Johnson’s is still the world’s most valuable cosmetics brand, even though its brand value dropped 20% over the past year to US$14.1 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy. The top 50 brands total value has increased by 10% this year, driven by the luxury brands in the table. While the total value of luxury brands in the top 50 has grown by 40%, the rest of the table’s total value has slumped down by 1%. These opposite trends are largely driven by Johnson’s and Chanel, number 1 and 2 in the Brand Finance Cosmetics 50 2019. Johnsons has fallen this year by 20%, and Chanel has grown by 95%, moving from 6th to 2nd in the ranking.
David Haigh, CEO of Brand Finance, commented:
“Growth in the cosmetics market is dependent on a brand fully grasping and meeting the demands of its discerning customer, something which, with the rise of social media and the explosion of vloggers and influencers, is constantly evolving. Whilst pricing, variety, packaging and brand loyalty remain central to repeat business, cosmetics brands which capitalise on their marketing and digital presence, are the ones most likely to prosper.”
Johnson’s under the microscope
As cosmetics giant Johnson’s defends its first-place spot and title as the world’s most valuable cosmetics brand, its ongoing talcum powder and asbestos litigation cannot be ignored. While the baby powder is only a small share of the company revenues, the link to the brand image is 100%. The share of group revenues fell and Johnsons recognised in early 2018 that they needed to relaunch the brand to appeal to millennial mothers. Overall the group’s revenue outlook is shaky because of the ongoing litigation but the burgeoning group of brands under the Johnson’s umbrella will perhaps reignite the brand value in the following year.
Challenger vs luxury brands
Across the cosmetics industry, it is now the challenger brands which seem to be grabbing the most attention through their consumer-focus, inclusive mindset and digital marketing campaigns. However, a lot of these smaller brands fit into the e-commerce only arena as the established cosmetics brands use their weight to keep them smaller challengers out of department stores.
However, it seems logical to think that in-store experiences, such as sampling tones and makeovers, will continue to be important in the customer journey for a while. For mid to high end brands to remain relevant and agile, it is important to build an omnichannel presence. The success seen of luxury brands (grown on average 25% year on year) is a testament to strength and continued appeal of their brands, coupled with adaptability to digital marketing and omnichannel presence.
David Haigh, CEO, Brand Finance, commented:
“The biggest challenge for new cosmetics brands is enticing consumers to trial. Beauty purchases are decisions based on experience, habit and trust. Some feel that this is why the uptake of ecommerce in beauty products has been much slower than in, for example, the apparel sector.”
Star performers: SKII, Chanel and Christian Dior
Japanese skin care brand SK-II, owned by parent company Procter & Gamble, has delivered consistent double-digit growth in fiscal year 2017 and is a notable strong performer in this year’s Brand Finance Cosmetics 50. Skin & personal Care organic sales grew double digits versus one year ago. It is interesting to note that developing markets were up double digits, mostly led by strong growth in China across Olay Skin and SK-II. Developed markets were up and this was led mostly by premium innovation in Skin and Personal Care and SK-II growth in Japan.
In the wake of the passing of Chanel (up 95% to US$11.4bn) designer Karl Lagerfield earlier this year, many have credited him for his tactical strategies of introducing ranges of affordable cosmetics which allowed the aspirational aspects of the brand to be actualised by a wider pool of consumers; those who could only ever aspire to wear Chanel clothing but who could own a perfume or lipstick. Whether Karl’s successor Virginie Viard can continue the brand’s journey is yet to be seen.
Christian Dior (up 57% to US$6.3bn) has seen a stream of successful new perfume launches with high profile brand ambassadors for accompanying campaigns for the likes of Sauvage with Johnny Depp and Joy with Jennifer Lawrence, which has boosted their brand value and presence this year.
Neutrogena sitting pretty as world’s strongest cosmetics brand
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Along with the level of revenues, brand strength is a crucial driver of brand value.
According to these criteria, Neutrogena is the strongest brand in the Brand Finance Cosmetics 50 2019 ranking, with a Brand rating of AAA. With brand strength and trust becoming inescapably crucial to the success of a cosmetics brand, Neutrogena has over the years managed to retain a very loyal customer base and become known as a trusted skin care brand. Having launched a steady stream of high-quality cleansers, creams and masks, accompanied by targeted campaigns and strategic placement of celebrities or beauty vloggers and influencers in their global marketing activities.
Note to Editors
Every year, leading brand valuation and strategy consultancy Brand Finance values the world’s biggest cosmetics brands. The 50 most valuable cosmetics brands in the world are included in the Brand Finance Cosmetics 50 2019 ranking.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Cosmetics 50 2019 ranking.
Brand Finance helped craft the internationally recognized standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671. Brand Finance is a chartered accountancy firm regulated by ICAEW and also the first brand valuation consultancy to join the International Valuation Standards Committee (IVSC).
The methodology used to produce the annual Brand Finance rankings of the most valuable and strongest brands across all sectors and countries has been certified with the Marketing Accountability Standards Board’s (MASB) Marketing Metric Audit Protocol (MMAP).
Data compiled for the Brand Finance league tables and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.