Global 2015: CATEGORIES | CATEGORY CHANGES
The 14 percent brand value growth of the BrandZTM Top 100 Most Valuable Global Brands 2015 exceeded the 12 percent growth rate in the 2014 report. But brand value growth was distributed less evenly across categories, and two categories lost value.
Disruptive forces, including changing consumer attitudes, the economic slowdown of developing markets and geopolitical factors influenced the varying rates of brand value growth, even as brand value grew overall, driven primarily by technology, the strengthening of the US economy and continued demand in China.
Apparel experienced no brand value change in the 2015 report after leading
the categories in the 2014 report with a 29 percent increase. Similarly, the global banks and luxury categories declined in value in the 2015 Global 100 report, after rising 15 percent and 16 percent, respectively, in the 2014 report.
Consumer and Retail
The consumer and retail categories lagged all categories in brand value growth, with the exception of global banks. Although the retail category rose 24 percent in Brand Value, that increase mostly resulted from the inclusion of Alibaba, the Chinese e-commerce brand, for the first time.
Without Alibaba, retail rose only 2 percent, which is comparable to the increases in the consumer categories: cars, 3 percent; personal care, 2 percent; and apparel 0 percent. Luxury declined by 6 percent.
The car category is one of only two categories that have not yet rebounded to pre-recession levels. The other category is global banks. Car sales in the US and China drove category value growth, although Chinese sales slowed from a year ago.
China’s slower economy also impacted the personal care and luxury categories. And luxury continued to be impacted by post- recession consumer spending, which was a factor in apparel, too. Fast-fashion apparel brands generally improved in brand value, as did some of the premium brands. The middle suffered, however.
Food and Drink
The fast food and soft drinks categories exemplified how exceptionally strong brands enable businesses to perform well despite forces challenging the entire category.
Each food and drink category fell in the midrange of brand value growth: beer, 9 percent; soft drinks, 8 percent; fast food, 4 percent. But all the food and drink categories felt the effects of changing consumer attitudes and concerns. Millennial tastes challenged beer consumption in the developed markets. Beer brands introduced new products and pursued growth opportunities in other parts of the world.
Consumer health concerns impacted both soft drinks and fast food. Brand strength afforded category leaders Coca-Cola and McDonald’s some space to address the challenges with changed product offerings and marketing communications.
It was not a good year for bank brand value appreciation. The global banks declined 2 percent in Brand Value and the regional banks improved only 1 percent. While banks mostly performed well financially, consumer trust continued to erode. The regional banks enjoyed a somewhat higher level of trust, but a category effect seemed to depress consumer perception across the category.
Insurance improved 21 percent in Brand Value following an 11 percent increase a year earlier. The size of the Chinese insurance market and the interest in insurance among China’s new middle class drove much of this growth. Brands in the US and Europe contended with commoditization of the category and the impact of technology, with more insurance products available online through aggregators.
Of all the categories, oil and gas was most disrupted by geopolitical forces as the price of oil plummeted from $100 to around $50 a barrel, and sanctions against Russia (because of the Ukraine crisis), prevented major western multinational oil companies from partnering with state-owned Russian companies in Arctic exploration.
The oil and gas category increased 6 percent in Brand Value based on strong financial results earlier in the year.
With a 24 percent rise in value, technology tied with retail as the fastest growing category in the BrandZTM Top 100 Most Valuable Global Brands 2015 report. The telecom providers category was fourth in brand value growth, with a 17 percent increase.
Both business-to-consumer and business- to-business technology brands experience strong brand value appreciation. Apple claimed first place in the BrandZTM Global Top 100 based on record sales for its iPhone 6 and the power of its brand to build a loyal fan base. After acquisitions that helped monetize Facebook, the brand almost doubled in value.
Business-to-business technology brands showed financial improvement, following several years of transitioning complicated global enterprises to the cloud. Intel rose 58 percent in Brand Value. Chinese brands increased their presence in the technology category. Tencent, the Internet portal, rose 43 percent in Brand Value, and Huawei, the telecom equipment provider and mobile phone producer, entered the BrandZTM Global Top 100 at number 70.
Telecom providers faced accelerated acquisition and consolidation in mature markets and attempted to build scale, add content and strengthen the emotional appeal of brands built around functionality. The North American brands AT&T and Verizon ranked first and second, respectively, followed by China Mobile.