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BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

overview

Latin America
Eduardo Tomiya Managing Director, South America Andr Galiano Director, South America - BrandAnalytics

BrandZ Top 50 Most Valuable Latin American Brands 2013


Eduardo Tomiya Managing Director, South America Andr Galiano Director, South America - BrandAnalytics

The top 5 positions in 2012 comprised the B2B, services and financial segments; in 2013, the top positions are dominated by beer, bakery, food & personal care, services and B2B, followed closely by retail.

In recent years, a slowdown in Latin American economic growth has been seen in countries such as Brazil, Mexico and Argentina; Chile, Colombia and Peru have enjoyed relatively stable growth, yet still experienced a slight decrease. Although personal consumption has risen in most countries as a result of increased credit and employment rates several other factors have contributed to this slowdown. The global crisis is one of these factors; a combination of the European recession, decrease in demand (mainly from China), a slow recovery by the United States and lower export prices all of which have contributed to the instability of financial markets. And there are other important issues, like the regions increasing current account deficit, the difficulty of accessing formal employment and the differences among the peoples civil and political rights. This last issue is illustrated by the Social Inclusion index developed by Americas Quarterly Organization, where social inclusion consists of an institutional, social-political and attitudinal environment that goes beyond economy, poverty and inequality reduction. The index analyzes 15 indicators, such as GDP growth, investment in social programs, political and civil rights, and financial inclusion and ranks each of the 11 countries relative to each other (1 -11); these scores are then converted into a scale of 1 -100. For the countries that feature in this report, the Social Inclusion Index scores

are: Chile 68.4, Brazil 53.5, Colombia 48.4, Mexico 45.2 and Peru 27.9. Just to compare, the United States score is 64.6. (The index doesnt include Argentina.) However, there were gains and growth in some Latin American countries, both in macroeconomic policy and in civil and political rights. In Brazil and Chile, high levels of social mobilization put a lot of pressure on the government to pay more attention to social issues. The best example of this social mobilization came in this summers protests in Brazil, seen all over the world. The first big demonstration, held simultaneously in various Brazilian cities, was a response to an increase of R$ 0.20 in bus fares. Widespread, organized and spread via the Internet, these demonstrations forced Governors and Mayors to give a swift response to the Brazilian people. A week later, all fares were returned to the previous prices. Other demands followed this first challenge, namely improvements to health, education, security and the fight against corruption. The giant had awakened. Yet, despite such bold changes, some Latin American countries are still experiencing very strong political interventionism Venezuela, Argentina, Ecuador and Bolivia, for example. A sharp reminder of just how complex and diverse Latin Americas development is and will continue to be.

The headline news


Despite the global crisis and other factors that have negatively impacted upon the Latin American economy (such as inflation, exchange rates, and a fall in commodity prices), in 2013 the total value of brands in the BrandZ TM Top 50 Most Valuable Latin American Brand Ranking 2013 added up to US$ 135.3 billion, not far off 2012s value of US$ 135.7 billion. This relatively sustained value shows the strength and resilience of leading Latin American brands.

A good year for beer


The most valuable brand this year is the abovementioned Mexican beer Corona (US$ 6.6 billion) with a 29% growth a brand that enjoys a solid positioning and is highly regarded by consumers, not only in Mexico, but also overseas. The runner-up in the BrandZ TM Latam Top 50 2013 ranking is another Mexican brand: Telcel. Its brand value adds up to US$ 6.6 billion, a 22% decrease when compared to 2012. Like Telcel, quite a few brands have lost value this year but other brands in the alcoholic beverages segments compensate for that loss: Skol, Brahma, Antarctica and Bohemia (Brazilian beers) have all significantly increased their brand value. Modelo, another Mexican beer brand, has also improved considerably.

Change at the top


The most important change seen in the BrandZ TM Latam Top 50 ranking was the segment shift in the number one spot. Last year, the oil sector headed the list; this year we see a beer brand at the top, Corona. Its success is not isolated, several beer, bakery, food & personal care brands have increased their value and in fact, there are three brands from the category in the Top 10, all of them beers significantly changing the face of the ranking. In 2012, Petrobras, the Brazilian oil company owned by the government, held the number one spot. This suffered a big drop in brand value (from US$ 10.6 billion in 2012 to US$ 5.8 billion in 2013, a decrease of 45%) mainly due to devaluation of the commodity in the international markets which also affected other companies in the oil & mining sectors.

Newcomers and growing segments


In the beer sub-segment guila and Poker (Colombia), and Crystal (Peru) make their debut in the BrandZ TM Latam Top 50. Financial is another segment which saw three new entrants: BCP, Interbank (both Peru), and Banorte (Mexico). Retail also welcomed a newcomer, Soriana (Mexico). Other segments such as bakery, cement, food, retail and cosmetics also performed positively, growing by 49%, 36%, 35%, 13% and 12%, respectively.

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013


# Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013 # Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013 # Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013 # Brand

Argentina

Brazil

Chile

Colombia

Mexico

Peru

Brand Value (US$ Mil.) 2012 2013

Brand Contribution Index

Brand Value Change 2012-2013

1 2 3 4 5 6 7 8 9 10 11 12 13

5,114 6,620
Beer

29%

14 15 16 17 18 19 20 21 22 23 24 25 26

3,318 3,537
Retail

7%

27 28 29 30 31 32 33 34 35 36 37 38 39

1,156 2,066
Retail

79%

40 41 42 43 44 45 46 47 48 49 50

1,251

1,281

2%

Financial Institution

8,449 6,577

-22%

2,585

3,281

27%

1,494 2,034
Cement

36%

3,074
Energy

1,272

-59%

Communication Provider

Communication Providers

4,698 6,520
Beer

39%

3,964 3,274
Airline

-17%

1,496
Food

1,993

33%

1,361
Retail

1,248

-8%

10,560 5,762
Energy

-45%

2,815 3,204
Energy

14%

1,980
Retail

1,932

-2%

1,116
Retail

1,190

7%

5,263
Retail

5,611

7%

3,465 3,009
Financial Institution

-13%

1,636

N/A

Retail

1,187

N/A

Financial Institution

6,690 5,492
Financial Institution

-18%

2,511
Retail

2,992

19%

1,398
Retail

1,578

13%

1,095

N/A

Financial Institution

4,240 5,137
Energy

21%

1,995
Bakery

2,976

49%

1,567

N/A

762
Retail

1,046

37%

Financial Institution

4,336 4,454

3%
*

2,656 2,768

4%

1,699
Retail

1,558

-8%

778
Food

1,036

33%

Communication Provider

Communication Provider

6,606 4,006
Financial Institution

-39%

Beer

2,487

N/A

1,834
Retail

1,465

-20%

697
Beer

1,010

45%

Beer

3,903

N/A

2,842 2,466
Financial Institution

-13%

4,574 1,427
Financial Institution

-69%

1,708
Mining

1,009

-41%

2,359 3,803
Beer

61%

1,244
Beer

2,301

85%

Beer

1,401

N/A

1,143

992

-13%

Financial Institution

3,307 3,707
Cosmetics

12%

2,414 2,094
Financial Institution

-13%

1,168
Retail

1,286

10%

*Claro is based in Mexico but has no operations there.

3,109 3,632
Financial Institution

17%

1,352

2,091

55%

851
Beer

1,284

51%
Source: BrandAnalytics and

Financial Institution

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

LATIN AMERICA

Value Distribution by Country


The BrandZTM Top 50 Most Valuable Latin American Brand Ranking 2013 reveals an interesting shift as far as each country contribution is concerned: Mexico overtakes Brazil in value terms with a 29% share, and is now the main contributor. Brazil fell to second position, dropping from 34% to 28% of the total contribution.
Petrobras dramatic devaluation in the capital markets and resulting drop in brand value (by 45%) was a significant factor in Brazils lower ranking in the BrandZ TM Latam Top 50, but so too was the crisis in the countrys financial segment. In order to stimulate consumption and companies investments, the government lowered the basic interest rate and pressured public and private banks to reduce the cost of loans and consequently their spread (the difference between what financial institutions receive in interest compared to what is given back to investors). All banks had to adhere to this policy in order to maintain competitiveness, and the scenario led to lower incomes. Mexican brands grew from 24% to 29% in their overall contribution to the value of the BrandZ TM Latam Top 50. Despite the decline of Telcel the increase in value was led by the beer brands, and banking and retail sectors also performed positively. The decrease in the brand values in the communications segment can predominantly be explained by a drop in some companies market value, leaving investors insecure. Argentina still shows signs of uncertainty. The combined value of its brands dropped considerably and now the country makes up only 1% of the value of the BrandZ TM Latam Top 50 (from a more representative 3% the previous year). The poor performance in the oil industry (the Argentinean main driver of value) is responsible for most of this decline. Chile and Colombia in effect maintained their contributions to the total BrandZ TM Latam Top 50. Its worth noting that, despite having a much smaller economy compared to Colombia and Argentina, Chile holds third place in total contribution, which clearly shows the power of some of its well-positioned brands (such as Falabella), helped by the fact that Chile is now considered the most globalized country in the region, having established visa agreements with the United States and trade agreements with over 50 other countries.

Latin American Brand Value % Contribution By Country


2012
Colombia 16% Latam 3% Argentina 3% Brazil 34%

2013
Colombia 17% Latam 3% Peru 3% Argentina 1% Brazil 28%

Mexico 24% Chile 20%

Mexico 29% Chile 19%

Country contribution % change 2012-2013

Brazil -17%

2012
Chile -8%

Mexico 22%

Colombia 3% Latam 3% Peru N/A Argentina -66%

Source:

BrandAnalytics

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

LATIN AMERICA

Brand Value By Industry Sector


2012
Beer, Bakery, Food & Personal Care 17% Financial Institutions 24%

2013

B2B 13% Beer, Bakery, Food & Personal Care 29% Financial Institutions 23% Retail 20%

Performance by Industry Sector


Beer, Bakery, Food & Personal Care
This is the leading segment in value contribution in the BrandZ TM Top 50 Most Valuable Latin American Brand Ranking 2013, with a strong increase of 73%. Within this category, beer is the main sub-segment, representing 76%, with growth driven by Mexican and Brazilian beer (the Brazilian beer brand Brahma had the strongest growth in the region, 61%). The success of the beer sub-segment is driven by the capital markets financial performance of the organizations that own the brands, such as Anheuser Busch, Sabmiller, Grupo Modelo and CCU, which has been sustained by the beer brands positioning and equities. However, the strong performance is a direct result not only of proper management, but also an increase in consumption and of brand contribution.

Services 22% Retail 19% Services 15%

B2B 18%

Industry Sector Brand Value % Change


Brand Value ($ M) 73% Beer, Bakery, Food & Personal Care 5% Retail -8% Financial Institutions -25% B2B -31% Services 39,040 26,696 30,788 18,418 20,354

Source: BrandAnalytics

Comparison With Other BrandZTM Brand Rankings


In the BrandZ TM Top 100 Most Valuable Brands Global Ranking, technology is the leading category, whereas in the BrandZ TM Top 50 Most Valuable Chinese Brands, the service category leads.

B2B (energy/oil, mining & cement)


This category showed a decrease of 25%. The drop was predominantly seen across Petrobras, YPF and Vale, due to falls in the commoditys value and exchange rate.

Category
Technology B2B Beer, Bakery, Food & Personal Care Financial Institutions Retail Services Others
Source: BrandAnalytics and

Latam

Brazil

Mexico

Chile

Colombia

Peru

Argentina China* Global**

RETAIL
This category saw an increase of 5%. Falabella and Sodimac (Chile) represent 39% of the category and saw 7% growth. Liverpool (Mexico), the fourth in the category, had the highest growth (79%).

0% 13% 29% 23% 20% 15% 0%

0% 14% 39% 24% 10% 13% 0%

0% 5% 30% 9% 25% 31% 0%

0% 13% 3% 16% 57% 11% 0%

0% 22% 28% 42% 6% 2% 0%

0% 48% 22% 5% 0% 25% 0%

0% 48% 22% 5% 0% 25% 0%

15% 8% 10% 42% 2% 23% 0%

25% 12% 20% 16% 7% 13% 7%

SERVICES (Communication Providers & Airlines)


The biggest category fall, at 31%. Dominated by communication providers, Telcel (Mexico), this the first brand in the ranking for this sector saw a decrease of 22%.

FINANCIAL INSTITUTIONS (Banks & Insurances)


A fall of 8%, the biggest drop being seen in Brazilian and Colombian banks. Despite this decrease, financial institutions still account for 23% of the total value.

*BrandZTM Top 50 Most Valuable Chinese Brands 2013 **BrandZTM Top 100 Most Valuable Global Brands 2013

The economic rollercoaster ride continues


Isa Telles BrandAnalytics Associate

BrandZ Top 50 Most Valuable Latin American Brands 2013

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Argentinas economy is trying to catch its breath and regain the growth that was in part lost by a drop in agricultural production, low global demand for its manufactured exports, and by an energy deficit. Latin Americas third economy, Argentina grew 8.9% in 2011, with a positive CAGR of 5.1% over the past four years. But it had a significant downturn in 2012, with a growth rate of only 1.9% - a reflection of high inflation and the negative impact that exchange and trade controls had on investments. In 2013, the government has promised to regain growth through a policy of expansion, announcing a 4.9% growth for the August forecast (a record automobile production and a harvest increase will help this recovery). Over the past thirty years, the country has suffered from several attempts to recover its economy: nationalization of industries and social reforms, followed by a privatization program, the linking of its peso to the dollar, and freezing of personal property. The country regained growth after 2003 by fighting corruption, and through debt repayment and development sustainability. Currently, there are positive points in Argentinas economy, such as growth in the industry sections and the creation

of a social development fund. However, the adoption of some policies has led to serious consequences (including inflation, disparity in exchange rates, restrictions on dollar purchase, energy import increase and restrictions on manufactured import) and this has generated market tension. The country still faces social dissatisfaction and some persistent structural challenges such as high levels of corruption, a high rate of unemployment, and the need for better health services and education. The current trajectory encompasses some important considerations, such as the reduction of transactions with partnering countries (e.g. Brazil), prohibition of outward remittance, inflationary pressures, demands for more investments in energy, concerns over bad management of public finances, and the return to protectionism in order to strengthen local industries. Last year, the government declared YPF as being of national public interest and expropriated 51% of the shares of the Spanish oil company Repsol. While the partnership between YPF and Chevron remains in a letter of intent, changes are still required to the countrys energy policy.

ARGENTINA

Capital City Buenos Aires Currency Argentine New Peso Area 2.78 million km2 Population (thousands) 41,072 (2012) Population growth rate (annual) 0.8% (2010-2015) Life expectancy 76.01 years (2012) Literacy rate of 15-24 year olds 99.2% (2010) Unemployment rate 7.2% (2011) 7.3% (2012)

argentina key facts

Carlos Dadoorian, BrandAnalytics Consultant

Annual GDP at current prices

Total at current prices (millions) US$477,028 (2012) GDP per capita (annual) US$11,614 (2012) Growth rate 1.9% (2012) Countrys share in regional GDP 8.4 % (2012) CAGR (last four years) 5.1% Foreign direct investment (millions) US$7,183 (2011) US$6,401 (2012)

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BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

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argentina

Argentinean Brand Value


Roberto de Napoli BrandAnalytics Associate

Argentinean brands have experienced a very big drop in the BrandZ Top 50 Most Valuable Latin American Brand Ranking 2013, losing almost half of their value (43%) with a fall from US$4.7 billion to a mere US$2.7 billion.

Rising tides: consumption and inflation


Mr. Martn Schijvarg Millward Brown, Argentina

2012

Beer 7% Financial Institutions 4% Energy 66%

2013

Beer 22% Financial Institutions 5% Energy 48%

Communication Providers 23%

Communication Providers 25%

Argentinean Brand Value % Change by Sector


-28% Energy 9% Communication Providers 206% Beer 34% Financial Institutions

In recent years, Argentina has managed to sustain the growth of its economic activity. Characterized by strong consumption there are certain industries, such as the automotive and technological (LED TVs, mobile phones and other appliances) that have performed particularly well.
Compared to the global context of economic stagnation in the United States and in several European countries, Argentina has managed to maintain employment rates and the social development funds designed to improve them, including the Plan Trabajar, Jefes y Jefas de Hogar and the Universal Child Allowance. An important feature of the Argentinean economy and approach to employment in various sectors remains collective bargaining (for example over workers pay and conditions). In many cases, this has created agreements at or even higher than the inflation rate, which has exceeded 20% annually over the past five years. (Note that the gap between this figure and INDEC officiala figures of 10% annual inflation is very pronounced). The government has tried to address the sustained increase in the cost of living by controlling prices, with varying results depending on the type of goods. Higher consumption levels have forced Argentina to import more and more energy and gas to meet the growing demand. This has generated strong growth in imports and in order to strike a positive trade balance, the government has restricted imports of many products. Earlier this year it also announced that the tax on credit and debit card purchases made abroad would rise from 15% to 20%.

overall brand value change 2012-2013

-43%

+
Source: BrandAnalytics

Another issue the government has been tackling is the capital leakage caused by the flight to the dollar (a common Argentine response to economic uncertainty). Since 2011, the purchasing of dollars has been restricted to certain commercial activities, leading to a 50% increase of the parallel dollar rate (also know as the blue dollar) this year. This has severely damaged the construction industry in particular, since properties are quoted in dollars and currency disparity between the official and parallel market creates tension, as some sellers want to reap dollars from the sale and buyers face difficulty in obtaining them.

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BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

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argentina

BrandZ Top 5 Most Valuable Argentine Brands 2013


TM
# Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013

Argentinas most valuable brand


YPF (Yacimientos Petrolferos Fiscales) is still the most valuable Argentinean brand, driven by its tradition, strong presence (key in a country with extensive geography) and the emotional attachment derived from the fact that the brand represents Argentinas largest company there is a sense of national pride associated with its name. Its brand value has, however, decreased dramatically to US$ 1.3 billion (a 59% drop) but this is not related as much to brand performance as it is to financial matters and, despite this fall, YPF maintains its place at the top of the Argentinean brand ranking. Part of the reason for the fall in value can be seen as a reaction to the nationalization of the company: 51% of its shares belonged to the Spanish company Repsol until its expropriation by the government in April 2012. With a work model based on the principles of ethics and transparency, quality and security and caring for the environment, the company seeks to lead the way in generating energy for the entire country and is driving growth in a bid to see the nation achieve self-sufficiency. Recently, the company agreed a deal with Chevron to explore 20km2 of the geological site of the Vaca Muerta, the third largest reservoir of its type in the world. According to the government, YPF will be the only company given the rights to lead the project, its administrative investments, and its future commercial exploits for the next 35 years.

Argentina and the digital r/evolution


Pablo Lesulauro CEO, Mindshare Argentina

For marketing and advertising, this shift presents a challenge. Consumers can now broadcast their reaction and responses across a wide forum and do so in real time. And just as Argentinean politics are revealed and examined through political tweets, so too are brands finding themselves on the receiving end of customer comment and opinions through the use of social networks. On the other hand, these new methods of interactive communication are so far largely unregulated. This means that digital communications offer political parties and indeed advertisers a way round restrictions and legal obligations. Argentineans have proved to be avid adopters of social networks and the country is also beginning to see an explosion in the use of online video. The development and impact of multi-platform content is therefore becoming of acute interest. It represents a huge challenge for research, not only because of the myriad of new possibilities, but also in terms of the speed of response that is needed. We are talking about research applied in real time. The world and in particular Argentina cannot afford to ignore how the cultural revolution is affecting at least three different generations. Each of these generations has a different approach to the adoption of new communication technologies, and varying degrees of engagement with them. This new economic, technological, communication and cultural order impacts upon all socio-demographic sectors. For this reason, we can no longer just talk about socio-demographic structures, but must consider cultural socio-demographic segmentation. At Mindshare, we are intent on developing new research methods that enable us to measure and manage the effect of digital communications across this generational and cultural divide. We are creating new R.O.I. and data handling tools, new forms of communication, synergy and interaction in the certain knowledge that the true power of digital communications lies in the hands of those who best understand them.

1 2 3 4 5
Source: BrandAnalytics and

3,074

1,272

-59%
Energy

334

583

75%
Beer

681

423

-38%

Communication Provider

390

242

-38%

Communication Provider

188

143

-24%

Argentina is immersed in an economic, technological and social evolution. Globalization is increasingly influencing its citizens perceptions and digital communications are impacting upon almost every aspect of daily life. The nations embrace of this paradigm shift is reflected in high penetration levels of broadband and mobile phones and in particular the increasing use of smartphones.

Financial Institution

BRAZIL

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BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

19

BRAZIL

Brazilian consumers stand up for their rights


Isa Telles BrandAnalytics Associate

Brazil is in a period of transition. With a CAGR of 2.5% over the past four years, the country had a great 6.9% growth in 2010, but has clearly been in deceleration since, having just a 0.9% growth rate in 2012. In 2013, the US dollar hit the highest rate for the last 4 four years, reaching R$2.14. To control this high, the Central Bank sold at least US$ 876 million in the futures market. Investors became increasingly suspicious and there was a downturn of foreign investments, due partly to government state and economic interventions, and also to high inflation. Seeking better public policies, Brazilians took to the streets to demand more from the government in terms of services (such as transportation, health and education), as well as a stronger stance on the punishment of crimes of corruption. Focusing on short-term policies, with frequent rule changes and low investment in infrastructure, the fiscal incentives promoted had little effect on the countrys productivity.

Other factors contributing to the reduction in growth include the decline in market value of companies dependent on exports (as a result of commodity drops around the world), and the decrease of banking spreads (as a reaction to the interest rate reduction imposed by the government on private banks). This second factor increases access to personal loans, boosting consumption and leveraging the value of brands in the retail sector, but notably reduces the value of brands in the banking sector. Personal loan costs dropped from 9% to around 6% per month, but even at this figure remains very high. In contrast, companies like Ambev (Americas Beverage Company) and Natura have seen their values strengthened, and companies such as BR Foods, Po de Acar Group and ItaUnibanco have started to benefit from mergers and consolidations that occurred between 2010 and 2012.

BRAZIL key facts


Carlos Dadoorian, BrandAnalytics Consultant

Capital City Braslia Currency Real Area 8.51 million km2 Population (thousands) 198,423 (2012) Population growth rate (annual) 0.8% (2010-2015) Life expectancy 73.2 years (2012) Literacy rate of 15-24 year olds 98.1% (2010) Unemployment rate 6.0% (2011) 5.5% (2012)

Annual GDP at current prices


Total at current prices (millions) US$2,252,926 (2012) GDP per capita (annual) US$11,354 (2012) Growth rate 0.9% (2012) Countrys share in regional GDP 39.5% (2012) CAGR (last four years) 2.5% Foreign direct investment (millions) US$67,690 (2011) US$66,137 (2012)

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BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

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BRAZIL

A collision between consumerism and indebtedness


With economic stability and a steadier employment rate, Brazil experienced a phase of increased consumption, giving many of the population access to consumer goods that they once believed to be beyond their reach. However, the perils of easy credit and high interest rates led to an indebted population that was unable to make ends meet, generating a very high default rate. The indebtedness rate has more than doubled in eight years according to Central Bank from 18% in 2005 to about 43% now. This indebtedness is already affecting the decisionmaking process for the purchasing of staples; it may well result in a trade-off where the strongest brands earn the loyalty of consumers by offering the best value combined with an emotional reward.

What Brazilian macroeconomics mean for brands


Aurora Yasuda Millward Brown Brazil

Any plans for strategic development of local or global brands within Brazil must recognize the major demographic, social, economic, cultural and political trends that affect consumption patterns, and the changes that are occurring within them. Here we consider some of the key factors that are shaping the Brazilian consumer profile today.

The formalization of domestic work increases household costs


For a long time, the employment circumstances of many domestic workers were characterized by high informality with limited access to social rights. However, starting this year, this segment formalized its working relationship with access to labor rights from other categories. Thus, the cost for maintaining maids, nannies, elderly caregivers, drivers, caretakers and so on has substantially increased, forcing families into new agreements and arrangements. The impact of this on disposable income for both employee and employer may yet to be fully felt.

The altered age pyramid


Improved quality of life has increased the average life expectancy of the Brazilian population. This, combined with the fact that the large contingent born between 1950 and 1960 the baby boomer generation has now reached maturity and has now begun to change the age structure of the population. The over 65s population represents the highest growth, and may well exceed 4% year-on-year between 2025 and 2030. Meanwhile, the growth rate of the 0 to 14-year-old population has been declining in absolute value from 1990 to 2000. This is due to families having fewer children, even among lower classes (and despite the fact that the infant mortality rate has also shown a downward trend). In 2008, 0 to 14-year-olds represented 26% of the total population and the over 65s accounted for 6%. The projection for 2050 shows a reversal: children will represent 13% while the over-65s are expected to exceed 22% of the population. The value of pester power will perhaps be sidelined for brands by the growing importance of the more considered approach of the older consumer.

Changes in the make-up of the family unit


In a more open society with greater tolerance and acceptance of separation and divorce, new family compositions and household profiles arise and significantly affect consumption patterns: Single-parent families (households with one adult, usually mothers living with their children). Large families where the children return to their parents home with their own children and receive help from grandparents to raise them. Blended families couples in their second or third marriage where their children from previous marriages all live together with them.

Adoption of global consumption patterns, driven by technology


As elsewhere across the globe, Brazil has seen the growth of e-commerce and online shopping; the penetration rates of tablets, smartphones and social networking are also rapidly increasing. This window on the world has strengthened the presence of global brands, but it is the brands that fulfill the mantra of glocalization that are at an advantage. Consumers engage easily with brands that reflect or are part of the local culture. In the face of these major and ongoing changes, brands have greater challenges and responsibilities. Brazil remains a market of great opportunities but to capitalize upon them, brands must consistently deliver something beyond the product or service itself. That something must be differentiated enough to attract the consumers interest, and meaningful enough to merit their engagement and loyalty.

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BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

23

Roberto de Napoli BrandAnalytics Associate

BRAZILIAN Brand Value


Fashion 1% Communication Providers 4% Food 4%

Healthcare 1% Mining 3% Outros 10%

2012

Beer 15%

2012

Brazilian brands have reduced their contribution to the BrandZ Top 50 Most Valuable Latin American Brand Ranking 2013 by 9%, reaching a total value of US$ 53.5 billion.

Financial Institutions 31% Energy 18% Retail 7% Cosmetics 6% Healthcare 2% Mining 2% Outros 12%

2013

Brazils most valuable brand


This year, Skol has increased its value by 39%, reaching US$ 6.5 billion. The brand benefited from the extremely positive financial performance of its parent company, Anheuser Busch. During 2013, Skol continued investing in brand communication to enhance its appeal to young people, for example through platforms such as Rock Skol, Skol Beats, and more recently, Skol Sensation. According to Britains The Drinks Business Magazine, Skol is the fifth most popular beer in the world (across all licensed beers worldwide). In becoming the most valuable Brazilian brand, Skol has surpassed Petrobras, the Brazilian oil company.

Beer 22% Fashion 2% Communication Providers 3% Food 6%

2013

Financial Institutions 24% Energy 11% Retail 10% Cosmetics 7%

brazilian Brand Value % Change by Sector

-9%
Source:

overall brand value change 2012-2013

+62% Beer -29% Financial Institutions -40% Energy +44% Retail +24% Cosmetics +52% Food -9% Communication Providers +46% Fashion +77% Healthcare -35% Mining +2% Outros

A note on Petrobras

Petrobras was Brazils most valuable brand for three consecutive years and in 2012 came top of the BrandZ TM Latam Top 50, but it has now dropped to second place. This is due to a combination of factors: currency devaluation (which in a commodities industry is sharply felt), prices controlled by the government (given that Petrobras is a state-owned company, it is used as a means to keep inflation rates low) and uncertainty surrounding future projects.

BrandAnalytics

24

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

25

BrandZ Top 50 Most Valuable Brazilian Brands 2013


# Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013 # Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013 # Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013 # Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013

1 2 3 4 5 6 7 8 9 10 11 12 13

4,698 6,520

39%
Beer

14 15 16 17 18 19 20 21 22 23 24 25 26

670

972

45%
Retail

27 28 29 30 31 32 33 34 35 36 37 38 39

436

455

4%

Communication Provider

40 41 42 43 44 45 46 47 48 49 50

560

250

-55%
Airline

10,560 5,762

-45%
Energy

589

916

56%
Retail

318

444

39%

241

N/A
Aviation

Communication Provider

6,690 5,492

-18%

810

N/A

216

422

95%
Fashion

258

232

-10%
Retail

Financial Institution

Financial Institution

6,606 4,006

-39%

500

748

50%
Insurance

450

396

-12%
Airline

216

N/A
Drugstores

Financial Institution

2,359 3,803

61%
Beer

519

680

31%

342

390

14%
Healthcare

208

N/A
Food

Loyalty Programs

3,307 3,707

12%
Cosmetics

555

656

18%
Credit Cards

479

382

-20%
Retail

207

N/A
Utilities

1,496

1,993

33%
Food

817

641

-21%

386

361

-7%
Stock Exchange

196

N/A
Food

Communication Provider

4,574 1,427

-69%

412

634

54%
Retail

351

345

-2%
Fashion

195

N/A
Education

Financial Institution

851

1,284

51%
Beer

569

569

0%

318

306

-4%
Education

183

N/A
Real State

Information Technology

762

1,046

37%
Retail

332

513

55%
Retail

236

295

25%
Fashion

185

178

-4%
Retail

778

1,036

33%
Food

295

474

60%
Healthcare

292

287

-2%
Retail

161

N/A
Healthcare

697

1,010

45%
Beer

349

473

35%
Retail

219

280

28%
Drugstores

1,708

1,009

-41%
Mining

187

458

144%
Car Rental

600

260

-57%
Source: BrandAnalytics and

Communication Provider

26

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

BRAZIL

Brazilians harness the power of digital discourse


Gal Barradas Partner and CEO F.biz, Brazil

Brazil has entered the era of technology in almost a single generational leap. Already, it is the third most connected country in the world, and its citizens are gradually becoming more wellinformed, more demanding, more participatory, more aware of their nations problems, but also of its assets and advantages. Well-informed people make more empowered citizens. Lets take, for example, the recent protests in the streets of Brazil. The protests did not occur only in major urban centers, but also in small towns nationwide. Without digital media, the people would not necessarily have been aware of the level of mobilization throughout the country, and the government could easily have underestimated (or concealed) the magnitude and determination of public opinion. While the government is only now taking the first steps in its use of technology to listen to the population and provide better quality services, its clear that

the people have made extensive use of digital media for mobilization on important issues in everyday life. And another phenomenon has occurred. For the first time, Brazil has seen its major media outlets altering their opinions and messaging in response to the influence of popular movements apparently acknowledging the need to align with the people and their expectations in relation to the press. Digital media creates a marvelous paradox: farreaching and able to deliver a world view, at the same time it helps people look more closely at whats happening in their own communities and empowers them to get involved in local issues. Previously, when only mainstream forms of communication media were available, this would not have been possible. All of this changes a society, changes a country.

chile

28

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

29

chile

Economic forecast remains sunny, with some clouds


Isa Telles BrandAnalytics Associate

One of the most globalized countries in the region (in terms of international trade agreements), of the 6 nations covered in, the BrandZ TM Top 50 Most Valuable Latin American Brand Ranking 2013, Chile currently ranks third for forecast growth, at around 4.4% for 2013. It also had the second largest growth in 2012 . With a CAGR of 4.0% over the past four years, the countrys rates of growth from 2010 to 2012 have ranged between 5.9% and 5.6%. Despite a recent deceleration due to a fall in copper prices and a consequent increase in the balance deficit (impacted by the economic slowdown in China), and a drop in investment and domestic demand (according to IMF), there is still a sense of optimism in the country. The financial and economic sectors show a period of stability due to low inflation rates, and subsequent falls in unemployment rates since 2009.

Motivated by the recent agreement with the United States visa waiver program (whose parameters are considered key requirements for developing countries) the country is regarded as the most open economy in the region. It has signed numerous trade agreements and is doing business with more than 50 countries, including the United States, European Union, China and Japan. These treaties are the result of an economic liberalization that began three decades ago with the aim of opening Chiles economy to other markets in the world. It has great competitiveness and a strong retail sector composed of banking institutions and large companies with renowned brands such as Falabella, Lan and Sodimac. The country has a growing labor force and one of the lowest poverty rates in the region; however, protests have arisen throughout the country, demanding better quality in services provided by the government, and greater access to education.

chile key facts

Carlos Dadoorian, BrandAnalytics Consultant

Capital City Santiago Currency Chilean Peso Area 756 thousand km2 Population (thousands) 17,454 (2012) Population growth rate (annual) 0.8% (2010-2015) Life expectancy 78.94 years (2012) Literacy rate of 15-24 year olds 98.9% (2010) Unemployment rate 7.1% (2011) 6.4% (2012)

Annual GDP at current prices


Total at current prices (millions) US$268,310 (2012) GDP per capita (annual) US$15,372 (2012) Growth rate 5.6% (2012) Countrys share in regional GDP 4.7% (2012) CAGR (last four years) 4.0% Foreign direct investment (millions) US$5,477 (2011) US$4,864 (2012)

30

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

31

chile

Chilean consumers make their voices heard


Marcela Prez de Arce Client Service Director, Millward Brown Chile

CHILEAN Brand Value


Roberto de Napoli BrandAnalytics Associate

Chile slightly raises its level of contribution to the BrandZ Top 50 Most Valuable Latin American Brand Ranking 2013 increasing the value of its brands by 3%, to a total of US$29.8 billion.
2012
Airlines 14%
questioning regulations not just product quality itself, but the actual norms regulating that quality. They are focusing on the distinction between whats legal and whats legitimate. This is especially evident in the case of health insurance and retirement funds, where consumer organizations currently have over eighty thousand petitions for legal recourse pending. In the light of this trend, the telecommunications industry has moved a step ahead by establishing self-regulation; something other industries have failed to do. They changed their language and stopped talking about volume in terms of number of megabytes (which by the way, they were not really providing) and responded to consumers new status, proactively heading off potential problems before they could arise. The most recent example regards call centers: the day after a news item appeared denouncing irregularities, SUBTEL simply stopped all sales by phone. The company didnt wait for an investigation, but ended the problem almost instantly. Another example that speaks of sincerity is H&Ms arrival in Chile with a very publicized promise of fair price for fashion; a promise the company has apparently been successful in keeping. H&M is an international brand that probably has experience in these issues, and knows how to relate to consumers on their new terms. It has recognized that in a socially networked economy, every individual is empowered to be either an advocate or badvocate (critic) of a brand. Its clear that Chilean consumers are determined to exercise this power, so brands must hasten to develop strategies to mitigate against its effects and capitalize on its potential for good.

Paper 2%

Beer 2% Retail 59%

In Chile, the growing participation and empowerment of consumers is a hot topic. In fact, consumer complaints are becoming more frequent and have evolved from simple criticism to organized actions. Consumers have become more clear and direct in demanding their rights in general, as well as their rights to information.
Topics of complaint have changed. Whereas previously, criticism tended to centre on retail, and later banking, now there is a return to issues of mass consumption and especially food. This phenomenon has found resonance in the media, generating a proliferation of TV programs dedicated to denouncing breaches, not of civil or human rights, but of consumer rights. The media itself has given rise to a need for new regulations of consumer issues in Chile. As a result, in the second part of this year, a new law will be enacted to regulate nutritional labeling. A clear sign of the strength and impact of consumers increased organizational capacity is the governments recent creation of agencies like SERNAC (Servicio Nacional del Consumidor - National Consumers Service, a Government institution) on finance which protects consumers rights. How are brands reacting to this new context of consumer participation? Insufficiently, it seems. Brands havent redefined their relationship with consumers, who are now clearly social actors as seen especially clearly in online social networks. In Chile, social networks still represent the fastest growing platform for participation and organization, its where consumers express themselves most clearly and fully. But, brands have not yet grasped the fact that the demand coming from these new consumers is for a more horizontal and candid relationship. Instead, brands limit their use of social networks to two areas: promotional advertising and complaint departments. Similarly, brands apparently have misunderstood or ignored the demand for more transparency. Brand managers seem to believe that the more horizontal, candid approach will leave them vulnerable. However, the transparency consumers want doesnt imply a larger quantity of information, but rather more sincerity and honesty, a relationship built around dialogue, not monologue. Consumers seem to be saying, Dont leave me in the dark. And when you do provide information, dont insult my intelligence. Todays consumers demand two things: plain talk, and to be informed about how problems will be resolved. This demand for transparency doesnt necessarily mean a desire for more data or more detail about aspects that dont interest consumers. They just want to be leveled with. Two recent cases exemplify the fact. One study revealed that packaged bread labeled light provides more calories than the regular, unlabelled marraqueta (a traditional Chilean type of baguette). Another study showed that olive oil is not always as beneficial to health as people have been led to believe. So, consumer mistrust is on the rise. Brands make and break promises or are vague and insincere in their communications. Consumers themselves are

Energy 10% Financial Institutions 13%

2013
Airlines 11%

Paper 3%

Beer 2% Retail 57%

Energy 11% Financial Institutions 16%

chilean Brand Value % Change by Sector


-4% Retail +27% Financial Institutions +11% Energy -20% Airlines +11% Paper +29% Beer

overall brand value change 2012-2013

+3%

+
Source: BrandAnalytics

32

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

33

chile

BrandZ Top 15 Most Valuable Chilean Brands 2013


# Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013

Chiles most valuable brand


The biggest selection of products and the lowest prices. This is Falabellas offering a retail brand that sells a wide range of products including domestic appliances, technology, furnishings and clothing. Its scope and scale help explain why it remains the most valuable brand in Chile. With an increase in value of 7% to US$5.6 billion, the company retains its huge power. Its biggest advantages are its integrated retail and financial services, such as insurance, credit and cards, and the consistency of its delivery. Playing a major role in Chileans everyday life, Falabella is also leading Chiles retail expansion to other countries in Latin America such as Argentina, Columbia and Peru, and has become the largest department store in South America.

A thriving economy creates an atmosphere of optimism


Vinicius da Silva
Managing Director of Kantar Worldpanel responsible for Chile, Colombia, Ecuador and Venezuela.

1 2 3 4 5 6 7 8 9 10

5,263

5,611

7%
Retail

3,109 3,632

17%

Today, Chile is one of the most developed countries in Latin America and is expected to continue to grow in terms of quality of life, education, and health, to become a developed country by 2015. The economy is booming. GDP growth has averaged 5% in the last five years due to efficient exchange and interest rate management, focused on attracting foreign investment and on infrastructure.
On a cautionary note, Chiles economy is still dependent on the mining of minerals. Copper provides 20% of the GDP and 60% of the exports, of which 40% goes to China, making Chile heavily dependent on demand from China being maintained. At present however, the strong economic performance is creating a sense of optimism; people save money for a rainy day and invest in education, one of the pillars of the countrys development. Salaries are growing (+5.9%) way above inflation (1.7%), and above GDP growth (5%) while unemployment (6.2%) is rapidly decreasing, especially in the greater Santiago area (1%). These factors are generating a strong increase in private spending (+9%). Chileans are traveling abroad for tourism (+11%), buying more cars (+12%) and spending a lot more on clothing (+30%), according to the National Institute for Statistics. The growth has boosted consumption. On the FMCG front, there is little room for markets to expand since the population growth rate is below 1% and consumption is already high. Growth is due mostly to a new range of more sophisticated products, for example, the health and wellbeing product sector has been one of the main drivers of the economy, with many new products focusing on a healthier lifestyle. Consumption of premium products is also on the rise, with lower income households that had previously only aspired to them, now actually able to afford them. Strong economic growth and investment in the retail industry has had a big impact on the way in which Chileans shop. Proximity to hypermarkets, more disposable income and less time to spend on FMCG shopping trips have changed the way Chilean women conduct their shopping missions. They are significantly increasing the amount of products they purchase on each trip, reducing the frequency of purchase (-16%), while buying bigger pack sizes across more categories in the same trip (+11%). The retail structure is also in continuous development. Chile already has the biggest concentration of modern trade in Latin America (around 87%) with discounters and wholesalers bringing a new dynamic to this market, and also helping to boost private labels alongside the big players such as Walmart and Falabella. Cencosud, Chiles biggest retailer, is increasing its presence in other countries in Latin America too (Peru, Colombia) and gaining the confidence of consumers there due to its high levels of service delivery. As Chiles economy continues to expand, the future looks bright: unemployment and inflation rates are low, so is poverty, and there is a lot of investment in education. With these strengths and others such as the increase in tourism people are now able to invest in consumption of high-end manufactured products and services. They are dedicating more time to themselves by traveling more and buying more clothes, while optimizing their FMCG shopping trips in order to save time.

Financial Institution

3,318 3,537

7%
Retail

3,964 3,274

-17%
Airline
Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013

2,815

3,204

14%
Energy

Brand

1,980

1,932

-2%
Retail

11 12 13 14 15
Source: BrandAnalytics and

948

869

-8%
Retail

690

786

14%
Paper

1,699

1,558

-8%
Retail

564

748

33%
Beer

1,361

1,248

-8%
Retail

600

607

1%

1,116

1,190

7%
Retail

Financial Institution

600

N/A

987

987

0%
Retail

Financial Institution

BrandZ Top 50 Most Valuable Latin American Brands 2013

35

A destination of increasing interest to investors


Isa Telles BrandAnalytics Associate

Colombia is considered to be a stable developing country, showing a CAGR of 4.1% over the past four years and with a forecast growth of 4% for this year. Nevertheless, some of its production sectors have been affected by factors such as decreased oil and coal activities and by the global crisis, which caused a fall in export volume and value of these commodities. With unemployment rates dropping since 2009, the country has been of great interest to investors, as seen in a recorded rise in foreign net investment since 2010. There are a number of reasons for this appeal to foreign investors. The strengthening of national companies (Nutresa, Ecopetrol among others) is one of them, and this has also helped trigger the countrys entry to the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa countries that have been identified as rising economic forces). This empowerment prompted the possibility of investment diversification in other sections of the economy besides oil and mining, such

as manufactured products, food, and retail. A second reason is the free trade agreements signed with the United States, Europe, South Korea and Costa Rica, and a third reason is the countrys investment program and the reorganization of its tax structure. Added to these factors is the increase of consumer credit, encouraging the nations growth. A country once only recognized for its problems (such as conflicts and trafficking), is today attracting attention for its consumption, which is being boosted by the development of the middle class. Although a mild retraction of the industry is expected, sectors such as mining, construction, agriculture and commerce should show improvement. It is a significant change for a country that was until recently dependent mostly on commodities. In this scenario retail, banking and communication brands like Claro (which replaced the Comcel brand), and SabMuller (guila and Poker) are growing in value.

COLOMBIA

Capital City Bogot Distrito Federal Currency Colombian Peso Area 1.14 million km2 Population (thousands) 47,735 (2012) Population growth rate (annual) 1.3% (2010-2015) Life expectancy 73.76 years (2012) Literacy rate of 15-24 year olds 98.1% (2010) Unemployment rate 11.5% (2011) 11.3% (2012)

COLOMBIA key facts

Carlos Dadoorian, BrandAnalytics Consultant

Annual GDP at current prices


Total at current prices (millions) US$369,813 (2012) GDP per capita (annual) US$7,747 (2012) Growth rate 4.0% (2012) Countrys share in regional GDP 6.5% (2012) CAGR (last four years) 4.1% Foreign direct investment (millions) US$5,546 (2011) US$13,771 (2012)

36

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

37

COLOMBIA

Colombia: A country of opportunities

colombian Brand Value


Roberto de Napoli BrandAnalytics Associate

This in turn had a negative impact on industrial activity, which was the only sector of the economy that experienced a contraction (-4.1%) in 2012. However, consumer confidence in the last period was higher than for the first quarter of 2013, and retail figures suggest better consumption performance. Foreign investment represents a great opportunity for Colombia, since the concentration of investment (oil and mining, with 70% of total flows) has changed its composition towards a greater variety of economic activities, such as the manufacturing sector, restaurants and hotels, storage and retail, communications and financial institutions. Likewise, foreign investors have seen that Colombia presents an opportunity to promote big luxury brands, a market that according to entrepreneurs has a potential of one million customers, and 50 million dollars a year. Brands such as Dolce & Gabbana, Mabe, Montblanc and Hublot, have decided to set foot in the country or increase their expansion in different Colombian cities. Alongside growth through foreign investment, the country is facing new free trade agreements: United States (2012) and Europe (2013), South Korea and Costa Rica. These agreements signify a challenge for all actors of the economy (and have prompted displays of public protest) as local products face the entrance of highly competitive global products, backed with financial muscle. Colombias capacity to focus the flow of foreign investment and take advantage of the free trade agreements depends on the increase in consumer confidence. This will see its repercussions in an increase in internal demand and therefore a more productive and strengthened sector able to compete in the global market.

Colombian brands are worth US$ 23.1 billion in the BrandZ Top 50 Most Valuable Latin American Brand Ranking 2013, (the same value as 2012). The main difference in this years ranking is the inclusion of two brands from the beer industry: guila and Poker.
2012
Communication Providers 29% Financial Institutions 48%

Managing Director, Millward Brown Andean Region

Mr. Gabriel Castellanos

In the last decade, Colombia has been considered one of the most interesting countries for foreign investors. The country has had a sustained growth of 4% on average, and this has seen the strengthening of national companies such as Grupo Nutresa, Ecopetrol, Grupo Aval and Cementos Argos, amongst others. These companies latest investments have turned them into multi-Latin companies with a direct presence in Central and South American countries and the United States.
This is why, according to experts, Colombia is part of the CIVETS group (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) countries that have been identified as the next generation of economic tigers. Both the BRIC and the CIVETS have demonstrated their influence and economic strength in an unfavorable global environment. However, last year the impact of the world crisis also affected their economies, evidenced by negative results in different macroeconomic indicators. Despite the external context, characterized by weak global demand, falling prices of commodities and weaker exchange terms, the Colombian economy had only a moderate deceleration, registering a growth of 2.8% in the first quarter of 2013 compared to the 3.1% observed last year. This fall in growth is mainly explained by fewer exports, a halt in activities of the mining sector (oil and coal) and weaker international commodities prices. In terms of consumption (demand), Colombia demonstrated moderate growth of 3.5% annually, a reflection of lower consumer confidence. Colombians also reduced their debt levels, an indicator that had been increasing in a significant way up until the first half of 2012; households are now allocating a larger portion of their income to paying debts, thus moderating the consumption of goods and services.

Retail 5% Energy 18%

2013

Retail 6%

Communication Providers 2% Financial Institutions 42%

Energy 22%

Beer 28%

colombian Brand Value % Change by Sector


Financial Institutions -12% Beer n/a Energy +21% Retail +10% Communication Providers -93% +29% Beer

overall brand value change 2012-2013


Source: BrandAnalytics

0%

38

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

39

colombia

BrandZ Top 10 Most Valuable Colombian Brands 2013


# Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013

Colombia: Between the local and the global


21%
Energy

1 2 3 4 5 6 7 8 9 10
Source: BrandAnalytics and

4,240

5,137

At the time of writing, thousands of Colombians are protesting on the streets and joining a strike organized by Colombian farmers. Their concerns are that the conditions signed and agreed in the Free Trade Agreement (FTA) with the United States will significantly affect their income and way of working. The belief is that the agreements, which have recently come into force, will flood the market with products at prices that small-scale Colombian farmers cannot compete with. The unrest is just one of the effects of the many FTAs recently signed by Colombia.
Juan Pablo Rocha
CEO, JWT Colombia

3,903

N/A
Beer

3,465 3,009

-13%

Financial Institution

2,487

N/A
Beer

Colombias most valuable brand


Ecopetrols brand value (US$ 5.1 billion), shows no major change when compared to 2012. A Colombian joint venture (mainly led by the government but with participation from investors), the brand was second in the 2012 ranking, taking the place of Comcel, a telecommunications company. Positioning itself as a company of energy for the future, Ecopetrol promises to find and convert energy sources into value for customers and shareholders (the company does not distribute oil, just implements exploration and refinement). Set up in 1951 as the Colombian Oil Company, today it is the biggest company in the country, one of the four main oil companies in Latin America, and in the top 40 across the world. Promoting its principles of responsibility, integrity and respect, the brand looks to act upon these values in line with its strategic vision to be a competitive international company, whilst respecting the environment.

2,842

2,466

-13%
Bakery

2,414 2,094

-13%

Financial Institution

1,168

1,286

10%
Retail

It is only 20 years since the Colombian market underwent its first economic opening, bringing new brands and companies to compete in the local market. However, at that time, high duties and taxes continued to favor the local products. That early experience taught local brands how to compete and how to prepare for the seductive avalanche of highly desirable global brands. Today, the scenario is different: following the signing of the FTAs with the European Community, Asian countries and the United States, the competitive arena has become more aggressive. On the one hand, the taxes will no longer serve as a protective shield, on the other, the competitive conditions have evolved. The first and most important change is that the image of Colombia abroad has improved and today it is perceived as a better destination for investors. It is certainly the most attractive market in the region, given the unpredictable nature of surrounding neighbors like Ecuador and Venezuela. Furthermore, Colombia has 44 million inhabitants (consumers), making it the third most populous country in Latin America, after Brazil and Mexico.

1,251

1,281

2%

Financial Institution

From a branding perspective, the battle between local and global brands has begun. However, today the mere promise of international or global will not be enough to compete in a market that is increasingly demanding and sophisticated. The Colombian consumer is more mature and aware of the value for money proposition of the brands he buys; he is also very active digitally and has a broader view of the world. According to Digilats (a study by JWT about the digital habits of Latin-Americans, made in 2013), 60% of Colombians have Internet access and of that group, 93% surf the web every day. Additionally, Colombia has one of the highest mobile Internet penetration rates in Latin America with an average usage time of over seven hours per week. The Colombian consumer has become more demanding and is already a high tech shopper. To complete the picture, local industry is prepared: the quality of local products and services has improved to global standards and now are second to none. It will be interesting to see how this brand battle develops; the big winner is likely to be the consumer who every day has more power, and more choice.

1,143

992

-13%

Financial Institution

517

479

-7%

Communication Provider

BrandZ Top 50 Most Valuable Latin American Brands 2013

41

The paradox of increased purchasing power and pronounced poverty


Isa Telles BrandAnalytics Associate

Mexico has recently seen a slowdown in growth, impacted by a sharp decline in external demand. Showing a 1.7% CAGR over the past four years (among the lowest in the region) and a 2013 forecast of 3.1%, the country has nonetheless managed to maintain some stability in its growth rate ranging between 3.5% and 3.9% - since its recovery in 2010, This is a result of the increasing domestic demand that continues to stimulate the countrys economic growth, especially in investment, as well as having a strong correlation with the performance of the Mexican economy. The new government faces the challenge of further stimulating this growth; prioritizing structural, fiscal, governmental and energy reforms; and exploring the possibility of spending cuts to make up for the reduction of tax revenues. There are signs that the weak external demand is starting to affect domestic demand as well, where growth is still insufficient to create more jobs (with a slight drop in unemployment rates since 2009), to sustainably increase wages and to improve the

countrys welfare. The rate of foreign investment in the country has been falling since 2008, with 2012 being the lowest rate in 12 years. However, a return to growth in the second half is predicted, propelled by an apparent improvement in the economy of its main trading partner, the United States. Even with positive macroeconomic tendencies and a growing consumer market, a large part of the population continues to live below the poverty line. Having a political history marked with violent confrontations, the government is working to join forces and raise the countrys competitiveness. With its large population, good geographical location and numerous international agreements, the country is seen as an interesting consumer market by several global brands. In this context, Mexican brands have been struggling to make the most of this growing market, with the biggest brands concentrated in the hands of very few companies.

mexico

Capital City Ciudad de Mexico Currency Mexican Peso Area 1.96 million km2 Population (thousands) 117,996 (2012) Population growth rate (annual) 1.1% (2010-2015) Life expectancy 76.58 years (2012) Literacy rate of 15-24 year olds 98.4% (2010) Unemployment rate 6.0% (2011) 5.8% (2012)

mexico key facts

Carlos Dadoorian, BrandAnalytics Consultant

Annual GDP at current prices


Total at current prices (millions) US$1,173,600 (2012) GDP per capita (annual) US$9,946 (2012) Growth rate 3.9% (2012) Countrys share in regional GDP 20.6% (2012) CAGR (last four years) 1.7% Foreign direct investment (millions) US$8,685 (2011) -US$4,730 (2012)

42

BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

43

mexico

Mexico: A country of increasing contrasts


Mr. Fernando Alvarez Kuri
Director of Millward Brown Optimor Mexico

According to data from every single international entity available, Latin America is the most unequal region in the world in terms of income. Mexico, as a key player, proves to be far from an exception to the rule.
The Mexican economy has shown a positive trend on macroeconomic variables, yet most of the countrys population has failed to enjoy the benefits of this growth and stabilization. The number of those living under the poverty line had risen from 52.8 million in 2010 to 53.3 million by the end of 2012, according to data from the countrys National Council of Social Development Policy Evaluation (Coneval). Conevals data, however, shows another interesting trend: despite this growth in poverty, extreme poverty decreased from 2.6% to 2.4% in the same period. The dynamics of these figures illustrate a part of Mexican reality, a country in which a huge part of the population still lives under poverty lines but has increased its overall purchasing power. Mexicos GDP per capita, with a value of $9,741 (current US$ ) and having grown 2.6% per annum from 2008 to 2012 according to the World Bank, places the country as fifty-seventh; not far behind other major Latam economies such as Argentina (51) and Brazil (53). As with other Latin American nations, during the second half of the twentieth century Mexico followed an economic model that aimed to industrialize the country through the substitution of imports. This meant the development of models based upon heavy subsidization, increased taxation, and highly protectionist trade policies, leaving the country dependent upon a handful of industries. In 1982, the system cracked, and Mexican authorities had to look outward for the first time as a way to achieve development. Nowadays, Mexico is open to international trade, even having once held the position as the country with the most Free Trade Agreements in the world. With a privileged geographic location, Mexico has proven to be a true hinge state, holding strong commercial relations with both cultural and geographical continuums to which it belongs: North America (namely under NAFTA) and Latin America (under various FTAs and multilateral agreements such as the ones held under the umbrella of the Latin American Integration Association, ALADI). But Mexico has also gone far beyond its continent; it holds 14 FTAs across the globe encompassing partners such as Japan, the European Union and the European Free Trade Association. With a huge population (surpassed in the region only by Brazil), its geographic location (which has granted access to the US market and has influenced consumption habits), as well as its numerous international agreements (which have eased access to the country), Mexico has become an interesting consumption market for brands from across the globe. Despite this openness, the US remains the countrys biggest trading partner by far, holding more than 50% of its imports and almost 80% of its exports. struck by violence after the previous governments attempts to fight drug cartels, which resulted in more than 50,000 deaths across the country. Pea Nietos campaign platform focused heavily on economic matters and structural challenges in the energy sector, the tax system and labor markets; everything wrapped-up under what he called the new-PRI. The nature of such platforms, as well as the proposed change in the way drug cartels were being confronted, has had an effect on the way Mexico is perceived internationally and has, somehow, renewed a sense of opportunity in the country. Pea Nieto has aimed to unite political forces under what is called the Pacto por Mxico (Pact for Mexico) with varying degrees of success: violence is no longer the central axis of the political discourse, even though it is still an everyday issue, instead the discussion for structural reforms in key sectors have taken the countrys political stage. Pea Nietos government has sketched some changes that could potentially boost the countrys competitiveness, though there is still a long way to go before any real effect of such measures is felt, especially since they depend heavily on political will and fragile alliances that still have yet to be fully forged.

Swinging back to the past, looking up for the future


In 2012, Mexico held general elections, which included the ballot for a new President of the Republic. The elections resulted in the return of the PRI (Revolutionary Institutional Party) who had ruled the country without interruption from 1929 to 2000 putting an end to the right wing PANs (National Action Party) 12-year rule. Incumbent Enrique Pea Nietos government inherited a country filled with challenges: an economy which, because of its interdependence with the American market, was hit following the 2009 World Financial Crisis, as well as a society heavily

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BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

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mexico

A rich brand environment, but concentrated in a very few hands


Mr. Fernando Alvarez Kuri
Director of Millward Brown Optimor Mexico

With the countrys openness to international markets, its geographical location, and the plethora of local options available, Mexican consumers have historically been in touch with a wide array of brands. Furthermore, this pool keeps growing as big international players realize consumers in the country are brand oriented, savvy and willing to spend if the right buttons are pushed.
From beer to bakery, passing through financial institutions and cement, Mexicos BrandZTM Top 15 ranking illustrates the brand richness in the country, showing also another crucial characteristic of the Mexican market, which is that power is concentrated in a very few hands. Tycoon Carlos Slims empire owns at least four brands on the ranking (Telcel, Telmex, Inbursa and Sanborns); Walmarts Mexican branch, the largest Walmart operation of the world after that of the US, owns two brands, including the most valuable retailer in the country (Bodega Aurrer and Superama); and Grupo Modelo, the largest brewer in Mexico, appears in the ranking with two, including the one occupying the spot as the most valuable brand (Corona). Of all the categories included, one of the most dynamic has been retailing. Historically, Mexico has developed a strong retail culture yet it has been dominated by just a handful of local powerhouses such as Bodega Aurrer, Liverpool and Sanborns, and complemented by international retailers (namely Inditex and its whole brand portfolio). But things have changed lately. Chinas entry into the World Trade Organization in 2001 has forced Mexico to lower its tariffs for imports of said country, meaning that international players whose production depends heavily on China and Southeast Asia are now considering Mexico as an attractive market to enter. Some of these players include heavyweights such as Gap, H&M and Forever 21 and their entry is forecasted to have an important impact on the countrys retailing outlook, since local brands have grown isolated, protected by the governments past international trade policies. But apparel is far from being the only category that is suffering the effects of past protectionist practices. Take for instance the Mexican furniture industry which, by the end of the nineties, occupied third place by sales volume in the world after the US and Italy,

and which has been facing a hard scenario when confronting imports from Brazil and China. Competitiveness in the country is still an issue but, more and more, Mexican brands have started searching for ways to overcome an increasingly attractive and thus challenging market, taking advantage of their brand heritage as well as their position as locals.

The times they are a-changin


Mexico may be traditional, but it is also open to the new: the country is one of the regions largest Internet markets and it is set to grow. Mexican consumers spend more time online and doing more activities than they did in the past (internauts in the country spending over four hours a day doing more than three simultaneous activities). Nine out of ten Internet users in the country use social media, thinking of it as the second most relevant media to obtain information from (the first place being search engines); in fact, between internauts, Internet is the most used and trusted media, surpassing public and paid television, radio and print. In this scenario, mobile is key. 70% of the 46,600,000 users in the country navigate through mobile devices. Alongside Mexicos competition laws on telecoms, this has pushed the importance of a few brands in the sector, namely gigantic Telcel, the second most valuable brand in the country. But telecoms are not the only category in Mexico in which competition is an issue. Media is also an industry concentrated on a very few: only two broadcasters, Televisa (third most

valuable brand in Mexico) and TV Azteca, hold most power in the market. Yet, competition laws in the country are set to change. Aiming to increase Mexicos competitiveness, the government is progressively planning to open more and more sectors and industries. In the case of media, the renewal of legislation is set to change the panorama swiftly, opening up possibilities for new competitors foreign satellite and cable operators and maybe even one new broadcaster led by Carlos Slim to try and shape Mexican opinion. With high penetration, TV is still seen as the key media to start marketing activities with, but more and more, brands are changing their approach towards it. The perceived safety offered by this media has led to an important stage of saturation: in 2012, there were 595 ads a month aired in primetime, a huge change compared to 2005s 462. Saturation has impacted ad effectiveness, lowering scores on communication and increasing a sense of glut and passiveness towards the message, according to Millward Browns DynamicTrackingTM Database. In this new context, to boost their marketing communication efforts, brands in the country must take into consideration the consumers new relationship with media, which goes far beyond just saturation. Mixed media consumption, the search for more active participation as well as interesting shifts in preferences will not only be the most basic challenges advertisers will have to face in Mexico; they will have to create new ways of seeing, narrating and generating experiences in an increasingly competitive market.

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BrandZ Top 50 Most Valuable Latin American Brands 2013

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mexico

mexican Brand Value


Roberto de Napoli BrandAnalytics Associate

Mexico holds the first spot for the first time in the BrandZ Top 50 Most Valuable Latin American Brand Ranking 2013. The value of its brands added together is US$ 40.2 billion; this represents a 20% increase compared to 2012.
2012
Financial Institutions 4% Bakery 6% Cement 4% Communication Providers 43%

BrandZ Top 15 Most Valuable Mexican Brands 2013


# Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013

Mexicos most valuable brand


29%
Beer

2013

Financial Institutions 9% Bakery 8% Cement 5% Communication Providers 31%

1 2 3 4

5,114

6,620

There are some moments when only a Corona will do. With a communication strategy aimed at interaction with the younger market, the brand grew in value by 29% to US$ 6.6 billion, ousting Mexicos big wireless service provider, Telcel (which faced a considerable decline from US$ 8.5 billion to US$ 6.58 billion). Created in 1925, Corona beer quickly became the lead brand of the Modelo Group. Through clear communications, the company promotes the brands values of transparency and quality, in addition to the more traditional and fun attributes that appeal to Mexicans. This has led to it becoming the highest-selling brand in Mexico and to being distributed in more than 180 countries.

8,449 6,577

-22%

Communication Provider

2,585

3,281

27%

Communication Provider

2,511

2,992

19%
Retail
# Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013

Retail 22% Beer 21% Beer 22%

Retail 25%

5 6 7 8 9 10

1,995

2,976

49%
Bakery

mexican Brand Value % Change by Sector


-27% Communication Providers +12% Retail +8% Beer +126% Financial Institutions +25% Bakery +14% Cement

2,656 2,768

4%

11 12 13 14 15
Source: BrandAnalytics

1,398

1,578

13%
Retail

Communication Provider

1,567

N/A

1,244

2,301

85%
Beer

Financial Institution

1,834

1,465

-20%
Retail

1,352

2,091

55%

Financial Institution

1,187

N/A
Retail

overall brand value change 2012-2013

+20%

+
Source: BrandAnalytics

1,156 2,066

79%
Retail

514

743

45%
Retail

1,494 2,034

36%
Cement

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BrandZ Top 50 Most Valuable Latin American Brands 2013

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Mexico mexico

Capturing the hearts and minds of the Mexican consumer


Rony Jerusalmi
Managing Director, Goldfarb Consultants

Important global players from all continents are increasingly attracted by Mexicos market potential. Every day new brands are introduced; this gives consumers plenty of choice, but also makes it harder for each brand to establish an emotional bond with their potential consumer.
The cultural and socio-economic variations across the population have resulted in a market with a variety of targeted brands. But this choice, added to the impact of the global economic crisis, has made the Mexican consumer more demanding and more deliberate in their thinking than ever. As a result, brands have to exceed customer expectations in all aspects, from customer service to value for money. One of the most illuminating examples of these changes in the current Mexican Market is seen in the Automotive Industry. There is a great potential for growth in this sector since car ownership penetration is still lower than in other similar markets. Twenty years ago, there were only five brands on offer in the local market (Ford, GM, Chrysler, VW and Nissan), but with the change of manufacturing regulations and several free trade agreements with other nations, today almost all global automotive brands are available, providing consumers with more than 35 brand options and over 300 model alternatives. As a consequence, the Mexican

Automotive Market has become more competitive than ever. Furthermore, the newer players in the market such as Honda (1996), Toyota (2001) and Mazda (2005), have established important practices and standards, such as a customer experience designed to exceed expectations, uniform vehicle prices among dealers, and affordable maintenance costs. The luxury automotive segment has experienced very high growth in recent years, with most global players represented in the Mexican market and dominated locally by German manufacturers such as BMW, Mercedes Benz and Audi. The establishment of these luxury brands has created additional challenges for the non-luxury segments that sometimes find themselves competing for the same consumer at similar price points. Although Mexican automotive consumers may have had an emotional connection to the five brands that won their hearts over the course of the years, from a pragmatic perspective, the offering of these new alternatives has attracted their attention and challenged the long established brands. Other important changes have also affected the industry, such as the transformation of the purchase decision-making process, which is heavily influenced by the digital world. Best practices now include differentiated facilities designed with the customer in mind, specially created sales and service processes that deliver an added value experience, and the deployment of ever-more original marketing and PR efforts. Automotive brands have recognized that it is not enough to merely offer a vehicle; they must also deliver an ongoing customer experience that exceeds all previous expectations. Only by doing so can they compete in the battle to win and retain the hearts and minds of the Mexican consumer.

BrandZ Top 50 Most Valuable Latin American Brands 2013

51

A diverse population offers great potential for development


Isa Telles BrandAnalytics Associate

The outlook for Peru in 2013 points to maintenance of economic growth, with a 5.7% CAGR over the past four years (the highest in the region); forecasts of about the same rate are triggered by increased investments in sectors such as mining and construction and by the growth of private consumption. The country has been growing steadily since 2003, and despite a sudden drop in 2009, managed to regain growth in 2010, with a slight decline since then. The current economic model aims to make the country attractive for investors. The government declared 2013 as the year of investment in rural development, seeking to expand its agricultural frontiers, develop technologies and strengthen productive capacities, adding value to rural production. The signing of a free trade agreement between the European Union, Colombia and Peru in August 2013 was aimed at improving conditions and stability to ensure trade and investments between the European Union and the Andean region.

The growth of the country and its middle class presents some particular issues. These include the efforts of local brands to gain strength against multinationals and to expand their presence internationally; the diversified consumer profiles among the cities; the growth of the provinces; and the importance of public opinion in consumer habits. Brands in both the retail and banking segments have gained strength and relevance. The risks involved in this investment portfolio are related to current social conflicts and delays in exploration licenses, particularly in the mining and energy areas. Despite the fact that unemployment rates have shown stability with just slight drops, not all of the population has benefited from the economic growth. The government has declared its intention to correct errors and to combat corruption and crime in the country, as well as its desire to establish a healthy relationship for business, attracting foreign investment the rate of which has been growing annually since 2003.

peru

Capital City Lima Currency New Sol Area 1.29 million km2 Population (thousands) 29,948 (2012) Population growth rate (annual) 1.1% (2010-2015) Life expectancy 73.98 years (2012) Literacy rate of 15-24 year olds 97.4% (2010) Unemployment rate 7.7% (2011) 7.0% (2012)

Peru peru key facts

Carlos Dadoorian, BrandAnalytics Consultant

Annual GDP at current prices


Total at current prices (millions) US$203,833 (2012) GDP per capita (annual) US$6,806 (2012) Growth rate 6.3% (2012) Countrys share in regional GDP 3.6% (2012) CAGR (last four years) 5.7% Foreign direct investment (millions) US$8,119 (2011) US$9,641 (2012)

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BrandZ Top 50 Most Valuable Latin American Brands 2013

BrandZ Top 50 Most Valuable Latin American Brands 2013

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Peru

A Particular Multiverse (The Expression of the Peruvian Identity)


Mr. Claudio Ortiz
Managing Director of Millward Brown Peru

Nowadays, the huge economic growth that Peru has experienced during the last 15 years is not really the subject of debate. Nor is the re-appearance of a middle class, (which almost disappeared during the last part of the twentieth century), much of a talking point these days. However, here we examine a number of other, more recent developments economic, behavioral and sociological that are currently impacting upon brands in Peru.

Intercity diversity
Besides the three strips, (the Coast, the Andes and the Jungle) huge differences are to be seen in the consumption habits among the various cities of this country (together with a certain homogeneity within each of them). Thus, you could conclude that for many categories, the leading actor in one city could be simply irrelevant in a nearby city. The conducting of continual brand surveys in nearly 20 different cities may be a key to success for companies which do not think of Latin America as a country (with Buenos Aires or Mexico City as its capital) or of Peru as an extension of Lima.

The millennials in Peru


Because the economic resurgence happened when todays youngsters were just babies, the generation gap appears to be even greater. For the first time, Peru faces a transversal generational phenomenon. Young people with a millennial attitude have grown up in a society that, despite still being poor, has grown continuously and this has happened in a context where parents raise their kids trying to forget the past. The effects of this social revolution are just beginning to be seen.

The successful defense of some local companies


There are many examples of local companies that have managed to maintain a strong position in the local market (despite the presence of some global giants), and are also becoming global themselves. This raises the question of why the g iants themselves have not been as successful in this market as in the rest of the countries of this region. The answer is that the Peruvian product breaks through by being supported by local consumers (loyal to the local product) and by globalization; it has its own models, which are now becoming successful abroad.

The speed of changes in behavior and the importance of word of mouth


Even in the past, you would see sudden changes in the market share of some categories where the main driver was a wordof-mouth rumor: Its not good anymore or It seems they changed its flavor are phrases that could generate significant behaviorial changes that were very hard to reverse. This, in a market that is adapting rapidly to digital processes and virtual social networks, is an increasingly important factor.

The new source of economic growth in Peru


Although the local economy is not growing as quickly as in the previous decade, it remains healthy. A couple of years ago, this growth started to be noticeable in the provinces. Now it is the turn of Arequipa, Huancayo, Trujillo and Piura (among others) and it is clear that consumers in these cities are quite different in regard to their behaviors, values and, a lot of the time, their choice of brands. What should brands do to engage with such a diverse consumer? What should they do in this era of evolution, as we face the challenge of the digitalization of brand communications? These perhaps are the key questions marketing will have to answer in order to keep brands growing in this society.

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BrandZ Top 50 Most Valuable Latin American Brands 2013

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Peru

Insurance 5% Soft Drinks 9%

PERUVIAN Brand Value


Roberto de Napoli BrandAnalytics Associate

Beer 44%

Peruvian brands make their debut in the BrandZ Top 50 Most Valuable Latin American Brand Ranking 2013, adding up to US$ 6.4 billion. The financial institution BCP is the most valuable brand in Peru, with US$ 1.6 billion, followed by Cristal, a beer brand, which accounts for US$ 1.4 billion.

Financial Institutions 42%


Source: BrandAnalytics

BrandZ Top 7 Most Valuable Peruvian Brands 2013


# Brand Brand Value (US$ Mil.) 2012 2013 Brand Contribution Index Brand Value Change 2012-2013

The new Peruvian consumers: changing habits in an emerging economy


Fidel A. La Riva Cruz Country Manager, Kantar Worldpanel Per

1 2 3 4 5 6 7
Source: BrandAnalytics and

1,636

NEW

Financial Institution

Beer

1,401

NEW

1,095

NEW

Perus most valuable brand


The first and oldest bank in the country, as well as the largest, it was established in 1889 under the name Banco Italiano, changing its title to the current one in 1942. The organization has grown and diversified its operations and today has branches in Nassau and New York. The expansion resulted in the creation of other subsidiaries, such as Credifondo (mutual funds) and Credileasing (financial leases). It offers a full portfolio of bank services to individuals, small businesses and companies, including credit services, insurance, finance and investment.

Financial Institution

In recent years, the Peruvian economy has experienced a period of prosperity, the like of which its citizens have not enjoyed for at least sixty years. The main factors underpinning this boomtime are: increased value of minerals such as copper, zinc and tin all key commodities exported by Peru; the development of more (and huge) mining projects especially in the interior of the country; and the export of non-traditional agricultural products, mainly to markets such as Europe and America. These developments have seen the Peruvian GDP double in the last 12 years, and extreme poverty reduced by 50%, according to the Peruvian Ministry of Economy and Finance. The improvement in the economic situation has also brought about changes in shopping habits and how the average Peruvian consumes. Households now purchase categories that a few years ago it would have been unthinkable to find in the Peruvians basket, such as fabric softeners, light or diet products, and packaged foods. Year by year, consumption of these goods accounts for an increasing market share; nowadays it is about 20% of the Peruvians household expenditure. (It is worth noting that Peruvian housewives have always bought little and often and principally through traditional channels market stalls and local little shops call bodegas. This is due to the informality that exists in the Peruvian labor market, which means that many families receive their wages daily or weekly, which directly influences buying patterns.

Its not only the consumer goods market that has been boosted in the last 10 years; the market for new cars has risen from around 40,000 sales in 2003 to over 190,000 in 2012, with young and middle-class Peruvians fueling the dynamism of this sector. The construction sector has also performed robustly, growing at an average rate of 12% in the last ten years, with over 100,000 mortgage loans arranged for the purchase of private homes. Peruvians have traveled more during the last decade too; but whereas in the 80s and 90 s most of their travel abroad was to seek work and development opportunities, now they travel for pleasure. As a result, the outbound tourism sector of Peru has grown by about 30 % in the past ten years. However, the population is aware that these boom years have failed to solve some of the structural problems of the Peruvian economy. These include an insufficiency of formal job creation, and the heavy reliance on the mining sector making the economy vulnerable to changes in international prices for minerals. So, there remains a lot to be done, but Peruvians perceive that their economy is still in gestation and anticipate many more years of prosperity, both culturally and economically. They consider Peru to be very much a developing nation, not a third world country.

Beer

899

NEW

Soft Drinks

571

NEW

Beer

528

NEW

Insurance

301

NEW

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BrandZ Top 50 Most Valuable Latin American Brands 2013

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methodology

Brand Valuation
In collaboration with Millward Brown Optimor, BrandAnalytics, Brazils leading brand valuation and strategy consultancy, provided brand analysis and valuation for this BrandZ TM Top 50 Most Valuable Latin American Brands report.
The BrandAnalytics approach to brand valuation is based on a brands economic impactfor example, its ability to generate long-term earnings for shareholders and sustained demand among customers. This approach is consistent with the methodology used by Millward Brown Optimor for its BrandZ TM Top 100 Most Valuable Global Brands and related studies. BrandZ TM is the only valuation that peels away all of the financial and other component factors of brand value and gets to the corehow much brand alone contributes. valuation starts with the BrandZ corporation. In some cases, a corporation only owns one brand. Therefore, all corporate earnings come from the brand. In other cases, a corporation owns many brands. Therefore, we need to apportion the earnings of the corporation across a wide portfolio of brands.
TM

Step 1: Calculating Branded Earnings


To make sure we apply the relevant portion of Corporate Earnings to the brand we first obtain financial information from annual reports and other sources, such as Kantar Worldpanel. Then, by multiplying Corporate Earnings by a metric called the Attribution Rate we arrive at Branded Earnings. Branded Earnings refers to the amount of earnings attributed to a particular brand. If the Attribution Rate of a brand is 50 percent, for example, then half the Corporate Earnings are identified as coming from that brand.

Step 1: Calculating Branded Earnings


To make sure we apply the relevant portion of Corporate Earnings to the brand we first obtain financial information from annual reports and other sources, such as Kantar Worldpanel. Then, by multiplying Corporate Earnings by a metric called the Attribution Rate we arrive at Branded Earnings. Branded Earnings refers to the amount of earnings attributed to a particular brand. If the Attribution Rate of a brand is 50 percent, for example, then half the Corporate Earnings are identified as coming from that brand.

Step 3: Determining Brand Contribution


We now have the value of the branded business. But this value is still not quite the core that we are after. To arrive at Brand Value, we need to peel away a few more layers, such as the rational factors that influence the value of the branded business, for example price, convenience, availability and distribution. Because a brand exists in the mind of the consumer, we have to assess the brands uniqueness and its ability to stand out from the crowd, generate desire and cultivate loyalty. We call this unique role played by brand, Brand Contribution. We have the only brand valuation methodology that obtains this customer viewpoint by conducting worldwide ongoing, in-depth quantitative research, online and face-to-face, building up a global picture of brand on a category-bycategory and a country-by-country basis. Our research now covers over two million consumers and more than 50,000 brands in over 30 countries.

Step 4: Calculating Brand Value


Now we take the Financial Value and multiply it by Brand Contribution, which is expressed as a percentage of Financial Value. The result is Brand Value, a figure thats expressed in dollars.

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credits

Contributors

Rony Jerusalmi Managing Director Goldfarb Consultants Mexico Rony has a degree in Industrial Engineering from Universidad Iberoamericana in Mexico City and Marketing and Consumer Intelligence graduate studies from the University of Miami in Coral Gables, FL. He is the Managing Director of Goldfarb Consultants Mexico, a market research based consultancy that provides strategies and solutions to global companies in Mexico and Latin America, in sectors such as Automotive, Technology and Consumer Products. With more than 18 years of experience in brand research, Rony has helped many Fortune 500 companies to understand the relationship of their brand with its consumers, and to identify effective strategies that can be translated into practical actions. www.goldfarbmexico.com rony.jerusalmi@mx.mbgoldfarb.com

Pablo Oscar Lesulauro CEO Mindshare Argentina Pablo has a degree in Administration at Buenos Aires University and originally joined JWTAs Financial and Administrative Department. In 1992, he created the Research and Media Planning Department, of which he was Director. In 2003, he became Vice President, COO and Managing Partner of Mindshare in Argentina, as well as Regional Director for the Samsung and Gillette accounts. In 2011, Pablo became CEO at Mindshare Argentina. In recent years, he has been Vice President for the Argentine Chamber of Media Agencies (CAAM) and a regular participant on industry judging panels and at global conferences.

Gal Barradas Partner and CEO F.biz Gal Barradas majored in business administration, with a postgraduate degree in Semiotics of Advertising Text from the University of Paris 8. Gal is a partner at F.biz and serves as CEO; she is a member of the Executive Committee of the Brazilian Advertising Congress and also a Board member of WPP Latin America. Gal started her career at DM9 before becoming involved in the first wave of interactive agencies in Brazil, going on to become Director of W/Brasil, AgenciaClick and F/Nazca; she was also Vice President of MPM (ABCs agency). Gal is a member group of business leaders working to develop the agenda of women leaders.

Vinicius da Silva MD Kantar WorldPanel for Chile, Colombia, Ecuador and Venezuela After finishing high school in the USA, Vinicius returned to Brazil to study Business at Superior School of Marketing and Advertising in Sao Paulo. His first job was with Nielsen and he opened their Chile office, before moving to Argentina as Commercial and Marketing Director. Vinicius returned to Brazil to be the Commercial Director, leaving in 2002 to start his own commercial, marketing and advertising consultancy. In 2005, he joined LatinPanel (which became Kantar Worldpanel) as General Manager, in Venezuela. In 2008, he moved to Colombia as Managing Director of Kantar Worldpanel for the North Andean Region (Colombia, Ecuador and Venezuela). In 2013, he added Chile to his remit.

Juan Pablo Rocha President JWT Colombia Juan Pablo holds a BA in Advertising from the Universidad de Bogota, and an MBA from ESMA in Barcelona, Spain. He has been the CEO of JWT Colombia for the past 10 years, with a career of 25 + years working in Colombia, Venezuela, Spain, Mexico and The Dominican Republic. Juan is also involved in the academy at the Sergio Arboleda University in Bogota.

Fidel A. La Riva Cruz Country Manager Kantar Worldpanel Per Fidel is a Peruvian economist with more than 17 years of professional experience in market research, marketing and business consultancy. He studied and lived in Guadalajara, Mxico for five years. He has a Post Graduated degree in Strategic Marketing in Palermo University of Buenos Aires, Argentina. Fidel has worked as a Business Planning & Analytics Director in Mindshare Per and Mindshare Argentina, and has taught in many Universities and Educational institutes in Latin America

www.mindshareworld.com pablo.lesulauro@mindshareworld.com

www.fbiz.com.br gbarradas@fbiz.com.br

www.kantarworldpanel.com vinicius.silva@kantarworldpanel.com

www.jwt.com juanpablo.rocha@jwt.com

www.kantarworldpanel.com fidel.lariva@kantarworldpanel.com

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BrandZ Top 50 Most Valuable Latin American Brands 2013

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credits

Contributors

Eduardo Tomiya Managing Director BrandAnalytics South America Eduardo holds a Production Engineer, MA and PHD (ABD) from Poli/USP. The Founder and Managing Director of BrandAnalytics, he runs projects of brand valuation and brand strategy for companies such as Bradesco, Petrobras, Vale, Santander, Fiat, Serasa Experian, O Boticrio, and Cosan. Earlier in his career, he was Director of Brand Valuation at Interbrand (2000-2006, Iberia and Latin America) and Managing Partner of Corporate Finance at Trevisan (1995-2000). Eduardo also teaches branding on postgraduate courses.

Andr Galiano Director BrandAnalytics South America Andr is a graduate in Social Communication from USP; a post-graduate in Administration from FGV/SP, and specialized in Finances at University of California. A Director at BrandAnalytics, Andr runs projects in Brazil and Latin America for clients including Petrobras, Bradesco, Vale, Fiat, Serasa Experian, Boticrio, UNE, Repsol YPF, Nextel. Prior to joining BrandAnalytics he was Senior Consultant at Interbrand (20022006) and Consultant at TMP Worldwide and Amcham. He also teaches postgraduate branding courses.

Roberto de Napoli Associate BrandAnalytics South America Roberto studied Economics at Mackenzie, and has a post-graduate in Financial Administration from FAAP. He has more than 28 years of professional experience in controlling and planning for companies such as Inbrac, Ibrame, Trevisan Consultants and Interbrand. With BrandAnalytics since the beginning, Roberto is responsible for the brand valuation projects and for the ranking of Brazilian Most Valuable Brands: 2006-2013.

Isa Telles Associate BrandAnalytics South America Isa graduated in Design at Mackenzie, did a post-graduate in Communication Processes at ECA/USP, and specialized in Marketing and Branding at ESPM and School of Visual Arts, NY. She has more than 15 years of experience in projects of brand strategy projects (branding). Earlier in her career she worked in branding companies Cauduro and CollectiveMind (J.W.Thompson), and on projects in partnership with Lippincott, such as Banco Real, Vale and Petrobras. Isa teaches branding courses in Brazil.

Carlos Dadoorian Consultant BrandAnalytics South America Carlos qualifications include Statistics by ENCE and a Masters in Statistics from Unicamp. Prior to joining BrandAnalytics, he was Account Director at Enfoque Pesquisas, working with clients in the financial sector (Amex, Santander, Ita), and as Quality Control and Statistics Director for Latin America at IMS Health. At Cambuhy Citrus, he was an ISO 9002 system auditor.

brandanalytics.com.br eduardo.tomiya@brandanalytics.com.br

www.brandanalytics.com.br andre.galiano@brandanalytics.com.br

www.brandanalytics.com.br roberto.napoli@brandanalytics.com.br

www.brandanalytics.com.br isa.telles@brandanalytics.com.br

www.brandanalytics.com.br carlos.dadoorian@brandanalytics.com.br

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Contributors

Martn Schijvarg Account Director Millward Brown Argentina A Bachelor of Business Administration, and postgraduate in Marketing, University of Buenos Aires, Martn has 10-years experience in market research in Millward Brown. His area of expertise is the analysis of the influence marketing actions can have on brands health. Martin provides analysis for markets such as Argentina, Uruguay, Paraguay, Peru, Chile, Brazil, Bolivia, Colombia and Mexico. Within Millward Brown, he has worked on a variety of sectors and was in charge of the BrandZTM Top 50 Latin America Brands 2012 event.

Aurora Yasuda Knowledge Management Millward Brown Brazil A graduate in Social Sciences from FFCL/ USP, Aurora has been working in market research for more than 40 years and was responsible for starting the Millward Brown business in Brazil. A co-ordinator and teacher of market intelligence post -graduate courses at ESPM until 2011, she also published Marketing Research um guia para a prtica da pesquisa de mercado Editora Cengage, co-authored with Diva Maria Tammaro de Oliveira.

Fernando Alvarez Kuri Director Millward Brown Optimor Fernando has a MSc in Consumer Studies from the University of Guelph, Canada and a BA with Honors in Management from ITAM, Mexico. He has specific expertise in brand and marketing strategy, consumer psychology and brand communications. With more than 20 years of experience in the consumer and service industries, he has been involved with multiple regional and global clients within the Millward Brown family of companies for nine years. He is head lecturer in consumer behavior, brand strategy, market research and communication strategy at different graduate programs within top business schools in Mexico, and is a guest speaker at numerous conferences and forums (IAB, ITESM) on consumer related topics.

Gabriel Castellanos CEO Millward Brown Andean Region Gabriel has more than 17 years of experience of the challenges facing both global and local brands. Throughout his career, he has worked extensively both in qualitative and quantitative research specializing in brand building, trade research and communications strategy. Prior to joining Millward Brown, Gabriel held various positions in areas such as research, brand management, trade management and corporate affairs.

Marcela Prez de Arce Client Service Director Millward Brown Chile Having graduated in sociology from Universidad de Chile, Marcela has worked in social research in gender and education at FLACSO Chile, participating in several projects and publications. Since 1997, she has been dedicated to market research, working in Time Research (now TNS Chile) and Feedback, a consulting agency. She joined Millward Brown Chile in 2001, assuming the direction of the Quantitative Area in 2009.

Claudio Ortiz Caruti Managing Director MillwardBrown Per Claudio studied as a Psychologist at Universidad de Chile and did a Business Management Degree at UAI. He has over 20 years experience in market research, both as a client and consultant, in Chile and Peru. He helped establish the first Millward Brown office in Chile and, after some years working at Nestl Chile, returned to the company. He is now managing the Peruvian office.

www.millwardbrown.com martin.schjvarg@millwardbrown.com

millwardbrown.com aurora.yasuda@millwardbrown.com

www.millwardbrown.com fernando.alvarez@millwardbrown.com

www.millwardbrown.com gabriel.castellanos@millwardbrown.com

www.millwardbrown.com marcela.perezdearce@millwardbrown.com

www.millwardbrown.com claudio.ortiz@millwardbrown.com

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BrandZ Top 50 Most Valuable Latin American Brands 2013

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With Thanks
BrandAnalytics, a leading brand strategy consultancy in Brazil, produced the brand valuations and analysis for this BrandZTM Top 50 Most Valuable Latin American Brands report, in collaboration with Millward Brown Optimor.

BrandAnalytics
BrandAnalytics is a Division of Millward Brown Optimor in South America. BrandAnalytics provides expert analytical and quantitative support for branding programs. It focuses on brand valuation/ scorecards, brand strategy and ROI. By combining thorough analytics with an understanding of financial, marketing and strategic issues of the business, BrandAnalytics produces evidence-based branding recommendations that are linked to shareholder value generation. For further information, please contact: EDUARDO TOMIYA Managing Director www.brandanalytics.com.br

BrandZTM
BrandZTM is the worlds largest brand equity database. Created in 1998 and continually updated, BrandZTM is an invaluable resource, containing data on brands gathered from interviews with over two million consumers in 41 countries and covering more than 200 different categories. Calculations use financial data from sources including Kantar Worldpanel and Bloomberg. David Roth CEO, The Store WPP Tamsin Grant Wordscout Mnica Gojman WPP Fellow, WPP Carolyn Cummings-Osmond MA Coordinator & Senior Lecturer Southampton Solent University

For further information about BrandZTM, please contact: GRAHAM STAPLEHURST Global BrandZTM Director graham.staplehurst@millwardbrown.com Robin Headlee Vice President Millward Brown Optimor robin.headlee@millwardbrown.com

Amanda Harrison The Store WPP

Project Management Production

Kay Blewett Bauernhaus Creative

NINHOL www.ninhol.com

ILLUSTRATIONS

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