Do you instinctively supply your Super Bowl party with Budweiser? Would you never consider stocking it with Miller instead? Perhaps you thumb your nose at both brands and consider yourself a Heineken devotee. This is the stuff marketing and advertising junkies live for. Beverage brands evoke strong emotions, and companies spend a great deal of time and money connecting consumers with their brands.
Let's take a look at the newly crowned top global beverage brands of 2012. Then we'll see how the companies behind the big brands have recently performed against the S&P 500 index.
Consultancy firm Interbrand publishes an annual survey bestowing top honors on the best global brands. Released last week, this year's Best Global Brands 2012 report uses a proprietary formula assigning brand names a monetary value. Here's a recap of some the top global beverage brands.
Brands (Ranking) in the Top 100
Company Market Cap
Jack Daniel's (81)
Johnnie Walker (83)
Sources: Interbrand, Yahoo! Finance.
Eleven of Interbrand's 100 Best Global Brands are beverages. Four of the top beverage brands include nonalcoholic drinks: Coca-Cola, Sprite, Pepsi, and Nescafe. The remaining seven top beverage brands are alcoholic drinks, including the five listed above, in addition to Heineken and Moet & Chandon.
Of the brands listed in the table above, Coca-Cola, Pepsi, Budweiser, and Smirnoff have secured spots on the Best Global Brands list since its 2001 inception.Since that time, Coca-Cola has retained the coveted No. 1 spot; Pepsi has jumped an impressive 22 spots from No. 44 to its current No. 22. Meanwhile, Budweiser has slipped from No. 26 to its current No. 31. And Smirnoff has lost ground in the rankings, plunging to No. 90 from No. 78.
In the past year, the Pepsi brand has enjoyed the biggest brand value gain of these top beverage companies, soaring 14% since 2011. Diageo's Johnnie Walker brand value climbed 12%. And top-ranked Coca-Cola jumped 8% during the past year. It's not surprising that Johnnie Walker has enjoyed stellar brand value growth. Last year, scotch represented 23% of Diageo's net sales and the company boasts 50% net sales growth in its scotch brands over the past five years. Accordingly, Diageo plans to invest $1.5 billion in Scotch whiskey production over the next several years, due to a global thirst for whiskey coupled with staggering emerging-market growth. These companies will undoubtedly enjoy a huge chunk of their respective growth from developing-market nations in the coming years.
Top global beverage brands = giddy shareholders?
During their publicly traded lives, these companies have returned great profits for their shareholders. However, the past year has unfolded differently for stockholders of these five companies.
Check out how these top global beverage companies performed during the past 12 months.
All five companies enjoyed decent returns over the past year. However, the three alcoholic beverage companies outperformed the S&P 500 while the two nonalcoholic drink makers underperformed the index. In the past 12 months, Anheuser-Busch InBev, Diageo, and Brown-Forman posted extremely impressive 70%, 46%, and 37% total returns, respectively. Meanwhile, Interbrand list veterans and nonalcoholic beverage companies Coca-Cola and PepsiCo each returned roughly 18%.
Foolish bottom line
Remarkably, these five companies boast a combined 650 years of experience, with PepsiCo, founded in 1898, being the youngest of the companies mentioned. Undoubtedly, the longevity of these companies and their respective brands has helped them build worldwide exposure. Sure, a well-recognized brand helps a company gain a foothold in global markets. But, in addition to great brands, successful companies must retain sound financials, a sustainable competitive edge, and good leadership.
Companies like Coca-Cola, Diageo, and PepsiCo have rewarded shareholders handsomely due in part to their great brands and worldwide reach. Profiting from our increasingly global economy can be as easy as investing in your own backyard. Our free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.
The article 5 Best Beverage Brands originally appeared on Fool.com.
Fool contributor Nicole Seghetti owns shares of PepsiCo. You can follow you on Twitter @NicoleSeghetti. The Motley Fool owns shares of PepsiCo. Motley Fool newsletter services recommend Diageo plc (ADR), PepsiCo, and Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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