What Is a Brand Moat?

By Kristi Waterworth – Updated Jun 18, 2025 at 12:03 AM

Key Points

Brand moats protect businesses by building unique, strong brands that attract loyal customers.
Top brand moats include Nike, Harley-Davidson, and Starbucks, synonymous with specific lifestyles.
Investing in companies with strong brand moats offers longevity and premium pricing benefits.

Building a moat around your business is a lot like building a moat around your castle -- it's a great way to protect your assets and keep intruders at bay. Although there are many different ways to build a moat, a brand moat is one of the strongest.

Loading paragraph...

A family shops in a store. — Image source: Getty Images.

Loading image...

What is a brand moat?

A brand moat is simply an economic moat strategy that's developed around the concept of branding. A moat is something that's unique about a business that can't be reproduced easily. Although most businesses like to think they have unique branding, most really don't.

So, when you build a brand moat, you're building a strong brand with a clear identity that isn't going to appeal to just anyone. It appeals to who it appeals to, and it sells the fantasy of a specific lifestyle or other benefit, often with the side effect of creating hardcore devotees for life.

Loading paragraph...

Loading pitch...

Loading paragraph...

Best Retail Stocks to Buy Now

We all go shopping. These companies provide the goods we buy across industries.

Investing in Automotive Stocks

Get to know the most promising stocks in the automotive market, including electric car companies.

5 Wide-Moat Stocks for 2025

Discover the best wide-moat stocks and see what makes them quality investments.

Loading hub_pages...

Loading paragraph...

Shareholder

An individual or entity that owns a portion of a company's stock, entitling them to a share of its profits and assets.

Loading definition...

For investors, identifying strong brand moats is one way of choosing companies that will stand the test of time, since generations of customers have come to know and love what the companies have to offer, and they believe they can rely on them into the future. This often creates a situation where customers are paying premiums simply for the branding, and that also helps shareholders.

Choosing stocks from companies that you know and that you use in daily life is one way of tapping into the power of a brand moat. Compare these to the nearest competitor and see just how far apart they truly are. That's not to say that a competitor without a brand moat can't make money or that they can't be a profitable investment. But, there is something more durable about companies with brand moats that have stood the test of time.

Loading paragraph...

Loading pitch...

About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

TMFMaldivesBlue

@MaldivesBlues

Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy.