NEW ORLEANS -- In 2014, SABMiller made not one but two unsolicited bids to purchase Heineken NV. The offers were declined but established enough rumors and speculation to make Heineken International CEO Jean-François van Boxmeer open the Heineken USA National Distributors Conference with a very clear statement: "The Heineken family believes in the independence and strength of this company," he said, "and I would add that the management is in agreement with the family."
With brief references to the brewer's 150-year history throughout the conference, Boxmeer added, "We look forward to beginning the next 150 years."
From there, nearly a dozen Heineken executives and brand managers took the stage Feb. 26 at the ornate Saenger Theatre in New Orleans to outline the company's strategy for the next year and for Heineken's key brands. The brewer also promised a new focus on the convenience-store channel.
Following a year when the Heineken beer brand "finally turned the corner" with healthy sales growth in the second half of 2014, Heineken USA CEO Dolf van den Brink presented the company's strategy for continued growth by focusing on: four brands, three customers, two channels and the one-of-a-kind on-premise channel.
4 Brands
Heineken USA owns seven major brands in the United States. The bulk of its attention, however, is on its four largest brands: Heineken, Dos Equis, Tecate and Strongbow Apple Ciders, all of which will get healthy increases to their marketing budgets this year in the United States.
- As the “official beer of Major League Soccer” and sponsor of the UEFA Champions League, Heineken Lager is doubling down on soccer and using the growing sport as a platform to drive sales. The brand will continue its "city" marketing plans in an effort to further establish the beer as one for celebrations and urban settings. "Sixty percent of our business is in the top 12 cities in the U.S.," said vice president Ralph Rijks.
- Andrew Katz, new vice president of marketing for Dos Equis, said that beer brand saw 14% growth in 2014. He hopes to continue that by growing placement in on-premise accounts and improving in-store displays. He also plans to bring the recently introduced Dos Equis Dos-A-Rita to 12 new states in 2015. "We want to make Dos Equis a true national brand," he said.
- The bulk of the plans for the Tecate brand involve growing awareness of Tecate Light, including a "Born Bold" campaign that will introduce the Tecate Black Eagle as the ultimate detector of a good party. "I'd like to grow the Tecate franchise by 10%," said marketing manager Max Skowron. "We need to stop the decline in Tecate Red and increase Tecate Light by 55%."
- That leaves Strongbow as the brand most ready to explode, said Charles Van Es, senior brand director. The cider brand will be supported by a new campaign and introduce two new flavors as part of a variety pack to encourage sampling.
- Heineken's smaller, regional brands—Amstel Light, Newcastle and Desperados—also will see increased spending. Significantly, Newcastle will introduce a variety pack for spring with two new flavors: Newcastle British Pale Ale and Newcastle Summer Session IPA.
3 Customers
As Heineken endeavors to grow its share of the beer market, it is focused on three major retailers.
- Walmart has partnered with Heineken in its 5-year effort to double its beer sales, and so far the results are positive, according to Ray Faust, Heineken USA's chief sales officer. A large part of that strategy includes getting more product on the store floor.
- Kroger and 7-Eleven, the largest chains in grocery and convenience stores, respectively, are the other two customers getting attention through extended partnerships.
2 Channels
As part of its work with Kroger and 7-Eleven, Heineken is working on best practices for the rest of the grocery and c-store channels, as well. "We've been winning in the grocery channel," Faust said. "C-stores are the biggest opportunity to the Heineken USA network. We are behind on our fair share of the market." He hopes to change that with targeted distribution, packaging assortment—such as slim cans--and "fewer, bigger, better" promotions.
1 On-Premise
Underscoring the growth of Mexican imports and BrewLock, Heineken’s draught innovation, will be major plays in restaurants and bars.
"We are not changing our strategy. We know it works," said Dirk De Vos, senior vice president commercial. "We will have more channel focus, however, on convenience, grocery, Walmart and on-premise."
Noting healthy volume goals for all its brands, van den Brink concluded, "We want to become the leader in upscale beer."
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