Page 13 - Connecting Media, Technology And Brands To Tomorrow's Consumer

Section 02
10-Year Performance Analysis // CATEGORY CHANGES
10-YEAR RESULTS
CATEGORY CHANGES
Despite disruptions, most categories rise in value
Led by fast food and technology, all but two of the 13 product categories in the BrandZTM Top 100 Most Valuable Global Brands report improved in Brand Value – often significantly – over the past 10 years.
Seven categories at least doubled in value: fast food, technology, beer, apparel, telecom providers, soft drinks and retail. But disruption touched many categories. And every category felt both the immediate impact of the global financial crisis and the hangover of cautious consumer spending.
The biggest shift of Global Top 100 Brand Value went to technology, which along with telecom providers accounted for 44 percent of the total in 2015, compared to 35 percent 10 years ago. The consumer categories collectively declined in their proportion of overall value.
Although consumer concern about healthy ingredients and calorie consumption increased significantly during the past decade, the two categories most impacted by this trend, fast food and soft drinks, increased in Brand Value 252 percent and 118 percent, respectively.
That’s because the Brand Power of the category leaders, McDonald’s and Coca- Cola, enabled the brands to sustain their value even as they strove to adjust their businesses for rapidly evolving consumer expectations.
In addition, value rose rapidly for newer, healthier, innovative brands, like Panera and Chipotle, which was not yet in the fast food category ranking when the BrandZTM Global Top 100 launched in 2006. Responding
to health concerns, Chipotle removed genetically modified food from its menu.
Personal care brands also responded to consumer concern about the safety of product ingredients, as well as more inclusive ideals of beauty and the rapid growth of
the male grooming sector. The fluctuations of China’s economy, which helped drive category brand value growth, also influenced its recent slowdown.
Changing millennial tastes shaped beer brands, which introduced craft beer versions and new flavor options. In the luxury category, consumer reluctance to spend ostentatiously during the recession evolved into more conscious consumption, with greater interest in craftsmanship and provenance than logos.
Fast-fashion brands drove brand value growth in the apparel category, although the athletic clothing and affordable luxury apparel brands also prospered. Brands in the middle, lacking a compelling value proposition, felt squeezed.
Some business-to-business technology brands worked to reinvent themselves for cloud-based enterprise solutions. Meanwhile, the business-to-consumer leaders broadened their influence on people’s
lives. Competition not only included Apple, Google and Facebook, but also the Chinese contenders, Tencent, Alibaba and Baidu.
BrandZTM includes Alibaba in the retail category because of its e-commerce dominance. E-commerce led a transformation of retail so radical that today the two most valuable retail brands – Alibaba and Amazon – operate no physical stores.
The Internet and disintermediation impacted the insurance category. Brands analyzed big data to personalize their offerings, even as aggregators commoditized the business in certain markets, like the UK. Chinese brands grew rapidly based on the size of the market and the needs of the growing middle class for insurance and wealth-management products.
Telecom providers also focused on building brands and expanding from simply being conduits of voice and data to becoming content-provider brands. The heavy investment to create these ecosystems and build networks drove industry consolidation.
The global financial crisis especially impacted the cars and banks categories. While business ratcheted back up, cars and global banks remain the only two categories that have not recovered in Brand Value to pre-recession levels. (For further details about 10-Year trends and performance, please see Part 5: The Categories.)
Global Top 100 Brand Value shifts to technology
The biggest shift of Global Top 100 Brand Value went to technology, which along with telecom providers accounted for 44 percent of the total in 2015, compared to 35 percent 10 years ago. The consumer categories collectively declined in their proportion of overall value.
10-Year Category Changes
24 BrandZTM Top 100 Most Valuable Global Brands 2015
25
10-year value change (2006 to 2015), % Top 100 value
Financial Institutions Commodities
Food & Drink Consumer & Retail Technology
35%
44%
2006
16%
19%
7% 8%
7% 9%
34%
22%
2015
Source: BrandZTM / Millward Brown
10 Insurance
11 Oil and Gas
42% * 13% *
Rank Category
Brand value % change 2015 vs 2006
1 Fast Food
2 Beer 183% 3 Technology 175% 4 Apparel 139% 5 Telecom Providers 136% 6 Soft Drinks 118% 7 Retail 101% 8 Personal Care 83% 9 Luxury 70%
12 Cars -3%
Source: BrandZTM / Millward Brown
Based on the Top 10 in each category
* Value change in Insurance since 2008, Oil and Gas since 2010, Global and Regional Banks weren't presented in 2006, so haven't been included here.
252%