Visit www.drinkspowerbrands.com for more information and the current report

Scroll down to download the full report pdf

The Power 100: The world’s most powerful spirits & wine brands 2009

1. Introduction
2. Methodology
3. Key Issues
4. Biggest Movers: Going UP
5. Biggest Movers: Going DOWN
6. The Top 10
7. Top Sectors
8. Strongest Brands
9. Biggest Brand Owners
10. Countries of Origin
11. The Top 100

1. Introduction

Now in its fourth year, The Power 100, 2009, highlights the key issues and trends in the spirits and wine industry. It also identifies which brands are increasing their equity using a unique measure defined by measuring brand score and volume data. Big brands have dominated this year, consolidating their positions through astute brand management, the strength of their portfolio, innovative marketing initiatives and playing to the consumers’ desire for quality and reliability. This is illustrated by the lack of movement within the top 10 which all held their positions. Intangible Business specialises in valuing brands and other intangible assets and has considerable experience in the spirits and wine industries. Intangible Business’ experience is augmented by a panel of industry experts who contribute to the production of this list of the most powerful spirits and wine brands in the world.

2. Methodology

Nearly 10,000 brands in the spirits and wine sectors were researched to derive a list of the 100 most powerful spirits and wine brands in the world. Power is defined by a brand’s ability to generate value for its owner. Value is classified by a series of measures as identified below. The population for the research is all current and potential users of alcoholic drinks.

Scoring

Hard measures
•  Share of market:    volume based measure of market share
•  Brand growth:    projected growth based on 10 years historical data and future trends
•  Price positioning:   a measure of a brand’s ability to command a premium
•  Market scope:   number of markets in which the brand has a significant presence

Soft measures
•  Brand awareness:   a combination of prompted and spontaneous awareness
•  Brand relevancy:    capacity to relate to the brand and a propensity to purchase
•  Brand heritage:    a brand’s longevity and a measure of how it is embedded in local culture
•  Brand perception:    loyalty and how close a strong brand image is to a desire for ownership

A panel of eight leading experts in the drinks industry independently ranked each selected brand out of 10 on the above measures (10 = high, 0 = low). The scores given by the individual panel members were aggregated and averaged to reach a total score for each brand. A total score was achieved by multiplying a brand’s weighted volume by its brand score, within a defined range. The weighting is designed to adjust the volumes to a comparable level. Brand score is a derivative of the eight measures of brand strength. This results in a ranking of the world’s most powerful alcohol drinks brands.

The Panelists

The panel of drinks experts has over 200 year’s combined experience in the global drinks industry. They have been involved with all of the major drinks companies and held positions of responsibility in virtually every market. Between them they hold detailed financial and marketing knowledge of every brand covered in this report, and many more besides. Nearly 10,000 brands were looked at in the compilation of this research, across all markets, in every territory.

Stuart Whitwell, joint managing director of Intangible Business
Stuart spent ten years with Hiram Walker in Europe and Asia Pacific, specialising in brand and market business development projects, holding various senior positions in finance, business development and general management, latterly as regional director of finance and business development for Asia Pacific. Since leaving Hong Kong, where he set up a consultancy undertaking projects for Brown-Forman, Pernod Ricard and Jose Estevez in China and the Philippines, Stuart has carried out many projects for drinks companies such as Allied Domecq, Pernod Ricard, Fortune Brands and Angostura. Stuart is co-founder and joint managing director of Intangible Business.

Allan Caldwell, director at Intangible Business
Allan has considerable international drinks experience working throughout Europe, North and South America and the Far East. For ten years he held a variety of senior, commercial and finance roles and was responsible for numerous business restructurings, acquisitions and sustained profit growth, latterly as finance & commercial services director for Allied Domecq’s Duty Free division. He has since been heavily involved in the drinks industry through his work as a director of Intangible Business.

Donard Gaynor, President of International, Beam Global
An industry veteran with more than two decades of global business experience, Gaynor oversees all international business interests for the company, from commercial and marketing operations to strategic partnership development. Gaynor is a member of the Beam Global’s executive committee, and leads the organizations international senior leadership team. He also sits on the board of Maxxium Holdings, the global sales and distribution arm for Beam Global. Gaynor’s team plays a key role collaborating with many global trade partners, including Maxxium.

Charles Richardson, consultant at Intangible Business
Charles Richardson spent his entire career in the wine and spirits industry, latterly as President of Allied Domecq Duty Free for 11 years. Charles is now a special consultant with Intangible Business, providing expert insight into the wine and spirits market.

Malcolm Davis, director of brand strategy and development, Intangible Business
Malcolm has held many senior positions in international drinks management, notably in Asia Pacific markets. He has worked at Hiram Walker and Allied Domecq and was a senior director at Harveys of Bristol Ltd, Suntory and Baskin Robbins. Malcolm is currently a director of Duval-Leroy Champagne and a director of Intangible Business.

Patrick Gillon, director of brand strategy and development, Intangible Business
Continental Europe and Latin America are Patrick’s specialist markets. His career spans senior marketing and management positions in UDV, Hiram Walker and Allied Domecq, with whom he was president of Latin America for four years. Patrick is currently involved in several Continental Europe initiatives and has recently been involved in valuing Allied Domecq’s brands and business as part of its acquisition by Pernod Ricard and Fortune Brands.

The Drinks Business
The Drinks Business is a leading UK drinks trade publication and is at the forefront of what is happening in the industry. Published monthly, The Drinks Business is often the first to hear about new development. It launched a new research arm, Drinks Insight with more research and data analysis than in any other trade title. This, combined with its many reports and continued attendance at all the international fairs, give the Drinks Business team a privileged insight into the latest industry trends.

3. Key Issues

Global Recession
The global recession is obviously the major issue of 2009 and beyond. No brand will be immune from the economic downturn although the figures in this year’s report have only been partially affected by this impact. 2009 data, seen in 2010, will reveal the true impact of how the spirits and wine industry are affected. What we are seeing, however, is a drive to the big established brands. Every brand in the top 10, for instance, grew their volumes in 2009. This is reflected in the total score given to each brand which all increased – evidence of the flight to safe havens that these brands are.

Innovation
The move to dominant category leaders underlines the lack of innovation coming through the industry. Innovation continues to be stifled by this high level of consolidation. There is little room for new brand entrants as established brands create strong barriers to market entry. The recession will only make innovation more difficult as investment is harder to come by, big players play it safe and industry participants stick to what they know best: big, established brands.

Cash is King
With adversity comes opportunity. Those companies with strong balance sheets and cash will be able to out manoeuvre over-leveraged businesses. These debt laden companies will also be keen to divest non-core assets to strengthen their balance sheets. Expect strong second tier companies to extend their interest in the drinks industry as well as cash-rich companies with low levels of debt, such as Diageo, to be on the lookout for further investments.

Vodka
The vodka market has surpassed all expectations. Led by Smirnoff, Absolut and others including Grey Goose, Stolichnaya, Skyy and Finlandia, the whole category continued to grow when it had looked like growth was stalling. This underlines vodka’s power in the market, fueled by powerful branding, its versatility as a cocktail and mixer ingredient, its alignment with sophisticated marketing programmes and its capture of a still buoyant US market which may come under threat as the recession takes hold.

Opportunities
Although the M&A market has all but collapsed due to the lack of credit, a number of players are looking vulnerable and others are looking aggressive. Beam is perhaps one of the most vulnerable of the bigger players. It is burdened by a significant debt pile, it is reliant on the US market which continues to decline and it is owned by Fortune Brands which is very reliant on the US housing market. That said, Beam has a broad range of strong brands with significant potential for growth given the opportunity.

Pernod Ricard has also indicated its intention to reduce its level of debt, which increased with the acquisition of Allied Domecq brands and Vin & Sprit. It will have to move on more non-core brands, such as it did with Wild Turkey in the beginning of 2009. Constellation sold over 40 of its value spirits brands to Sazerac Co in the beginning of 2009 and could now look at divesting remaining spirits brands in its portfolio, except Paul Masson brandy because of its connection to the Paul Masson wine.

More aggressive companies include Campari, which bought the Wild Turkey brand, and could be looking to further bolster its portfolio with more bolt-on acquisitions when opportunities arise, consolidating the success of its flagship brands and recent acquisitions. Diageo too will be watching, waiting to grab an opportunity, with Hennessy possibly within its sights.

The Big 3
Diageo, Pernod Ricard and Bacardi Martini are outstripping their rivals with the quality and quantity of brands under their management. This triumvirate leads the industry and is further increasing its dominance with continued innovation, acquisitions and impressive brand management.  Pernod Richard’s place in these upper echelons was secured with the combination of strong brand performance and the acquisition of Vin & Sprit. Pernod Ricard is now the second biggest brand owner in The Power 100, moving Bacardi Martini off its number two spot. However, Diageo’s position at the top of the tree looks unassailable. It holds the world’s most valuable spirits brands which hold dominant positions in all their key markets and categories. This focus on core, dominant category leaders will ensure Diageo’s continued success in 2010 and beyond.

5. The Biggest Movers – Going UP

1. Smirnoff, total score up 7%
Smirnoff compounded all expectations that it could continue its already impressive growth. With the right combination of brand image and flavour variants, it dominates the vodka market.

2. Martini, total score up 6%
Martini is enjoying a resurgent brand image, new product presentation, an invigorated association with James Bond and an increased relevance in the mixer market. A great revival story.

3. Johnnie Walker, total score up 6%
Ever powerful, the Johnnie Walker brand is a leader in its category and has arguably the largest international footprint in its sector – a brilliantly managed flagship brand.

4. Jaegermeister, total score up 5%
The never ending fairy story of Jaegermeister… it just keeps growing in the US through innovative marketing activity maintaining brand relevancy, volume and value growth.

5. Bacardi, total score up 5%
Bacardi has successfully interwoven its connection to Latin music into its marketing mix and communications programmes, building on its already impressive brand image.

6. The Biggest Movers – Going DOWN

1. Pastis 51, -15 positions
Pastis 51 is the number two in a small and declining market. It’s very traditional, hard to maintain with its aging consumer profile and restricted to France, even with owner Pernod.

2. Seagram V.O., -15 positions
Seagram V.O. is a strong brand in its category but trapped within the North American market. Although it has maintained its brand reputation in 2009, it has nowhere to go.

3. Metaxa, -12 positions
The mono-market Greek brand Metaxa is restricted by its geographical isolation. Although a strong brand and popular choice in Greece, it doesn’t translate well overseas restricting growth.

4. Disaronno, -9 positions
A decline in its brand score coupled with a weak performing relative to its peers and its relative confinement to Italy, contributed to Disaronno’s fall down the rankings – a heritage brand in need of rejuvenation.

5. Seagram Gin, -7 positions
Seagram Gin suffers from being in a depressed category and trapped in the North American market. A difficult brand to bring back to growth.

7. The Top 10
2009 has seen all brands in the top 10 hold their positions in the face of significant adversity. Each brand has had a positive year in 2009’s report increasing their total score by an average of 4%. The strength of their brands have also, on the whole, increased. There are a number of elements contributing to this trend. Consumers are experiencing an aversion to risk, reverting to the safe havens of the big, established brands rather than experimenting with new, unproven alternatives. Brand owners, too, are focusing on maintaining and growing the positions of their flagship brands, driving consumers to these big behemoths.

Heritage dominates if managed well. Each of these brands have heritage in spades and coupled with significant distribution structures, competent managers and proven marketing strategies, it is no surprise these brands are taking a greater share of market.

The Top 10
1. SMIRNOFF
2. JOHNNIE WALKER
3. BACARDI
4. MARTINI VERMOUTH
5. HENNESSY
6. ABSOLUT
7. JACK DANIELS
8. CHIVAS REGAL
9. BAILEYS
10. BALLANTINES

1. Smirnoff
Smirnoff proved its mettle again this year growing its total score by 7%. It grew from an already dominant position to further cement its authority on not only the vodka category but the spirits sector as a whole. This seemingly unstoppable march from Smirnoff is propelled by a number of elements. Its focus on heritage and quality fuels its enviable brand image. Its sensitive launch of new flavour variants without saturating the market has proven effective in increasing volumes and brand relevancy. Its position in a category that’s versatility lends itself to the cocktail and mixer market as well as being gender neutral is also fortuitous. Its positioning is careful sculptured and managed by owners Diageo and we expect Smirnoff to continue its forward momentum.

2. Johnnie Walker
Like Smirnoff, Johnnie Walker dominates its category. However, where Smirnoff is over twice as large as its nearest competitor, Absolut, Johnnie Walker is nearly four times larger than its nearest Scotch rival Chivas Regal. With an impressive increase in volumes coupled with a 2% improvement in its brand score, Johnnie Walker increased its total score by 6% in 2009. Being under the same ownership as Smirnoff, with Diageo, Johnnie Walker is in a privileged position within a company that appears able to do no wrong.

3. Bacardi
Bacardi also enjoys the enviable position of being category leader by a substantial margin. Its volumes are over twice that of Diageo’s Captain Morgan with few others coming remotely close to this. Its close relationship with music, highlighted by the signing of dance act Groove Armada in 2008 and continued presence at music festivals throughout the world assists the brand in recruiting its target audience. This constantly refreshes the brand bestowing an edgy cool appeal. Bacardi is all but the defining name of the rum category and looks likely to uphold this position into the future.

4. Martini
Martini’s revival mimics that of its most infamous aficionado, James Bond. The integration of the new bottle design with contemporary identity helped reverse the brand’s outdated image. Volumes have risen, the brand is scored 8% stronger and its total score is up 6%. This reinvigoration also coincides with – or perhaps Martini would say created - a retro revival of nostalgia. Martini capitalized on this with a modern twist by increasing its relevance in the mixer market. Like many of its top 10 counterparts, Martini dominates its category and, like Barcardi, is asked for specifically by name. This is a great revival story and one which will hopefully continue.

5. Hennessy
The Hennessy family of Cognac products lead in key US and Asian markets. The brand is three times bigger than Martell, its nearest rival and continues to grow. Its brand score reflects this achievement, growing 5% and contributing to its total score increase of 4%. Hennessy’s support of popular artists and events endorses its premium credentials, making it the brand of choice for the discerning consumer. These selected marketing activities support Hennessy’s range of five premium aged Cognacs, targeting different consumer profiles, budgets and tastes. Hennessy is well managed brand which is destined to maintain its leading market position.

6. Absolut
Under the new ownership of Pernod Ricard, Absolut has flourished. Even without the contributions of Pernod Ricard, Absolut was a great brand with premium positioning, brand communications and volumes growing globally – importantly in the US which drives a lot of its profits. With Pernod Ricard, Absolut has the potential to continue this upward trajectory as the leading premium vodka with truly international credentials. Its total score increase of 4% was boosted by its brand score, up 3%, and an increase in its volumes which will be developed further under the stewardship of Pernod Ricard. Possibly the only genuine rival to Smirnoff.

7. Jack Daniel’s
The mother and father of American whiskey continues to grow. Jack Daniel’s has the appeal, positioning and image to expand its traction in international markets as well the its domestic US market. With a 3% rise in brand score and total score, Jack Daniel’s has so far proven resilient to the economic travails in the US. Whether it will continue to be able to counter this will be a story for next year; but for this year it’s a job well done and we expect to see continued growth.

8. Chivas Regal
Chivas Regal has been brought back very quickly since its transfer to the Pernod Ricard portfolio. Pernod Ricard’s management has successfully powered ahead in the key US and Far East markets, building the brand’s equity and volumes. Chivas Regal is strengthening its position as one of the leading aged whisky brands and is set for continued growth. Its brand score and total score increased 3% and 2% respectively enabling the brand to maintain its place in the top 10 of The Power 100.

9. Baileys
Another Diageo brand which dominates its market, Baileys continues to defy entry to all other possible competitors. It steadily grew its volumes, brand score, up 4%, and total score, up 2%. The addition of flavour variants Mint Chocolate and Crème Caramel contributed to the increase in brand relevancy supporting sales of its core standard product.

10. Ballantine’s
Ballantine’s is the strongest standard blend in Europe. It continues to hold its position under Pernod Ricard’s management, growing its relevance in the aged premium segment most notably in the in Asian markets of Korea and Japan. Although Ballantine’s brand score fell by 1%, its total score grew by 1%, fuelled by a growth in volume. A brand with phenomenal credentials in key Asian markets and set for continued growth.

7. Top Sectors
See report for charts

8. Strongest Brands
See report for charts

9. Biggest Brand Owners
See report for charts

10.Countries of Origin
See report for charts

11.The Top 100
See report for charts