Brand might be the first thing you notice about a particular company, but the last thing you consider before you invest in it. But brand equity is extremely important to the long-term health of a company, and investors should treat it as such. With that in mind, today we delve into the wonderful world of beer brands, looking for strengths and weaknesses in industry players like Anheuser-Busch InBev (NYSE:BUD), MolsonCoors Brewing (NYSE:TAP), Boston Beer (NYSE:SAM), Diageo (NYSE:DEO), and Constellation Brands (NYSE:STZ).


Line 'em up
We begin by considering data from the 2014 Harris Poll EquiTrend rankings. This is a consumer-based poll that measures brand equity, connection, and buzz. Harris polls 40,000 Americans on aspects such as familiarity, quality, purchase consideration, and a brand's ability to generate conversation online, offline, and across the various social media platforms. The poll's beer brand rankings are as follows:





Blue Moon



Negro Modelo

Grupo Modelo


Stella Artois

Anheuser-Busch InBev


Modelo Especial

Grupo Modelo


Bass Ale

Anheuser-Busch InBev


Newcastle Brown Ale



Sam Adams

Boston Beer


Sierra Nevada Pale Ale

Sierra Nevada





Dos Equis Lager


Source: 2014 Harris Poll EquiTrend Rankings.

The list is as interesting for what's on it as for what is noticeably absent, namely the flagship brews from AB InBev, Heineken, and the MolsonCoors/SABMiller joint venture MillerCoors. Not only are big names like Budweiser and Miller Lite missing, but a pseudo-craft beer has landed in first place!

Blue Moon is not considered a craft beer by industry terms, but relative to the other beers MillerCoors produces, it is about as close as it gets. Blue Moon joins Sam Adams and Sierra Nevada Pale Ale as the only craft selections on the list, but the fact that they made it at all demonstrates just how serious an impact craft beer is making on the market at large.

The other interesting dynamic at play here is with Grupo Modelo. Though Anheuser-Busch owns the beverage group, Constellation Brands owns the rights to the U.S. portion of the business, which means it is reaping the benefits of its two flagship beers placing within the top five here.

Finally, seven of these beers are considered imports. The brand strength that foreign beers generate is something to keep in mind when debating whether to buy a company like Boston Beer that is largely a domestic presence, or a company like Anheuser-Busch InBev that is a global player.

The power of brand
But how much should investors consider brand in the first place? An in-depth study published in 2012 by researchers at Georgetown University searched for a correlation between the perceived value of brand equity and superior stock market performance. The researchers tested their hypothesis using data from the financial crisis and determined three very important things. First, brand equity matters. Second, when it comes to financial performance, volatility, and beta, stocks with higher brand equity perform better than their peers. And finally, consumer-based brand polls -- EquiTrend specifically -- are a better indicator of brand equity than financially derived brand rankings like Interbrand's polls. In other words, the list above is fun, but there is also actually real value in it.

The bottom line here is that while there is no reason to predicate an entire investment thesis on the strength of a company's brand, it should come under consideration at some point. Keep this in mind when you're researching the beer stocks above.

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Aimee Duffy has no position in any stocks mentioned. The Motley Fool recommends Boston Beer, Diageo, and Molson Coors Brewing Company. The Motley Fool owns shares of Boston Beer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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