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Brand Valuation Company Releases Listing of "Most Valuable Cosmetic Brands"

Posted: April 9, 2013

Brand valuation and marketing company Brand Finance released its annual study of the top 50 most valuable cosmetics brands. The company calculates brand value using the royalty relief approach. Brand value is essentially the cost that a third party would have to pay to license the use of a brand. Brand strength analysis is used to determine the royalty rate, and brand strength analysis benchmarks the strength, risk and future potential of a brand relative to its competitors. This takes into account financial metrics such as net margins, average revenue per customer, marketing and advertising spend as well as qualitative measures such as brand affection and loyalty. Brands are then awarded a brand rating, a letter grade, similar to a credit rating from AAA+ to D. Having been determined based on the brand strength, the royalty rate is then applied to revenue figures to determine the brand value.

For the 2013 listing, despite a very slight brand value fall, Olay held its dominant position at the top of the BrandFinance Cosmetics 50 table, with a value of $11.7 billion. However, Olay’s lead at the top has shrunk from $4 billion to $3 billion following the growth of L’Oréal. The French giant has continued its progression up the rankings, having moved from fourth to third last year, it is now second. Brand value growth of $952 million, more than any other brand, means its total brand value is now S$8.7 billion.

L’Oréal’s success hinges on shrewd exploitation of its French heritage. France’s nation brand is synonymous with luxury, helping to drive $26 billion worth of luxury goods exports in 2012. L’Oréal has contributed to this trend, targeting emerging markets such as Brazil and China to achieve revenue growth of 12% last year.

L’Oréal is followed in the BrandFinance Cosmetics 50 by Neutrogena, Nivea and Lancôme, which have all recovered well from brand value falls last year. Sixth place Avon is this year’s biggest casualty. Down from second last year, it lost $2.7 billion of brand value this year. The $2.3 billion lost last year means Avon’s brand value is down $5 billion on 2011 and now stands at just $5.2 billion. The particularly dramatic brand value falls suggest low levels of investor confidence following a revenue drop of 5% and a loss of $42.5 million in 2012.

Commenting on the results, Mary-Ellen Field, chairman of Brand Finance Australia, stated, “The global beauty industry continues to do, well, beautifully. With the increasing wealth of women in developing economies we have, not surprisingly, seen the sales of beauty products in these countries growing. Cosmetic halls in department stores throughout the world continue to be exciting places despite growing competition from Internet sales.”

Below is the full, 50-place list from Brand Finance for “The World’s Most Valuable Cosmetic Brands:”

  1. Olay (2013 brand value: $11.709 billion)
  2. L’Oréal (2013 brand value: $8.696 billion)
  3. Neutrogena (2013 brand value: $6.94 billion)
  4. Nivea (2013 brand value: $5.843 billion)
  5. Lancôme (2013 brand value: $5.508 billion)
  6. Avon (2013 brand value: $5.169 billion)
  7. Dove (2013 brand value: $4.242 billion)
  8. Estée Lauder (2013 brand value: $3.87 billion)
  9. Biore (2013 brand value: $3.378 billion)
  10. Christian Dior (2013 brand value: $2.952 billion)
  11. Pantene (2013 brand value: $2.91 billion
  12. Chanel (2013 brand value: $2.813 billion)
  13. Aveeno (2013 brand value: $2.793 billion)
  14. Garnier (2013 brand value: $2.632 billion)
  15. Schwarzkopf (2013 brand value: $2.42 billion
  16. Maybelline (2013 brand value: $2.398 billion)
  17. Clarins (2013 brand value: $2.375 billion)
  18. Shiseido (2013 brand value: $2.203 billion)
  19. Clean & Clear (2013 brand value: $2.196 billion)
  20. Natura (2013 brand value: $1.849 billion)
  21. L’Occitane (2013 brand value: $1.698 billion)
  22. Johnson’s (2013 brand value: $1.513 billion)
  23. Lux (2013 brand value: $1.501 billion)
  24. MAC (2013 brand value: $1.382 billion)
  25. Kérastase (2013 brand value: $1.36 billion)
  26. Redken (2013 brand value: $1.285 billion)
  27. Rexona (2013 brand value: $1.203 billion)
  28. Biotherm (2013 brand value: $1.174 billion)
  29. Vichy (2013 brand value: $1.17 billion)
  30. Oriflame (2013 brand value: $1.151 billion)
  31. Matrix (2013 brand value: $1.133 billion)
  32. Clearasil (2013 brand value: $1.127 billion)
  33. Rimmel (2013 brand value: $1.109 billion)
  34. Yves Saint Laurent (2013 brand value: $1.092 billion)
  35. The Body Shop (2013 brand value: $1.063 billion)
  36. Pola Orbis (2013 brand value: $1.017 billion)
  37. Sunsilk (2013 brand value: $902 million)
  38. Clinique (2013 brand value: $885 million
  39. Softsoap (2013 brand value: $826 million)
  40. Irish Spring (2013 brand value: $655 million)
  41. Coty (2013 brand value: $562 million)
  42. Revlon (2013 brand value: $561 million)
  43. Elizabeth Arden (2013 brand value: $502 million)
  44. Eucerin (2013 brand value: $487 million)
  45. RoC (2013 brand value: $481 million)
  46. La Roche-Posay (2013 brand value: $456 million)
  47. Kosé (2013 brand value: $452 million)
  48. Head & Shoulders (2013 brand value: $423 million)
  49. Kiehl’s (2013 brand value: $416 million)
  50. Speed Stick (2013 brand value: $402 million)