Every year, leading brand valuation and strategy consultancy Brand Finance analyses thousands of the world’s top brands to determine which are the most powerful and highest valued. As the cosmetics industry is often on our radar, we thought it would be interesting to share the agency’s findings, as summarised in the freshly-published Brand Finance Cosmetics 50.
L’Oréal Paris remains the world’s most valuable cosmetics brand. A 22% increase in its 2015 brand value sees it reach a total of US$ 13.7bn, a record for the industry. It also has the strongest brand; Brand Finance awards a Brand Strength Index (BSI) score out of 100 for each brand based on indicators like familiarity, consideration, loyalty, investment, social responsibility and preference. L’Oréal Paris scores 91.5, making it not just the strongest cosmetics brand, but the third strongest from any industry, beaten only by Disney and Lego.
Commenting on the label’s strong performance, Brand Finance’s Cosmetics Analyst Emilie Milton-Stevens stated, “L’Oréal Paris continues to impress: bettering itself and raising its game the whole time. It is performing well in three key respects: it is investing in trends and technology; it is innovating digitally; and it continues to inspire trust. Across the Brand Finance Cosmetics 50, brands based outside the US have been negatively impacted by foreign exchange rate changes, but L’Oréal revenue and brand performance was so strong that it not only counteracted that impact but actually grew 22%.”
Brazilian brand Natura did not experience the same good fortune in the year just past. 81% of the brand’s revenue comes from the domestic market, where the combined effects of recession, inflation and currency fluctuations contributed to a 67% decline in brand value.
Brazil is also the biggest market for American cosmetic brand, Avon. It too has seen a severe decline in brand value, which is down 54% to US$1.8 billion. However Avon’s problems stem as much from its home market in North America as Brazil. The brand has admitted that eroding relevance, a declining base of representatives and profitability are serious problems in the US.
One of the best performers of the year was Unilever’s Lynx (Axe) deodorant brand. It has pursued a concerted strategy to shed its ‘laddish’ image, in step with the growth of more nuanced portrayals of masculinity. In January, Lynx launched its ‘Find Your Magic’ campaign, which encourages men to break free from assumptions about how they should behave and express themselves. It’s an appropriate message for a brand seeking to redefine itself. Its brand value is up 69% to US$1.7 billion.
To find out more about how Brand Finance calculate brand value, refer to their methodology page. Royalty Relief primarily explains the level of royalties that would be generated if the brand were licensed.
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