Taking the mystery out of embedded brand values

BVWireIssue #147-2
December 10, 2014

How do you value a brand that’s intertwined with all of the other assets of the company? This is a phenomenon that’s not well understood. Fortunately, there is research that reveals how brands are valued in an actual acquisition.

New data: In 2013, a consortium of Berkshire Hathaway and 3G Capital acquired H.J. Heinz. The brand value was reported as worth $12.1 billion, which represented 40.5% of enterprise value, according to a new report, “Global Top 20 Brands in 2013,” from Markables. The rankings in the report represent brand values that follow international accounting and financial reporting standards. Plus, they were calculated by independent certified appraisers, audited by CPAs, and now appear on the balance sheets of the acquirers. Some of the other famous brands in the Top 20 list include:

  Brand Value
($ millions) 
% of Enterprise
Sprint $6,455 11.8%
Crown (Corona beer) 2,306 32.6
Sealy 524 40.9
Kayak 496 26.5
Saks Fifth Avenue 374 11.5
Wish-Bone 348 60.4
Skippy 265 39.8

Key ratios: The 2013 Top 20 brands accounted for 34.3% of all assets of these enterprises (including other intangibles, goodwill, plant and equipment, inventory, and receivables). The figure is in line with previous years. The average brand premium of the Top 20 was 8.0% of net revenue in 2013. That is, 8% of revenue represents profit directly attributable to the brand. This figure is lower than in 2012 but higher than it was in 2010 and 2011.

Markables (requires login) has a database of over 5,000 trademark valuations published in financial reporting documents of listed companies from all over the world. The database reports value solely for the use of trademarks (not bundled with other rights). It also contains trademark assets that have longer lives than is typical.

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