The world’s most valuable alcoholic drinks brands could lose up to US$33bn worth of brand value as a result of the coronavirus pandemic, according to the latest Brand Finance Alcoholic Drinks 2020 report.
Brand Finance’s analysis shows that different alcoholic drinks brands across the sector are likely to be impacted differently, with beer brands heavily impacted, facing a potential 20% brand value loss, and spirits and champagne & wine brands likely to be moderately impacted, facing a potential 10% brand value loss.
Looking beyond the alcoholic drinks sector, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1trn as a result of the outbreak.
Brand Finance assessed the impact of the crisis based on the effect of the outbreak on enterprise value, compared to what it was on 1 January 2020. The likely impact on brand value was estimated for each sector (see below). The industries have been classified into three categories – limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10% brand value loss), and heavy impact (up to 20% brand value loss) – based on the level of brand value loss observed for each sector in the first quarter of 2020.
Richard Haigh, Managing Director, Brand Finance, commented: “We are witnessing mixed fortunes across the alcoholic drinks industry as a result of the COVID-19 pandemic. On the one hand, the almost global lockdown and closures of bars and restaurants has resulted in the standstill of on-trade sales.
“Off-trade sales, however, in the supermarkets and bottle shops, have spiked as consumers shift towards consuming alcoholic drinks at home. It is yet to be seen whether this spike can offset the loss and therefore how brands will fare in the coming year.”
For Beer, Spirits, and Champagne & Wine brand value rankings and analysis, download the free preview of the Brand Finance Alcoholic Drinks 2020 report
NAM Implications:
- Given the uncertain on-trade future…
- Can we expect a renewed emphasis on off-trade business development…
- ..by alcoholic and non-alcoholic brands anxious to compensate for on-trade losses.
