Pro-Xylane and
mineral pigments. Other
major launches from the
brand include 5sec Perfect
Blur, a smoothing
correcting primer, and Dark
Spot Corrector, which evens
skin tone while providing 24
hour moisturisation.
L’Oréal recently
announced its intention to
withdraw Garnier from
China, in order to focus
on its leading brands in
that country (L’Oréal
Paris and Maybelline),
but presumably to also
concentrate its Garnier
strategy on those
markets in which the
brand is most likely to
thrive.
April 2014 SPC 39
brandstop 50
quite upmarket. The fact that it is French
and endorsed by major personalities makes
it appear like a very luxurious product.”
L’Oréal, the parent company with the most
valuable brands in the top 50, is expanding
its portfolio via the purchase of Carita and
Decléor
PORTFOLIO BUILDING
The parent company with the largest
number of brands in the top 50 in 2014 is
Procter & Gamble (P&G) with eight
brands making the cut; its Pantene, Olay,
Head & Shoulders, CoverGirl, SK-II, Max
Factor, Old Spice and Rejoice labels all
rank among the biggest brands in the
world. However, the parent
company with the most valuable
brands in the top 50, collectively, is
L’Oréal, with L’Oréal Paris,
Garnier, Lancôme, Maybelline, The
Body Shop, Vichy and Biotherm.
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 2014.
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
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.
40 SPC April 2014
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
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.
Haigh comments: “The total brand
value of those L’Oréal owned brands
in the top 50 is $26bn, whereas those
in P&G’s portfolio [the next largest]
are $18bn and Unilever beauty
brands in the top 50 have an
accumulated value of $12bn.”
Nor does L’Oréal show any sign
of reining in its portfolio building
activities. It recently finalised the
purchase of Shiseido’s Carita and
Decléor brands, and last summer
bought Magic Holdings
International Ltd, providing it
with the top-selling facial mask
brand in China.
MASS APPEAL
Aside from Estée Lauder and
Lancôme, mass brands dominate
the upper echelons of the top 50
2014. As well as L’Oréal Paris and
Avon, there is Pantene, which in third
position is the highest placed brand
operating solely in hair care. Originally
created in Switzerland, Pantene has been
part of the P&G stable since 1985 but “taps
into the same cues that L’Oréal does –
with a French sounding name”, notes
Haigh.
Moreover, Pantene’s premium image is
supported by P&G’s R&D efforts. For
example, at the beginning of this year,
Pantene rolled out a damage blocking
antioxidant technology called EDDS across
most Pantene shampoo formulas. It is
TABLE 5: TOP BRANDS BY BRAND
RATING
Brands
L’Oréal
Maybelline
Garnier
Johnson’s
Lancôme
Chanel
Clinique
Neutrogena
Christian Dior
Biotherm
Brand rating
AAA+
AAA
AAA
AAA
AAA
AAA
AAAAAAAAAAAA-
Source: Brand Finance
BRAND RATING DEFINITIONS
Brand rating
AAA
AA
A
BBB–B
CCC–C
DDD–D
Strength
Extremely strong
Very strong
Strong
Average
Weak
Failing
top 50brands
claimed to reduce copper build-up on hair
to help prevent oxidative damage, for
stronger, healthier hair in the long term.
Other recent developments include the
launch of Pantene’s Damage Detox
Collection, described as the “first to
mass detoxifying shampoo,
conditioner and treatment system”.
Meanwhile, the brand has signed
Brazilian supermodel Gisele
Bündchen as a global ambassador;
Bündchen has represented
Pantene in Brazil since 2007.
Also flying the flag for mass are
Nivea (Beiersdorf) and Dove
TABLE 6: TOP 50 GLOBAL BEAUTY BRANDS 2014
No No No No Brand
‘14 ‘13 ‘12 ‘11
Parent
company
Domicile
Brand Brand Enterprise Brand/ Brand Ent. Brand Ent. Brand Ent.
value rating
value enterprise value value value value value value
2014 2014
value (%) 2013 2013 2012 2012 2011 2011
10,766 AAA+
1
1
3
4
L’Oréal
L’Oréal
France
37,619
29%
2
5
2
2
Avon
Avon Products Inc
USA
6,384
AA
11,382
56%
5,169
3
2
12 13 Pantene
Proctor & Gamble Co/The
USA
6,163
AA+
17,875
34%
5,974 15,211 2,643
7,358 2,545
4
3
5
Beiersdorf AG
Germany
6,079
AA+
16,155
38%
5,843 12,288 5,574
8,522 6,569 10,178
5
Nivea
Dove
8,696 26,205 7,744 22,358 7,630 23,935
8,186 7,901 11,656 10,171 15,843
7,197
5
6
Unilever PLC
UK
5,885 AAA-
12,430
47%
4,242 10,690
6
12 16 14 Garnier
L’Oréal
France
4,809
AAA
16,760
29%
2,632
7,051 2,340
6,016 2,493 6,440
7
8
8
9
Estée Lauder
Estée Lauder Companies-CL A USA
4,589
AA+
10,815
42%
3,870
8,711 3,716
7,387 3,037 5,095
8
4
6
7
Lancôme
L’Oréal
France
4,088
AAA
11,649
35%
5,508 13,467 5,095 11,490 5,685 12,300
9
7
1
1
Olay
Proctor & Gamble Co/The
USA
4,083
AA+
14,617
28%
3,955 12,439 11,756 36,578 11,066 35,777
10 22 29 28 Johnson’s
Johnson & Johnson
USA
3,603
AAA
13,749
26%
1,513
5,026 1,148
1,179
11 10 14
Christian Dior
France
3,329 AAA-
5,298
63%
2,952
4,362 2,540
4,191
8,505
12 9
Christian Dior
USA
2,953
AA-
9,995
30%
3,138
13 11 18 16 Chanel
Chanel
France
2,949
AAA
N/A
N/A
2,813
2,292
14 14 20 23 Maybelline
L’Oréal
France
2,921
AAA
12,925
23%
2,398
7,076 2,016
15 15 19 19 Clarins
Clarins
France
2,602 AAA-
N/A
N/A
2,375
2,018
2,057
16 17
Shiseido Co Ltd
Japan
2,507
AA
4,421
57%
2,203
3,313 2,907
4,339 2,972
17 20 17 17 Natura
Natura Cosmeticos SA
Brazil
2,465
AA+
10,168
24%
1,849 12,091 2,332
18 19 4
Neutrogena
Johnson & Johnson
USA
2,313 AAA-
6,645
35%
2,127
5,021 6,248 14,308 6,350 14,467
M.A.C
Estée Lauder Companies-CL A USA
1,639 AAA-
4,159
39%
1,382
3,351
20 21 23 22 L’Occitane
L’Occitane International SA
Luxembourg
1,570
AA+
3,341
47%
1,698
4,194 1,611
21 25
Rexona
Unilever PLC
UK
1,563
AA
7,047
22%
1,203
4,856
22 13 11
Schwarzkopf
19 24
47 Head & Shoulders Proctor & Gamble Co/The
4,438
Shiseido
6
394
6,037 1,568 6,463
2,776 1,705
Henkel AG & CO KGAA Vorzug Germany
1,517
AA-
4,650
33%
2,420
5,761 2,682
4,579
L’Oréal
France
1,514 AAA-
4,801
32%
1,063
2,969
2,533
24 28 25 27 Oriflame
Oriflame Cosmetics SA-SDR
Luxembourg
1,388
AA-
2,224
62%
1,151
1,917 1,310
25
Cover Girl
Proctor & Gamble Co/The
USA
1,242
AA-
4,784
26%
26
Sunsilk
Unilever PLC
UK
1,232
AA
5,595
22%
27 29 42 39 Rimmel
Coty INC
USA
1,188
AA-
2,724
44%
1,109
615
694
28
Proctor & Gamble Co/The
USA
1,177
AA-
3,954
30%
1,170
3,489 1,172
2,977 1,036
1,501
5,403
SK-II
4,818
8,191 2,274 12,722
23 31 33 35 The Body Shop
977
1,116
2,283
890
4,316
2,712
2,510 1,204 3,830
29 27 28 32 Vichy
L’Oréal
France
1,173 AAA-
3,615
32%
30 23
Lux
Unilever PLC
UK
1,169
AA
5,275
22%
31
Kanebo
Kao Corp
Japan
1,163
AA-
3,340
35%
32
Max Factor
Proctor & Gamble Co/The
USA
1,144
AA-
4,463
26%
1,077 AAA-
1,941
56%
885
1,564
790
1,326
683
915
1,030 AAA-
1,489
69%
1,092
1,924
915
1,641
872
1,757
792
33 32 37 41 Clinique
Estée Lauder Companies-CL A USA
34 30 35 37 Yves Saint Laurent Kering
35 33 9
36
10 Bioré
Old Spice
France
Kao Corp
Japan
964
AA
1,456
66%
Proctor & Gamble Co/The
USA
853
AA-
3,486
24%
1,248 3,336
5,858 3,014 5,575
2,462 1,393 2,636
37 26 26 26 Biotherm
L’Oréal
France
778 AAA-
2,185
36%
1,174
2,886 1,277
38 18 21 21 Clean & Clear
Johnson & Johnson
USA
710
AA+
1,697
42%
2,196
5,777 1,990 5,045 1,959
39
Unilever PLC
UK
696
AA
3,153
22%
Pond’s
3,187
40
Pola
Pola Orbis Holdings INC
Japan
638
A+
1,015
63%
41 34 47
Coty
Coty INC
USA
560
AA
1,122
50%
562
409
42 35 49 49 Elizabeth Arden
Elizabeth Arden INC
USA
473
AA-
1,415
33%
502
1,489
353
826
43
TRESemmé
Unilever PLC
UK
454
AA
2,033
22%
44
Sulwhasoo
AmorePacific Corp
South Korea
439
AA-
1,021
43%
45
Clear
Unilever PLC
UK
430
AA
1,911
23%
46
Rejoice
Proctor & Gamble Co/The
USA
429
AA-
2,438
18%
47
Axe/Lynx/Ego
Unilever PLC
UK
421
AA
3,005
14%
48 36 45
Kosé
Kose Corp
Japan
402
A+
976
41%
452
836
473
1,034
49
Mennen
Colgate-Palmolive Co
USA
373
AA-
3,365
11%
50
Orbis
Pola Orbis Holdings INC
Japan
370
A+
564
66%
342
5,101
826
*All the figures are shown in US$m
April 2014 SPC 43
brandstop 50
(Unilever), placed fourth and fifth,
respectively.
“Nivea is the classic German brand,” says
Haigh. “The original Nivea Creme
generates trust and is a very no nonsense
straightforward product. But it’s very well
engineered. And in recent years Nivea has
done a good job of going upmarket and
diversifying into men’s products and antiageing products.
“By coincidence, the next brand on the
list is Dove, which is doing the same thing
as Nivea,” Haigh adds. “It started as a very
technical product but is constantly pushing
the boundaries. How far can the Dove
brand stretch?” he asks. “Five years ago, no
bloke would have expected Dove to be in
their category. But now Dove Men+Care is
everywhere. And its adverts are very funny;
they’re like larger ads. Using humour
diffuses any worries men may have about
cosmetics being un-manly.”
As well as a solid footing at the top of
the brand value rankings, mass brands also
dominate the top brands by rating table,
and the list of biggest risers is likewise
topped by Garnier, Johnson’s, L’Oréal
and Dove.
However, this is not to say that luxury
brands are performing poorly. “Christian
Dior continues to be a very strong brand
and Chanel has gone up quite a bit as
well,” notes Haigh. Christian Dior’s brand
value is calculated at $3.3bn, putting it in
11th place. It is also classified as an AAAbrand, placing it among the top ten brands
by rating for 2014. Chanel, meanwhile, saw
its brand value leap from $2.8bn in 2013 to
nearly $3bn in 2014. That it slid from 11th
to 13th place despite such a strong
performance speaks volumes about the
competitiveness of the beauty industry.
INS AND OUTS
There were several new labels in this year’s
top 50, namely: P&G owned CoverGirl,
Make-up brand
CoverGirl (below),
owned by P&G, and
Unilever’s Sunsilk hair
care label (below left)
are both included in
the Brand Finance top
50 for the first time
SK-II, Max Factor, Old Spice and Rejoice;
Unilever’s Sunsilk, Pond’s, TRESemmé,
Clear and Axe; Kao Corp’s Kanebo; Pola
and Orbis, owned by Pola Orbis Holdings
Inc; AmorePacific Corp’s Sulwhasoo; and
Colgate-Palmolive’s Mennen, best known
for its Speed Stick deodorants.
Brand Finance’s Haigh explains that the
inclusion of CoverGirl at number 25 and
Sunsilk at 26 isn’t due to a dramatic leap in
brand value between 2013 and 2014, but
because Brand Finance was provided with
more comprehensive data than in previous
years, which allowed the consultancy to
evaluate certain brands for the first time.
That CoverGirl has debuted above mass
make-up competitors Rimmel and
stablemate Max Factor, however, is
TOP 50 BRANDS: NEW ENTRANTS
1,242*
1,232*
1,177*
CoverGirl
Sunsilk
SK-11
*Change in brand value. All the figures are shown in US$m
TOP 50 BRANDS: DROPOUTS
-95*
-118*
-251*
La Roche-Posay
Kiehl’s
RoC
*Change in brand value. All the figures are shown in US$m
AVON: BOUNCING BACK
Back in 2011, Avon’s enterprise value was
$15.8bn – a figure which steadily
declined to $8.2bn in 2013. This in turn
affected Avon’s brand value. “In terms of
scale, Avon is big. But as a company it’s
going through the wars,” observes Haigh.
That said, Avon’s enterprise value has
rallied over the past 12 months and is
now calculated at $11.4bn, meaning that
Avon has climbed from fifth place in
2013 to second place in this year’s
ranking. It has also been upgraded from
an AA- brand rating to AA.
It is likely that the company will
continue to rebound on the strength of
CEO Sheri McCoy’s ongoing cost savings
44 SPC April 2014
initiative, initially outlined in late 2012. To
date, this has included the restructuring or
even closure of operations in underperforming markets (most notably in the
ROI and France), the divestment of
Avon’s Silpada Designs jewellery
business and the rebuilding of its
management team.
“Avon is a very American proposition.
It’s very much about pyramid selling
and door to door selling – that’s what
it’s famous for. And sometimes a
marketing concept from one region
does not translate well into other
regions,” says Haigh. While this was
certainly the case in China, Avon
enjoys a high degree of popularity in Latin
America, which accounted for $4.8bn of its
$10.0bn 2013 revenue.
Avon clearly has further growth in
Latin America in its sights. It recently
entered into an agreement with Greek
skin care brand Korres, granting Avon
exclusive rights to develop,
manufacture and market Korres
products in Latin America. It also
entered into a commercial
arrangement with Coty in February,
under which Avon Brazil will sell select
Coty fragrances through
its Sales Representatives
in Brazil.
top 50brands
something of a coup. The iconic US
colour cosmetics brand has long been a
favourite with young women, with its
current roster of CoverGirls including
singers Katy Perry, P!nk and Janelle
Monáe. In recent months, the brand
strengthened its youth market credentials
with the launch of the Capitol Collection,
a tie in with The Hunger Games: Catching
Fire - part two of the hugely popular film
franchise staring Oscar winning actress
Jennifer Lawrence. It also launched
CoverGirl + Olay CC Cream Tone Rehab
Foundation and CoverGirl + Olay CC
Cream Eye Rehab Concealer, ‘crossover’
products with P&G’s Olay, which contain
Olay serum.
Similarly, the list of dropouts, which
includes La Roche-Posay, Kiehl’s and
RoC, does not necessarily reflect very
FIGURE 1
Brand value historical trend, by country
poor performances, merely that the top 50
is becoming more and more
comprehensive.
The brand which exhibited the most
dramatic decline between 2013 and 2014,
according to Brand Finance, was classic
body and skin care label Aveeno, whose
brand value slipped by $2.5bn. Owner
Johnson & Johnson is clearly banking on a
famous face to reverse its fortunes,
TABLE 7: PROCTER & GAMBLE
Brand
Brand
value
2014
Brand
rating
2014
Enterprise
value
2014 (%)
Brand/
enterprise
value (%)
Pantene
6,163
AA+
17,875
34%
5,974
15,211
2,643
7,358
2,545
7,197
Olay
4,083
AA+
14,617
28%
3,955
12,439
11,756
36,578
11,066
35,777
Head & Shoulders
2,953
AA-
9,995
30%
3,138
8,505
394
1,116
Cover Girl
1,242
AA-
4,784
26%
30%
SK-II
1,177
AA-
3,954
Max Factor
1,144
AA-
4,463
26%
Old Spice
853
AA-
3,486
24%
Rejoice
429
AA-
2,438
18%
Brand
value
2013
Enterprise
value
2013
Brand
value
2012
Enterprise
value
2012
Brand
value
2011
Enterprise
value
2011
*All the figures are shown in US$m
TABLE 8: UNILEVER
Brand
Brand
value
2014
Brand
rating
2014
Enterprise
value
2014 (%)
Dove
5,885
AAA-
Rexona
1,563
AA
Sunsilk
1,232
Lux
Pond's
Brand/
enterprise
value (%)
Brand
value
2013
Enterprise
value
2013
12,430
47%
4,242
10,690
7,047
22%
1,203
4,856
AA
5,595
22%
1,169
AA
5,275
22%
1,501
5,403
696
AA
3,153
22%
Brand
value
2013
Enterprise
value
2013
TRESemmé
454
AA
2,033
22%
Clear
430
AA
1,911
23%
Axe/Lynx/Ego
421
AA
3,005
14%
Enterprise
value
2014 (%)
Brand/
enterprise
value (%)
Brand
value
2012
Enterprise
value
2012
Brand
value
2011
Enterprise
value
2011
Brand
value
2012
Enterprise
value
2012
Brand
value
2011
Enterprise
value
2011
23,935
*All the figures are shown in US$m
TABLE 9: L’ORÉAL
Brand
Brand
value
2014
Brand
rating
2014
L’Oréal
10,766
AAA+
37,619
29%
8,696
26,205
7,744
22,358
7,630
Garnier
4,809
AAA
16,760
29%
2,632
7,051
2,340
6,016
2,493
6,440
Lancôme
4,088
AAA
11,649
35%
5,508
13,467
5,095
11,490
5,685
12,300
Maybelline
2,921
AAA
12,925
23%
2,398
7,076
2,016
6,037
1,568
6,463
The Body Shop
1,514
AAA-
4,801
32%
1,063
2,969
977
2,533
890
2,712
Vichy
1,173
AAA-
3,615
32%
1,170
3,489
1,172
2,977
1,036
3,187
778
AAA-
2,185
36%
1,174
2,886
1,277
2,462
1,393
2,636
Biotherm
*All the figures are shown in US$m
April 2014 SPC 47
brandstop 50
FIGURE 2
Number of brands by country
SULWHASOO: KOREA TO THE FORE
This year, Sulwhasoo, part of AmorePacific’s portfolio, is
included in the Brand Finance top 50 for the first time.
Debuting at number 44 and valued at $439m, the skin care
brand – which means ‘snow flower’ in Korean – has been in
the US market since 2010, when it debuted in Bergdorf
Goodman. It is now also available in America via in Neiman
Marcus and Amore shop, and has gained popularity thanks to
its luxury aesthetic and recipes using traditional Korean herbs,
most notably ginseng.
Last year, the brand grew its international presence by
increasing the number of stores in Singapore and Malaysia.
Meanwhile, domestically, 2013 saw Sulwhasoo increase its
market share and strengthen its position as South Korea’s
number one brand with new product launches. Among the new
products launched in recent months was Microdeep Intensive
Filling Cream and Patch, a 30 day, duo cream and patch which
combines hyaluronic acid cones with acupressure, to hydrate
skin and fill deep lines instantly.
US 19
France 11
UK 8
Japan 6
Germany 2
Luxembourg 2
Brazil 1
South Korea 1
FIGURE 3
Value of brands by domicile
US 40,955
France 35,960
UK 11,850
Germany 7,596
Japan 3,935
Luxembourg 2,958
Brazil 2,465
South Korea 439
however. Friends star Jennifer Aniston was
announced as an ambassador for Aveeno at
the beginning of last year and featured in a
number of advertising campaigns for the
brand throughout 2013.
GOING GLOBAL
When it comes to the number of brands by
country and the value of brands by
domicile, the US is ahead by quite some
way, being home to 19 of the top 50
brands, totalling nearly $41bn. But
although only 11 of the countries in the
league table hail from France, these amount
to $36bn, indicating the majority of French
brands in the top 50 are in higher placed
positions.
“It’s not surprising that most of the
brands in the top 50 are American,” says
Haigh. “The US is the biggest market and
has the most money – and make-up is very
popular there. As for the French, it is one
of their traditional industries. What is
interesting is that Japan, which is a very
developed market, doesn’t have many
brands on this list. I expect it is because
most of its brands are very much restricted
to Japan. They are very expensive and very
specific culturally.”
It is no coincidence that the leading
Japanese brand – with a value of $2.5bn
and ranked number 16 – is Shiseido, which
TABLE 10: ESTÉE LAUDER
Brand
Brand
value
2014
Brand
rating
2014
Enterprise
value
2014 (%)
Brand/
enterprise
value (%)
Brand
value
2013
Estée Lauder
Mac
Clinique
Enterprise
value
2013
Brand
value
2012
Enterprise
value
2012
Brand
value
2011
Enterprise
value
2011
4,589
AA+
10,815
42%
1,639
AAA-
4,159
39%
3,870
8,711
3,716
7,387
3,037
5,095
1,382
3,351
1,077
AAA-
1,941
56%
885
1,564
790
1,326
683
915
*All the figures are shown in US$m
TABLE 11: JOHNSON & JOHNSON
Brand
Brand
value
2014
Johnson’s
Neutrogena
Clean & Clear
Brand
rating
2014
Enterprise
value
2014 (%)
3,603
AAA
13,749
2,313
AAA-
6,645
710
AA+
1,697
Brand/
enterprise
value (%)
Brand
value
2013
Enterprise
value
2013
Brand
value
2012
Enterprise
value
2012
Brand
value
2011
26%
1,513
5,026
1,148
35%
2,127
5,021
42%
2,196
Brand
value
2013
Enterprise
value
2011
1,179
4,438
6,248
14,308
6,350
14,467
5,777
1,990
5,045
1,959
5,101
Enterprise
value
2013
Brand
value
2012
Enterprise
value
2012
Brand
value
2011
Enterprise
value
2011
1,248
3,336
5,858
*All the figures are shown in US$m
TABLE 12: KAO
Brand
Brand
value
2014
Brand
rating
2014
Enterprise
value
2014 (%)
Brand/
enterprise
value (%)
Kanebo
1,163
AA-
3,340
35%
964
AA
1,456
66%
Bioré
*All the figures are shown in US$m
48 SPC April 2014
792
3,014
5,575
top 50brands
BOBBI BROWN: A ROYAL BOOST
Kanebo, whose lines include Impress (above), is
included in the top 50 for the first time in 2014; it
is one of only six Japanese owned brands
featured in the listing
has long had a strong international
presence. The same is true of Kanebo,
which debuted at number 31, despite a
rocky 2013 during which it faced legal
action over recalled skin whitening
products and was absorbed into parent
company Kao.
The danger regarding ‘restriction’ is
pertinent for any brand, whatever their
domicile; those that are leading the pack in
2014 are the ones which have branched
out globally, adapting their strategies and
outputs to the needs of each new market.
The best performing brands are likewise
investing heavily in carefully thought out
NPD and branding to keep them ahead of
the game.
As Haigh concludes: “In order to survive
in the cosmetics category you’ve got to be
extremely good, which is why so many of
While Estée Lauder, M.A.C and Clinique
were included in the top 50, Bobbi
Brown – also part of The Estée Lauder
Companies – missed out. However,
Haigh suggests that the ‘Princess Kate’
effect (the Duchess of Cambridge is
rumoured to be a fan) might see Bobbi
Brown included in the top 50 in 2015.
“We do quite a lot of work with
brands that have Royal endorsements
and, for good or ill, we know that Royal
Warrants of Appointment make a
dramatic difference. Royal Warrants of
Appointment are obviously formal, but
in the case of Kate it’s like an
informal version, where anything
she touches goes through the roof.”
One Kate who is officially
endorsing Bobbi Brown – however –
is Hollywood actor Katie Holmes. She
was announced as the brand’s first
ever celebrity ambassador in 2012,
when she was described by
founder/make-up artist Bobbi Brown
as “a classic natural beauty,
entrepreneur and mother… a natural
fit for my brand”. In September 2013,
Brown and Holmes collaborated on the
limited edition Bobbi & Katie
collection, and Holmes continues to be
at the front of Bobbi Brown’s branding,
including that for new its new Nectar
& Nude Collection.
In addition to leveraging star power,
Bobbi Brown looks set to reap the
rewards of several recently launched
initiatives designed to maximise
consumer engagement. In the UK, it
introduced Bobbi’s Makeup Lessons,
where consumers can choose from
eight lessons and schedule one on one
sessions with professional make-up
artists. Lauder estimates that in the UK
nearly 60% of Bobbi Brown make-up
sales are now linked to these lessons.
The brand also launched a dedicated
brand page on ‘visual discovery’ site
Pinterest to offer fans “engaging,
educational and personalised” content.
these brands are very highly rated. It is a
very competitive industry and it’s hard to
stay on top. Any brand included in the
beauty top 50 should congratulate
themselves.”
www.brandfinance.com
TABLE 13: COTY
Brand
Brand
value
2014
Brand
rating
2014
Enterprise
value
2014 (%)
Rimmel
1,188
AA-
560
AA
Brand
rating
2014
Coty
Brand/
enterprise
value (%)
Brand
value
2013
Enterprise
value
2013
Brand
value
2012
2,724
44%
1,109
615
1,122
50%
562
409
Enterprise
value
2014 (%)
Brand/
enterprise
value (%)
Enterprise
value
2012
Brand
value
2011
Enterprise
value
2011
694
*All the figures are shown in US$m
TABLE 14: POLA ORBIS
Brand
Brand
value
2014
Pola
638
A+
1,015
63%
Orbis
370
A+
564
66%
Brand
value
2013
Enterprise
value
2013
Brand
value
2012
Enterprise
value
2012
Brand
value
2011
Enterprise
value
2011
*All the figures are shown in US$m
April 2014 SPC 51