Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. A brand’s strength is assessed (based on factors such as marketing investment, familiarity, preference, sustainability and margins) to determine what proportion of a business’s revenue is contributed by the brand. This is projected into perpetuity to determine the brand’s value. America’s 500 most valuable brands, classified by both their industry and their state, are featured in the Brand Finance US 500.
In what may be seen as symbolic of changing attitudes, KFC, the fast food chain that has long been the Bluegrass State’s most recognisable brand, has lost its status as the most valuable brand in Kentucky – to a health insurance provider, Humana. KFC lost more than a quarter of its brand value this year, bringing it down to $6.16 billion.
The fact that it was a health insurer that usurped KFC’s top spot is fitting, as KFC’s struggles are largely attributable to changing attitudes among consumers, who are increasingly moving away from fast food and towards healthier and fast casual alternatives.
The company is taking steps to reverse its fortunes, having appointed a new head of U.S. operations this month, and switching is creative agency from BBH to Mother. It has a big task on its hands – KFC’s brand value decline of 27 percent – was the largest of any restaurant chain in the US 500 list.
Humana, meanwhile, has positioned its brand around the #StartwithHealthy campaign, which targeted seniors through TV advertising, focusing on the benefits of being healthy. The Louisville-based firm is now the fifth-most valuable US health insurer, behind UnitedHealth Group, Anthem, Aetna, and Medtronic.
· Humana usurps KFC as Kentucky’s most valuable brand
· KFC’s brand value drops 27 percent as consumers shift towards healthier alternatives
· America’s brands increase in value by 11 percent despite a turbulent year
· Google replaces Apple as America’s (and the world’s) most valuable brand
· California’s brands have the greatest combined value, 23 percent of the national total
California remains America’s most valuable state by brand value. Its dominance in tech (the most valuable and fastest growing sector in terms of brand value) has enabled California to pull well ahead of the rest. Of the country’s top 500 brands, 71 hail from the Golden State, with a total value of $725 billion.
New York is in second place, but despite have just one less brand in the top 500 than California, New York’s total is significantly lower, at $481 billion. Finance comprises a large share of New York’s total brand value so New York has therefore been disproportionately affected by the stalling values of financial services brands.
The increasing concentration of brand value in tech also helps to explain Washington State’s strong performance. Washington has just 11 brands (16 states have more) yet as the home of tech titans Microsoft and Amazon, Washington ranks 4th with a total brand value of $242 billion.
Third place Texas has a much broader base of brand value. Its 48 brands have a total value of $263 billion. Oil & Gas brands are of course well represented, including ExxonMobil and its portfolio of brands, however Texas is home to major brands from a wide range of sectors including AT&T (telecoms), Dell (tech), American Airlines and Whole Foods (retail).
At the national level, America’s brands continue to reach new heights. The total value of America’s top 500 brands now exceeds $3 trillion dollars, having increased 11 percent from $2.82 trillion in 2016 to $3.14 trillion this year.
Brand Finance CEO David Haigh comments, “President Trump, an experienced brand builder himself, appears to have fostered a conducive environment for continued brand value growth. However his longer term approach and objectives remain hard to pin down and 2017 could deliver as many if not more shocks than 2016.”
This year has already delivered one major brand shock. Apple has seen nearly $40 billion wiped off its brand value. Apple has over-exploited the goodwill of its customers by failing to maintain its technological advantage and delivering tweaks to existing products rather than genuine innovation. Brand value has fallen 27 percent since early 2016 to $107 billion, meaning that for the first time in over five years, America (and the World) has a new most valuable brand.
Six years after it last held the title in 2011, Google is now the world’s most valuable brand with a value of US$109 billion. Google remains largely unchallenged in its core search business, the mainstay of its advertising income.
However, as Brand Finance CEO David Haigh observes, “the recent controversy over Google’s placement of customers’ ads alongside undesirable content illustrates that even companies with apparently dominant market positions must be conscious of the risks to their most valuable asset, their brand.”
Amazon is growing strongly (brand value is up 53 percent year on year) as it continues to both reshape the retail market and to capture an ever larger share of it. With a brand value only fractionally behind Apple and Google already, Amazon could easily become the most valuable brand in the US and the rest of the world in 2018.
Coca-Cola’s brand value was $43.1 billion in 2007, making it the most valuable brand in America and the wider world. Today however, its brand value stands at just $31.8bn, putting it 16th in the US and 27th internationally. Increasing concerns over the links between carbonated drinks and obesity have begun to undermine what the Coca-Cola brand has represented for over one hundred years. Pepsi is similarly suffering, falling 4 percent to $18.3 billion.
The same trend is evident in the fast food industry. The brand values of McDonald’s, KFC, Taco Bell, Pizza Hut, Subway and Domino’s have all fallen due to heavy competition in an increasingly fragmented market, with healthier challenger brands offering greater choice for consumers.
The current year heralds huge success for America’s airline brands. America’s airlines have all soared in value with United, Delta and American growing by 60 percent, 47 percent and 59 percent respectively. In the process, American has overtaken Emirates to become the world’s most valuable airline brand.
From Brand Finance Communications