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SA's most valuable brands could be a source of growth and job creation for the company, says the head of Brand Finance.
SA's most valuable brands could be a source of growth and job creation for the company, says the head of Brand Finance.

SA's most valuable brands

MARKETING NEWS

By Jeremy Maggs - Jul 22nd, 09:34

SA's most valuable brands could be a source of growth and job creation for the company, says the head of Brand Finance, which has just released its latest report on the strongest and best performing local brands. 

If ever there was a case for companies to pay more attention to brand development, the latest Brand Finance list of top SA brands makes the point. Those that feature are defying a struggling SA economy and recording healthy brand value growth, outpacing the country’s GDP, with a combined 16.1% brand value growth rate year on year. And the top 10 have recorded an impressive 19.8% growth.

Telecoms companies remain the giants in the brand room, claiming first and second position. MTN’s brand value is up 15% to R50.3bn, while rival Vodacom’s is up 21% to R33.3bn despite revenue losses in its SA business. Data price wars between the two have left smaller brands struggling to compete, though their brand value also increased over the past 12 months. Telkom is up 15% to R5.9bn and Cell C by just 5% to R3.9bn.

The banking sector remains SA’s most valuable sector. FNB’s brand value has risen 32% to R25.5bn, Absa’s by 25% to R23.5bn and Standard Bank is up 22% to R22.5bn.

Brand Finance CEO David Haigh says: "The impressive performance of SA’s most valuable brands poses a potential source of growth for the economy that, in turn, could lead to increased job creation and funds flowing to the fiscus."

In any global brand value list beer is always a strong performer, and SA is no exception. Castle Lager has jumped into the top 10 for the first time, with its brand value increasing 19% to R16.6bn. The brand continues to benefit from its multiple sports sponsorship partnerships and from successful marketing drives, most notably the #SmashTheLabel campaign, which encouraged South Africans to unite against discrimination.

Three other beers enter the ranking for the first time: Carling Black Label (up 26% to R12.7bn), Hansa Pilsener (up 13% to R4.2bn) and Soweto Gold Superior, a home-grown brand acquired by Heineken, which is up 35% to R2.9bn.

Health-care brands have suffered across the board. Mediclinic is down 50% to R5.8bn, Netcare shed 40% to R3.2bn, and Life Healthcare is 17% weaker at R1.9bn. They have a combined market share of 83% of the national private health facilities market and have faced mounting criticism that the sector is too concentrated.

SA’s largest sugar producer, Tongaat Hulett, has dropped out of this year’s ranking following an accounting scandal and is being investigated for overstating its 2018 results.

Oil company Engen, SA’s fastest-growing brand, had a 67% rise in brand value to R6.7bn.

Clicks’s brand increased 59% to R6.1bn.

In addition to measuring brand value, Brand Finance evaluates the relative strength of brands based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. Capitec (up 15% to R7.8bn) defends its position as SA’s strongest brand.

Jeremy Sampson, head of the local arm of Brand Finance, says SA needs to move away from a "commodity culture" to a brand culture. "Brands are invariably a company’s major assets. How many boards have directors who even understand that?"

Business Live 

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