Heineken International

Kody Harper Channing Renner Trevor Willis

History

• • • • Established in 1864 – Gerard Adriaan Heineken – Amsterdam In the late 1800’s, became Europe’s top beer producer Publically traded in 1939 – HINKF Revenue in 2008 of €14,701 million Euros

Current & Future Profile

• Current Profile – Substantial revenues in 2009 – New online program for 12 students • Future Profile – Economic downturn – Vague progress in certain countries

SWOT Analysis

• Strengths – Large Work Network • Over 70 countries and 125 breweries – Alliance with UEFA • Union of European Football Associations – – Over 140 million viewers worldwide per game Brand Awareness – Strong and rounded brand portfolio • Over 200 beers within Heineken’s portfolio • Top brands: Heikenken and Amstel

SWOT Analysis

• Weaknesses – Profit Margins • Decreased profit margins • Increased start up costs – Increased debt • • 2007-08 $11 billion increased debt Debt acquiring acquisitions

SWOT Analysis

• Opportunities – Failing and smaller breweries • Start up costs • Brewery and Maltery – Global Beer industry • • Beer is good!!

1.7% increase in market from 2008 to projected 2013

SWOT Analysis

• Threats – Europeans…Drink more beer!!!

• Slow growth rate, not coming close to estimates • Leading market for Heineken • Girly drinks – Financial status • Law violations hindering finances

Global Market Expansion

• • • 2 nd – 4 th in the world beer market Largest brewer in Europe – 125 breweries worldwide – 70 countries 5 geographical regions: – Central and Eastern Europe – Western Europe – Asia Pacific – The Americas – Africa and the Middle East Heineken International Website

Global Market Expansion

• Central and Eastern Europe – Terrific market share in Austria, Bulgaria, Greece, and Slovakia – Sold 53,300 liters worldwide in 2008 • Western Europe – Majority of profit – Large market share throughout multiple countries – New brewery in Spain

Heineken's Geographical Revenue, 2008

Asia Pacific 2% The Americas 11% Africa and Middle East 11% Central and Eastern Europe 25% Western Europe 51%

Global Market Expansion

• Asia Pacific – Main breweries in Malaysia, Thailand, Vietnam, China, Singapore, Mongolia – 26.4 million gallons in Ho Chi Minh City in one year – Chinese Expansion • 3 rd brewery in China

Global Market Expansion

• The Americas – Specialization in exports • Light beer only in America – Multiple breweries • Latin America, Caribbean – FEMSA Agreement

Global Market Expansion

• Africa and Middle East – Fastest growing segment • 35.3 percent from 2007-08 – Egypt brewery purchase

Competition

• Anheuser-Busch InBev • SABMiller • Carlsberg Group • The Boston Beer Company

Competition

• Anheuser-Busch InBev – Largest competitor to Heineken International – Anheuser Co. dates back to 1366 – 1987 Inbev was formed – In 2008, companies merged to form Anheuser Bush Inbev – Key Products • Beer & Soft drinks

Competition

• SABMiller – Second largest brewery – SAB originated in late 1900’s – In 2002 company merged with Miller – Key products are Beer and Soft drinks – Six of top 50 Beers

Competition

• Carlsberg Group – Fourth Largest Brewing company – Founded in 1868 in Malawi – Weak presence in US – Producing mineral water with Coca Cola

Competition

• The Boston Beer Company – US based independently owned company – Created in 1984 by Jim Koch – Won more awards than any international brewing company – Many large companies have wanted to buy, but will not sell

25 20 $23,6 Company Revenues (In Millions), 2008 $21,0 $18,7 15 $11,8 10 $4,8 5 0 Anheuser-Busch Inbev Heineken International The Boston Beer Company Carlsberg Group SABMiller

Global Beer Market Share, 2008

Anheuser-Busch InBev 26% Other 55% SABMiller 12% Heineken 7%

Industry Analysis

• Global beer market – Grew by 2% in 2008 – Slow growth – Standard lager maintains high market share

Global Beer Market Segmentation, 2008

Specialty beer 10% Ales, Stouts & Bitters 4% Low/No Alcohol 2% Premium Lager 29% Standard Lager 55%

Industry Analysis

• Segmentation by geographical region – Europe – 50% – Americas – 29% – Asia-Pacific – 21%

Recommendations

• Short-term – New marketing strategy • Sales increase, finances increase • New forms of marketing – Reduce acquisitions with debt • Acquiring negative assets • Stick to what they have – Diversity • Increased product line= larger market share • More appealing brand

Recommendations

• Long-Term – Increased shelf space • The more customers see the more they will buy – Portfolio increase: Financing smaller companies • • Boston Brewing Company Great brands with small finances – Ethical and Law standards • Public image • Health awareness

Conclusion

• Top 5 beer company in the world • Largest brewer in Europe • Strong brand portfolio • Substantial revenues in 2009