For the third year running, L’Oréal Paris has topped the Brand Finance 50 Most Valuable Cosmetics Brands beauty league table. But how does the beauty and personal care industry compare with high-fliers across the worlds of entertainment, finance, fashion and tech? SPC and Brand Finance provide their analysis of 2016’s findings.
Top beauty brands are successfully adapting to the changing market environment, boosting long term revenues as a result and putting themselves on a par with titans like Disney and Google, new research from leading brand valuation consultancy Brand Finance has revealed.
In the sixth of SPC’s 50 Most Valuable Cosmetics Brands series of reports, beauty and personal care has once again proved itself to be a robust and fiercely competitive industry.
Calculated by Brand Finance, the top 50 beauty league table is based on brand value, established using the royalty relief method, which determines the value a company would pay to licence its brand as if it did not own it; it estimates the future revenue attributable to a brand to find its royalty rate. For a more detailed explanation of the process, we would recommend contacting Brand Finance or visiting the company's webpage; Brand Finance's contact details can be found at the end of this article.
In addition, Brand Finance allocates each brand a ‘rating’, with AAA indicating an extremely strong brand and D being one that’s failing. This brand rating is derived from the Brand Strength Index (BSI), which benchmarks the strength, risk and future potential of a brand.
Beauty stands its ground
As well as calculating industry-specific league tables, Brand Finance is famous for its ‘Global 500’ ranking of brands across all sectors, which in 2016 included ten big names in beauty. Commenting on the beauty world’s position in the pan-industry arena, Emilie Milton-Stevens, Analyst at Brand Finance, tells SPC: “In terms of brand value, they [beauty brands] are scattered throughout the Global 500. However, in terms of brand strength, all of the beauty brands are in the top 200 and two-thirds are in the top 100.”
In 2016’s Global 500, only seven brands were given the highest AAA+ rating – but there was one beauty brand among them. With a huge BSI score of 91, L’Oréal Paris ranks just below Walt Disney and Lego as one of the world’s strongest brands.
Its quantified brand strength was as high as those of fellow AAA+ brands PWC and Nike, and higher than both Coca-Cola and Google. Johnson & Johnson-owned Neutrogena was the second strongest beauty label; a BSI of 89 and a AAA rating put it on a par with Louis Vuitton and ahead of Microsoft. Maybelline – the next beauty label in terms of brand strength with a value of 88 – is placed ahead of Samsung and Apple, while its L’Oréal stablemate Garnier has a BSI of 86, the same as McDonald’s and Tiffany & Co.
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