Trevor Little

Apple has been revealed as owning the world’s most valuable brand portfolio, despite this value predominately residing in one master brand. By contrast, drawing on 539 individual brands, Nestlé is sitting on a $66.6 billion portfolio. The latest top 100 list therefore illustrates the benefits of both the master and multi-brand approaches to consumer engagement. Both, though, come with downsides.

The most valuable brand portfolios list, compiled by Brand Finance, ranks the companies with the highest total value of brands under management. Rather than a list of the most valuable brands, it is a list of who owns the most valuable stable of brands, with the total value of the top 100 topping $3.2 trillion. Half of this is from 44 US companies, which oversee a total $1.68 trillion in brand value.

Sitting atop the pile is Apple, which derives its value from one highly valuable brand. Of course, the company actually operates a number of brands, however, due to their reporting, it is not possible to identify and value these sub-brands from their financial statements. So while more nuanced than it truly being the case that all of the company’s value is rooted in the Apple brand, the company has long served as one of the best illustrations of a master brand strategy. As has been analysed previously in World Trademark Review, the master brand strategy focuses an organisation’s equity and energy on one primary brand, enabling the company to benefit from a consistent and easily identifiable brand perception. When consumers buy into this perception, the results can be powerful.

Other ‘single brand’ companies listed in the top ten include Samsung, Verizon Communications and AT&T. In second place, with 17 brands, is Alphabet Inc and, while not yet a master brand itself, much of the value it sits on derives from Google, which until recently could be regarded as one. Clearly, the master brand approach enables the construction of a compelling, yet simple, brand narrative, serving as a powerful touchpoint for consumers to buy into.

However, it isn’t suitable for all companies and product sectors – turn to the food and beverages, and household goods, sectors and diversity is a strength. In such sectors, as we have noted before, the ability to offer a range of products to with a multitude of purposes to an array of consumers requires individual brands to tell their own story – hence the appearance of companies such as Danone (196 brands), Pepsico (182), Heineken Nv (181) and Anheuser-Busch Inbev (114) in the top 100. 

The company with the most brands under its management on the list is Nestlé SA, which manages 539 sub-brands and climbed to seventh place after 14% growth in value (to $66.6 billion). In a release announcing the rankings, Brand Finance attributes this to accelerated growth in North America (largely due to the turnaround in frozen meals) and Latin America (where the company cited instant coffee as a core driver of growth). Furthermore, an increase in health awareness in relation to carbonated drinks gave Nestlé the opportunity to promote its bottled water segment which other companies may have failed to embrace. The release concludes: “Nestlé’s success is largely due to the range of product segments it provides, allowing it to more effectively overcome challenging global trends than its competitors.”

While the multi-brand approach has downsides (eg, each product will require careful building and support from scratch, rather than being able to benefit from residual goodwill towards the master brand), the latter encapsulates a core benefit of the multi-brand approach – that the diversity of branded products, and ability access to different markets, enables companies to weather any storm in particular segments and capitalise on growth in others. It also helps ensure that any reputational hit for the company doesn’t necessarily have a significant damage on the overall brand value under management.

The latter is perhaps best illustrated by the case of Volkswagen AG. The upward surges in China, India and across continental Western Europe, which Brand Finance predicts will compensate for reductions in Brazil, the US and the UK, is expected to see the light vehicle industry grow going forward. Toyota Motor Corp, ranked 10th this year, enjoyed a 30% increase in portfolio value (to $55.3 billion) this year.  However, Volkswagen – which was ranked on the basis of eight brands - saw its portfolio value plunge 36% this year, in large part due to the recent emissions scandal. Clearly, where a company manages a fewer number of brands, the significance of a reputational hit for a key component of the brand stable is more marked. 

Ultimately, the market segments a company operates in will, in large part, dictate whether a multi-brand or master brand approach is the best strategy. Clearly, each comes with clear benefits and concurrent risks.

A final aspect of the research worth noting is the rise of Chinese brands. A total of 14 Chinese companies feature in the top 100 table, meaning that only the US tops it. While China Mobile was the best performing in overall brand value terms, the fastest growing portfolio across the entire 100 was the Agricultural Bank of China, which enjoyed a 42% growth in brand value over the year (to $32.3 billion). China Construction Bank and ICBC saw their values rise 34% and 32% respectively, with the former ranked as the world’s most powerful banking brand. None of the Chinese portfolios in the table dropped in value, so it appears the power of Chinese brands is gaining momentum.

The top 25 most valuable brand portfolios were:

Rank 2016

Number of Brands

Parent Company

Domicile

Portfolio Value 2016 ($m)

1

1

Apple Inc

United States

145,918

2

17

Alphabet Inc

United States

99,046

3

1

Samsung Group

South Korea

83,185

4

13

Wal-Mart Stores Inc

United States

77,523

5

7

Microsoft Corp

United States

74,121

6

6

Amazon.Com Inc

United States

69,642

7

539

Nestlé SA

Switzerland

66,604

8

1

Verizon Communications Inc

United States

63,116

9

1

At&T Inc

United States

59,904

10

4

Toyota Motor Corp

Japan

55,285

11

43

The Procter & Gamble Co

United States

54,668

12

182

Pepsico Inc

United States

53,169

13

82

Philip Morris International

United States

52,734

14

27

Johnson & Johnson

United States

50,651

15

2

China Mobile Ltd

China

49,864

16

72

Coca-Cola Co/The

United States

48,301

17

1

Wells Fargo & Co

United States

44,170

18

3

J.P. Morgan Chase & Co

United States

43,549

19

3

The Walt Disney Co

United States

43,458

20

1

Mcdonald's Corp

United States

42,937

21

4

Daimler AG

Germany

42,863

22

103

Unilever PLC

United Kingdom

42,666

23

8

Volkswagen AG

Germany

42,239

24

3

Bayerische Motoren Werke AG

Germany

41,532

25

1

General Electric Co

United States

37,216

 

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