As the COVID-19 pandemic wreaks havoc on the global and national economy, Brazil’s top 50 most valuable brands could lose up to 16% of brand value cumulatively, a drop of nearly US$9.5 billion compared to the original valuation date of 1st January 2020.
Looking beyond Brazil, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak.
Brand Finance has assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on 1st January 2020. Based on this impact on enterprise value, Brand Finance estimated the likely impact on brand value for each sector. The industries have been classified into three categories – limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10% brand value loss), and heavy impact (up to 20% brand value loss) – based on the level of brand value loss observed for each sector in the first quarter of 2020.
The banking sector dominates the Brand Finance Brazil 50 2020 ranking, with banks claiming the top four spots and accounting for 41% of the total brand value, equating to an impressive US$24.5 billion. The journey ahead, however, will not be easy as banking brands could lose up to 20% of their brand values as a result of the Coronavirus pandemic, as the whole industry negotiates the high volatility in global capital markets. This, paired with major economic headwinds across the nation, means that banks will have to rely on the strength of their brands more than ever, if they are to successfully weather the storm.
Eduardo Chaves, Managing Director, Brand Finance Brazil
Itaú has retained the title of Brazil’s most valuable brand with a brand value of US$6.8 billion for the 4th consecutive year, however second ranked Bradesco is continuing to close the gap behind the leader following a solid 10% brand value increase to US$6.7 billion. Bradesco has heavily focused on innovation, including launching Bradesco Artificial Intelligence – making it the first bank to deploy AI. Furthermore in 2019, Bradesco became a signatory of the UN Principles for Responsible Banking, showcasing its commitment to its CSR initiatives.
Fellow banking brands, Caixa and Banco do Brasil claim the third and fourth positions in the ranking with brand values of US$4.8 billion and US$4.6 billion respectively. All banks across the nation have been negotiating low inflation levels, as well as structural economic reforms, such as social security reform.
Localiza Hertz is the fastest growing brand in this year’s ranking following a 62% brand value increase to US$576 million, simultaneously jumping 9 places from 33rd to 24th. Following the 2016 strategic partnership between Hertz Global and Localiza – South America’s largest rental car company and the market leader in Brazil – the newly-formed Localiza Hertz has been thriving under its referral and brand cooperation agreements. The brand now serves an impressive 10 million customers, with over 200,000 cars, across 427 location and employing over 6,500.
Lozaliza Hertz, as with other car rental brands across the world, is currently negotiating an extremely difficult trading environment with global lockdowns implemented and travel reaching a virtual standstill. Brand Finance’s analysis shows that car rental brands are moderately impacted which could see them lose up to 10% of their brand values.
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, Renner (brand value up 18% to US$754 million) is the strongest brand in Brazil with a Brand Strength Index (BSI) score of 91.8 out of 100 and a corresponding elite AAA+ brand strength rating.
Boasting an extremely high BSI score, Renner scores well across all attributes in Brand Finance’s global brand monitor study, with particularly high scores for recommendation and CSR. The fashion and lifestyle retailer prides itself on delivering outstanding customer experience through its offering of top-quality products all within its sustainable ecosystem. The brand has been vocal in its commitment to responsible fashion through its sustainability guidelines – responsible suppliers, eco-efficient management, sustainable products and services and engaging employees and customers - as well as through its attention to fulfilling the UN Sustainable Development Goals.
With more than 600 stores across Brazil, Uruguay and Argentina, Renner is now striving towards implementing its digital cycle to provide a fully integrated online and physical shopping experience.