Category Overview | 4 categories rise faster than Top 100, 4 decline
Cultural shifts and trends influence results
Of the 14 categories studied in the BrandZ™ Top 100 Most Valuable Global Brands 2019 ranking, four categories exceeded the overall 7 percent value growth rate, four brands declined, and six brands grew but at a rate under 7 percent.
Luxury led the categories in value increase, rising 29 percent, followed by retail up 25 percent, insurance, 15 percent, and beverages, 9 percent. These categories declined in value: beer, cars, regional banks, and global banks.
To better reflect market dynamism, BrandZ™ renamed two categories: soft drinks becomes beverages; and oil and gas becomes energy. Among the many cross-category trends influencing valuations, the following had particular impact.
- The blurring of category boundaries and the related power of ecosystem brands operating in multiple categories;
- The cultural concern with personal health and wellness, which impacts how people live and the products and services they choose;
- The related concern with the health and wellness of the plant, which makes sustainability a purchasing consideration;
- The desire for more personalized products and services and frictionless engagement with brands;
- The expectation that companies will act responsibly and ethically, which was most pronounced in the negative reaction to privacy breaches by technology brands; and
- The impact of technology itself, which was particularly apparent in financial services.
Alongside these developments, several categories felt the impact of major geopolitical developments, including polarization in the US, Brexit in the UK and Continental Europe, economic weakness and unrest in South America, and US-China trade tension.
Of the categories that increased in value, Luxury brands became more accessible, but luxury products retained their exclusivity. Chinese consumers, an important audience for the category continued to spend on luxury, despite China’s slower economy.
Amazon and Alibaba drove the rise in retail category value, demonstrating the power of ecosystem brands able to use technology to integrate the online and offline buying journey, adding convenience and removing friction. The rise in insurance followed a more sophisticated ability to use data to personalize products and experience.
The beverage category value improved as the slump in consumption leveled and premiumization drove revenue. With the broadened BrandZ™ category definition, two leading Chinese dairy brands joined the category. Both Coke and Pepsi implemented important growth initiatives, with Coke acquiring Costa Coffee and Pepsi acquiring Soda Stream.
The categories that declined were hurt by multiple factors. With beer consumption declining, brewers introduced no- and low-alcohol drinks to appeal to new generations with different attitudes about drinking. Car brands contended with slower sales in China, more mobility options, and the need to develop electric vehicles.
Along with fluctuations in local economies, the banks confronted the rise of fintechs that especially appealed to young people with easier, more transparent options for handling their finances. (For further details please see Categories At-A-Glance and the complete category coverage).