Canadian Tech Thrives in Turbulent COVID Economy, with Shopify More Than Doubling in Brand Value
Though Canada’s tech industry is still comparatively small compared to traditional sectors, it is the fastest-growing sector in the Brand Finance Canada 100 2021 ranking, with tech brands growing by 56% on average year-on-year.
Shopify more than doubled in brand value to $828 million, making it the fastest-growing brand in the ranking. The brand was the most exciting new entrant to the ranking last year, and it has exceeded expectations after record-breaking growth. Shopify grew in brand value by 113%, jumping up 38 spots to rank 60th overall. Given its current growth trajectory, we expect Shopify to break into the 25 most valuable Canadian brands within the next three years.
Through multiple partnerships with large brands such as Pinterest, Facebook and the Libra Association, Shopify had its best year to date, announcing record breaking sales of $1.9 billion for Black Friday – a 75% increase on last year – and phenomenal e-commerce growth following the onset of the pandemic. On top of breaking sales records, Shopify has been highly investing in sustainable technologies and helping small businesses around the globe recover from COVID-19, including the launch of Shopify Capital to provide fast relief to cash-strapped businesses across the country.
“With the onset of the pandemic, tech brands have experienced unprecedented demand for their products and services. At the same time, across sectors, brands which have pushed the boundaries of technological innovation have remained a cut above the rest, able to pivot their business to adapt to consumers’ changing needs. 2021 is the final call to get on board for all brands still stuck in the 20th century.”
Charlie Scarlett-Smith, Director, Brand Finance Canada
While Shopify is the fastest-growing, Constellation Software (up 43% to $3.5 billion) is the most valuable Canadian tech brand, jumping up eight spots to rank 24th overall. Alongside an active inorganic growth strategy, Constellation Software continues to excel and grow rapidly with its business model of managing and building vertical market software businesses.
Canadian banking sector marks decade-long lead in ranking
Stable, trustworthy, and internationally reputable financial services are the heart of the Canadian economy. Each year the ranking’s Top 10 is dominated by financial services brands. Although the Canadian banking sector declined by 52% year-on-year, the sector ranks 3rd in overall brand value globally – behind China and the United States. Financial services are also the leading industry in the Brand Finance Canada 100 2021 ranking for the 10th consecutive year, with a cumulative $71.2 billion – accounting for makes up nearly 40% of the ranking’s overall brand value.
Banking remains a consistently key economic driver for the country, even in the face of COVID-related global financial uncertainty. Additionally, Canadian banks have pledged an industry-wide commitment to environmental sustainability, dedicated to achieving a net-zero economy by 2050.
TD (down 1% to $21.0 billion) maintains its lead as most valuable Canadian brand after reclaiming the title last year from second-ranked RBC (up 2% to $20.8 billion). While TD’s overall performance is impressive given the hostile economic conditions brought on by the pandemic, marginal brand value growth from RBC has seen the gap between the two competitors close to just $197 million. Third and fourth place in the Brand Finance Canada 100 2021 ranking also go to banking brands for the third year running, with BMO (down 4% to $11.9 billion) in 3rd, and Scotiabank (down 11% to $11.9 billion) in 4th.
Insurance brands weaken in the face of the pandemic
Seven insurance brands feature in the Brand Finance Canada 100 2021 report, comprising 11% of the ranking’s total brand value. The most valuable of these is Canada Life ($9.4 billion), ranking 7th overall despite experiencing an 8% dip in brand value due to COVID-related factors, such as higher risk and lower long-term growth prospects.
The strongest insurance brand in the ranking is Sun Life, with a Brand Strength Index (BSI) score of 76.6 out of 100, dropping from last year’s AAA- rating to and AA+. This means that no insurance brands rank in the nation’s top ten strongest brands for 2021. Sun Life’s decrease in Brand Strength is due to weaker consumer research scores for familiarity, recommendation, and loyalty. On a positive note, Sun Life was rated in the research as the most ‘accessible anytime & anywhere’ – the metric shown to drive brand consideration most among Canadian consumers.
The next most important attributes for an insurance brand in the market are great customer service – top brand Intact at $2.1 billion – and good range of products – top brand Manulife at $6.7 billion. This shows how the most valuable brands are also those that create perceptions of consumer-centric decision-making processes.
As we head towards a post-pandemic society, insurance brands will need to position themselves intelligently to appeal to consumers emerging in a world with new risks and shifting consumer priorities.
Circle K re-enters top 10 as rebranding efforts continue
Circle K re-enters the top 10 Canadian most valuable brands with a brand value of $7.9 billion and remains Canada’s most valuable retail brand. The most popular brand of Alimentation Couche-Tard's portfolio experienced a growth of 9% over the past year and will be replacing existing Statoil, Mac’s and Kangaroo Express’ branding on stores and service stations around Canada, the USA, Scandinavia and Europe. Circle K also jumped 4.1 points on its Brand Strength Index (BSI) to 57.6 out of 100. While this is sign that the new Circle K mono-brand is taking hold with customers, 57.6 is still a relatively low Brand Strength Index (BSI) score for a B2C brand. We will likely see this number increase as the new Circle K mono-brand starts to set its roots in deeper, and become more prominent, in the fabric of public facing brands.
Long-haul problems for aviation
Canada’s airlines, Air Canada (down 42% to $2.9 billion) and West Jet (down 39% to $594 million) have dropped significantly in this year’s ranking, falling from 19th to 27th and 58th to 73rd respectively. Following several years of record growth, Air Canada's passenger numbers fell by 73% in 2020 as the pandemic sapped demand for air travel.
After announcing a $1.5 billion loss for Q4 2020 – in what Air Canada’s chief executive called the ‘bleakest year in aviation history’ – the airline’s $238 million purchase of Transat A.T. is a hopeful move towards a slow recovery. West Jet, however, views the deal as unfair competition for the industry, with West Jet CEO stating that ‘when Canadians look to explore the world and reunite with family and friends once again, they will face fewer choices and higher fares’.
“Few sectors have been as deeply affected by the pandemic as the aviation industries. These brands are no stranger to rough patches, from the 2001 terror attacks and the 2008 financial crisis, to more recently the growing spotlight on their contribution to the climate crisis. The road to recovery and hopes are pinned on the speedy and successful roll out of the vaccines to open borders and kick-start the global economy once again.”
David Haigh, CEO of Brand Finance
Crown Royal defends its purple throne
Crown Royal (down 9% to $2.1 billion) maintains its title as Canada’s strongest brand for a second consecutive year with a Brand Strength Index (BSI) score of 85.8 out of 100. Crown Royal is also one of the only two Canadian brands to achieve a AAA brand rating, the other being RBC with a Brand Strength Index (BSI) score of 85.5 out of 100.
The Brand Strength Index (BSI) is a scorecard which benchmarks the relative strength of a brand against its competitors. The scorecard is populated by brand strength attributes relevant to the sector/industry. Among others, these key measures include: brand investment levels, awareness, familiarity, consideration, staff satisfaction, and corporate reputation. These are familiar measures to brand specialists and are a key component of our brand valuation methodology.
Crown Royal had already experienced supply shortages prior to the pandemic, and with more truck drivers unable to cross borders while also opting to stay at home for safety reasons, demand outweighed supply capacity leading to reduced sales and a drop-in brand value, despite its favorable Brand Strength rating.
O&G brands face close to 20% average decline in brand value
The Canadian oil and gas (O&G) industry has had a dramatic year, with O&G brands dropping in brand value by an average 18%. Ten out of the seventeen Albertan brands in the Brand Finance Canada 100 2021 ranking are from the O&G sector, with fastest-falling Petro-Canada (down 35% to $1.,6 billion million) and Cenovus (down 32% to $1.,1 billion) naturally hit hard by historical lows in O&G prices due to decreased demand, as well as oil production conflicts between Saudi Aribia and Russia.
Canadian O&G brands were forced to cut production and human resources leading to a reduction in brand value across the board, save for TC Energy which remained stagnant at $1.5 billion. Alberta has the third-largest crude oil reserves in the world with 166.3 million barrels in Alberta alone, meaning the next few years will be crucial for O&G and the economy.