Heineken International

Heineken N.V.
Naamloze vennootschap
Traded as
Industry Beverage
Founded July 12, 1864 (1864-07-12)
Founder Gerard Adriaan Heineken
Headquarters Amsterdam, Netherlands
Area served
 Worldwide
Key people
 Jean-François van Boxmeer (Chairman/CEO)[1]
Laurence Debroux (CFO)[1]
Products Heineken brands
Revenue Increase €19.257 billion (2014)[2]
Increase €3.129 billion (2014)[2]
Profit Increase €1.758 billion (2014)[2]
Total assets Increase €34.830 billion (2014)[2]
Total equity Increase €12.409 billion (2014)[2]
Owner Charlene de Carvalho (25%)
Number of employees
 76,136 (2014)[2]
Website www.theheinekencompany.com

Heineken N.V., or shortened to Heineken (Dutch pronunciation: [ˈɦɛinəkə(n)]; stylized as HEINEKEN), is a Dutch brewing company, founded in 1864 by Gerard Adriaan Heineken in Amsterdam. As of 2017, Heineken owns over 165 breweries in more than 70 countries. It produces 250 international, regional, local and specialty beers and ciders and employs approximately 73,000 people.[3]

With an annual beer production of 188.3 million hectoliters in 2015, and global revenues of 20,511 million Euros in 2015,[4] Heineken N.V. is the number one brewer in Europe and one of the largest brewers by volume in the world.[5] Heineken's Dutch breweries are located in Zoeterwoude, 's-Hertogenbosch and Wijlre. The original brewery in Amsterdam, closed in 1988, is preserved as a museum called Heineken Experience.

Since the merger between the two largest brewing empires in the world, Anheuser-Busch InBev and SABMiller, in October 2016, Heineken has been the second largest brewer in the world.[6]

History

Previous logo until 2011
Interior of the former Heineken brewery in Amsterdam, which is now the museum Heineken Experience
Exterior of the former Heineken brewery in Amsterdam on Stadhouderskade and Ferdinand Bolstraat

Gerard Adriaan Heineken

The Heineken company was founded in 1864 when the 22-year-old Gerard Adriaan Heineken bought a brewery known as De Hooiberg (the haystack) in Amsterdam. In 1869 Heineken switched to the use of bottom-fermenting yeast. In 1873 the brewery's name changed to Heineken's Bierbrouwerij Maatschappij (HBM), and opened a second brewery in Rotterdam in 1874. In 1886 Dr. H. Elion, a pupil of the French chemist Louis Pasteur, developed the "Heineken A-yeast" in the Heineken laboratory. This yeast is still the key ingredient of Heineken beer.

Henry Pierre Heineken

The founder's son, Henry Pierre Heineken, managed the company from 1917 to 1940, and continued involvement with the company until 1951. During his tenure, Heineken developed techniques to maintain consistent beer quality during large-scale production.

After World War I, the company focused more and more on export. Three days after Prohibition ended in the United States, the first Heineken shipment landed in New York. From that day on, Heineken has remained one of the most successful imported beer brands in the United States.

Alfred Henry Heineken

Heineken brewery in Zoeterwoude, Netherlands

Henry Pierre's son, Alfred Henry "Freddy" Heineken, started working at the company in 1940, and in 1971 was appointed Chairman of the Executive Board. He was a powerful force behind Heineken's continued global expansion, and while he retired from the Executive Board in 1989, he maintained involvement with the company until his death in 2002.

During this period, Heineken tried to increase its stock price by purchasing competing breweries and closing them down. After World War II, many small breweries were bought or closed. In 1968 Heineken merged with its biggest competitor, Amstel, and in 1975 opened a new brewery in Zoeterwoude. The Amstel brewery was closed in 1980, and its production moved to Zoeterwoude and Den Bosch.

Present

With the part acquisition of Scottish and Newcastle in 2007/2008 Heineken became the third largest brewer based on revenues, behind the Belgian-Brazilian AB InBev and the British-South African SABMiller.

Since the merger between Anheuser-Busch InBev and SABMiller in October 2016, Heineken has been the second largest brewer in the world.[7]

On January 12, 2010, Heineken International successfully bought the brewery division of Mexican giant FEMSA, and also merged with the company, expanding its reach throughout Latin America. The company will sell its products there through FEMSA, which is the largest bottler and brewery in all of Latin America, and maker of such brands as Dos Equis XX, Bohemia and Sol. FEMSA now owns 20% of Heineken N.V. after the early 2010 all-stock deal, becoming its largest single shareholder after the Dutch families (Heineken family and Hoyer family) who owns 25.83% and public shareholders owning 54.17%.[8]

The FEMSA acquisition is expected to keep Heineken in its strong position by growing its market share in the Latin American markets. FEMSA has a massive distribution network and owns Mexico's largest convenience store chain OXXO, which has thousands of locations throughout the country.

In September 2014, it was announced that Heineken would sell its Mexican packaging business Empaque to Crown for around $1.23 billion.[9] Also during that month, Heineken revealed it was in talks to sell its Czech operations to Molson Coors.[10]

On September 10, 2015, Heineken International announced it would acquire a 50% stake in Lagunitas Brewing Company of Petaluma, California as part of an effort to allow Lagunitas to expand its operations globally. As part of the deal Lagunitas will no longer be considered a craft brewer as the Heineken stake is greater than 25%.[11]

In January 2017, Heineken announced it was in negotiations to buy the Kirin Company's 12 breweries in Brazil.[12] The following month, Heineken closed the deal and bought Brasil Kirin for US$700 million.[13]

After previously acquiring 50% of Lagunitas Brewing Company, Heineken announced, on May 4, 2017, it would be purchasing the remaining 50%—making it the sole owner of Lagunitas.[14]

Global structure

Heineken organises the company into five territories which are then divided into regional operations.[15] The regions are: Western Europe, Central and Eastern Europe, The Americas, Africa and the Middle East, and Asia Pacific. These territories contain 115 brewing plants in more than 65 countries,[16] brewing local brands in addition to the Heineken brand.

Executive team

The executive of the company consists of the following people:[17]

Brewing plants

Heineken's brewing plants have been designed and engineered in 4 main parts of the world.[18]

Africa and the Middle East

Heineken has 16 operating companies in Africa and the Middle East.[19] These include:

Asia Pacific

Heineken Brewery in Surabaya, Indonesia

Breweries in Asia Pacific:[19]

Europe

Heineken offices in Madrid, Spain.

Breweries in Europe:[19]

The Americas

Breweries in the Americas:[19]

On January 20, 2017, Heineken NV and Kirin Holdings confirmed they were in negotiations for Heineken to acquire Kirin's beer operations in Brazil. Kirin had earlier bought assets in Brazil in 2011 with the local brewer Schincariol, which makes Nova Schin and Baden Baden.[21]

Beer brands

Heineken International owns a worldwide portfolio of over 170 beer brands, mainly pale lager, though some other beer styles are produced. The two largest brands are Heineken and Amstel; though the portfolio includes Cruzcampo, Affligem, Żywiec, Starobrno, Tiger Beer, Zagorka, and Birra Moretti. Recently Heineken added a cider blend named Jillz to their list of brands. Since mid-2007, Heineken has also taken ownership of former S&N International brands such as Strongbow and Bulmers Ciders and John Smith's and Newcastle Brown Ale.[22] In 2010, Heineken bought Mexican brewery FEMSA Cerveza, including brands Tecate, Sol, Dos Equis, Indio and Kloster.

Ownership

The shares of Heineken International are traded on the NYSE Euronext Amsterdam and OTCQX under the symbols: HEIA and HEINY respectively. As at December 31, 2013, the shareholding in the group's stock was as depicted in the table below:[23]

Heineken International stock ownership
Rank Name of Owner% Ownership
1 Heineken Holding N.V150.005
2 Fomento Económico Mexicano, S.A.B. de C.V2 12.532
3 Others37.463
Total100.00
  1. Heineken Holding N.V is a public company listed on the NYSE Euronext Amsterdam. Its single investment is Heineken International. It is majority owned by L’Arche Green N.V an investment vehicle of the Heineken family and the Hoyer family.
  2. Fomento Económico Mexicano, S.A.B. de C.V (FEMSA) holds an additional 14.935% in Heineken Holding N.V bringing the total direct and indirect shareholding in Heineken International to 20%.

Marketing

Advertising

Heineken's main advertising slogan in the UK was "Refreshes the parts other beers cannot reach",[24] some of which featured voice-over narration by Danish comedian/pianist Victor Borge. The British TV campaign ran for over 30 years – stopping in 2005.[25][26] From March 2011 they have been advertising using the song 'The Golden Age' by The Asteroids Galaxy Tour. After the success of The Entrance, a web advert (4M views in YouTube), Heineken launched The Date in May 2011.[27]

In March 2017 in Amsterdam, Heineken opened a pop-up bakery for five days to promote the yeast used in its brewing. The bread was made by Mark Plaating and proceeds were donated to a local baking guild.[28]

Sponsorships

Rugby ball used in the Heineken Cup

Heineken sponsors several sporting events. The Heineken Cup was an annual rugby union knock-out competition involving leading club, regional and provincial teams from the Six Nations: England, France, Scotland, Wales, Ireland, and Italy. Heineken was the sponsor from the cup's inaugural tournament in 1995-96, until the tournament ceased in 2014 and was replaced by the European Rugby Champions Cup. Heineken continues its sponsorship of European Club Rugby as the principle partner of the European Rugby Champions Cup and has been credited as the Founding Partner of European Rugby.

The Heineken Open (tennis) is a tennis tournament on the ATP International Series played in Auckland, New Zealand.

Heineken has been an integral partner of the UEFA Champions League since 2005, with a theme of "Enjoyed together around the world."[29]

Heineken also sponsors the music events: the Heineken Open'er Festival, a contemporary music festival held in Poland; and, since 2004, the Oxegen music festival in Ireland.

Heineken sponsors the Ballyheigue Summerfest in County Kerry, Ireland.

In 2016, Heineken became the Official Beer of the Formula One World Championship starts from Canadian Grand Prix.[30]

Holland Heineken House

Since 1992 Heineken organises, together with NOC*NSF, the Dutch meeting place at all the Olympic Games, called the Holland Heineken House.

Heineken Experience

Inside the Heineken Experience

The Heineken Experience is a museum about Heineken Pilsener and the Heineken brewery, based in the original brewery in Amsterdam. The building was built in 1867, and was in use as a brewery until 1988.[31] In 1991, when part of the establishment was torn down, the Heineken Reception and Information Centre (Dutch: Heineken ontvangst- en informatiecentrum) was opened in the remaining building. In 2001 the name was changed to Heineken Experience.[32]

The museum features "rides", interactive exhibits, and two bars. It also gives an insight into the company's history and brewing processes through the years. Visitors receive one small tasting glass and two full-sized glasses of Heineken beer to drink at the end of the tour, both paid for by the 16 euro entry fee.

Price fixing convictions

On April 18, 2007 the European commission fined Heineken €219.3m, Grolsch €31.65m and Bavaria €22.85m for operating a price fixing cartel in the Netherlands, totalling €273.7m. InBev, (formerly Interbrew), escaped without a penalty because it provided "decisive information" about the cartel which operated between 1996 and 1999 and others in the EU market. The brewers controlled 95% of the Dutch market, with Heineken claiming a half and the three others 15% each.[33]

Neelie Kroes said she was "very disappointed" that the collusion took place at the very highest (boardroom) level. She added, Heineken, Grolsch, Bavaria and InBev tried to cover their tracks by using code names and abbreviations for secret meetings to carve up the market for beer sold to supermarkets, hotels, restaurants and cafes. The price fixing extended to cheaper own-brand labels and rebates for bars.[33]

In 2004 Heineken and Kronenbourg (then part of Scottish and Newcastle), the two dominant brewers in France, were fined €2.5m - with the penalty reduced for co-operating.[33]

“ This is simply unacceptable: that major beer suppliers colluded to up prices and to carve up markets among themselves[33] ”
— EU Competition Commissioner Neelie Kroes

References

  1. 1 2 "Executive Team". Heineken. Retrieved July 6, 2015.
  2. 1 2 3 4 5 6
  3. ↑ "Press Release". Heineken. January 20, 2017. Retrieved February 5, 2017.
  4. ↑ "Heineken N.V. 2015 Annual Report". Heineken. Heineken. February 17, 2016. Retrieved February 5, 2017.
  5. ↑ "Company Profile". Heineken. Heineken N.V. 2017. Retrieved February 5, 2017. With recent acquisitions in Africa, India, Asia and Latin America, we are continuing to increase our presence within emerging markets, which will contribute to our ongoing growth.
  6. ↑ Blenkinsop, Philip (January 20, 2017). "Heineken in talks over Kirin's struggling Brazil business". Reuters. Thomson Reuters. Retrieved February 5, 2017. Japan's Nikkei business daily reported that Heineken would pay around 100 billion yen ($872 million) for the business.
  7. ↑ Blenkinsop, Philip (January 20, 2017). "Heineken in talks over Kirin's struggling Brazil business". Reuters. Thomson Reuters. Retrieved February 5, 2017.
  8. ↑ "Ownership Structure". Heineken International. March 1, 2014. Archived from the original on April 15, 2014. Retrieved April 12, 2014.
  9. ↑ Heineken to sell Mexican can, bottle maker to Crown. Reuters, September 1, 2014
  10. ↑ Heineken in talks to sell Czech operations to Molson Coors. Reuters, September 9, 2014
  11. ↑ John Kell, "Heineken buys 50% stake in craft brewer Lagunitas", Fortune, September 10, 2015
  12. ↑ Blenkinsop, Philip (January 20, 2017). "Heineken in talks over Kirin's struggling Brazil business". Reuters. Thomson Reuters. Retrieved February 5, 2017. Japan's Nikkei business daily reported that Heineken would pay around 100 billion yen ($872 million) for the business.
  13. ↑ Inagaki, Kana (February 13, 2017). "Kirin ends Brazilian venture with $700m sale to Heineken". Financial Times. The Financial Times Ltd. Retrieved February 24, 2017. Deal makes Dutch group the second-biggest brewer in the world’s third-largest beer market.
  14. ↑ Swindell, Bill (May 4, 2017). "Heineken buys remaining 50 percent interest in Lagunitas Brewing Co.". The Press Democrat. Sonoma Media Investments, LLC. Retrieved May 5, 2017. Heineken is buying Lagunitas in a deal to help propel the craft beer sector globally amid a rapidly changing industry.
  15. ↑ "Countries and Brands". Archived from the original on January 2, 2010.
  16. ↑ "Heineken International Heineken International - Profile". Heinekeninternational.com. Retrieved February 26, 2014.
  17. ↑ "Heineken N.V. 2015 Annual Report". Heineken. Heineken. February 17, 2016. Retrieved February 5, 2017.
  18. ↑ "Heineken International Breweries". Archived from the original on February 8, 2007.
  19. 1 2 3 4 "Our Global and International Brands". Heineken International. Heineken. Retrieved November 23, 2016.
  20. ↑ "BBC.co.uk". BBC News. May 21, 2010. Retrieved February 26, 2014.
  21. ↑ van Tartwijk, Maarten (January 20, 2017), Heineken in Talks to Buy Kirin’s Brazil Assets, New York: The Wall Street Journal, retrieved January 22, 2017
  22. ↑ "Heineken International Brands". heinekeninternational.com. Heineken International. Retrieved April 28, 2007.
  23. ↑ "Heineken Holding N.V. 2013 Annual Report". Heineken Holding N.V. December 31, 2013. Retrieved January 24, 2015.
  24. ↑ Heineken Logo: Design and History. FamousLogos.net. Retrieved June 12, 2011.
  25. ↑ Walsh, Dominic (October 21, 2005). "Heineken calls last orders on television ads after 30 years". The Times. London. Retrieved May 4, 2010.
  26. ↑ Walsh, Dominic (October 21, 2005). "Attempt to reach other parts with stronger beer". The Times. London. Retrieved May 4, 2010.
  27. ↑ "Heineken lance The Date, sa nouvelle campagne virale sur le web". Thebuzzbrowser.fr. Retrieved February 26, 2014.
  28. ↑ "Heineken Opens a Pop-Up Bakery in Amsterdam to Promote Its Yeast - Video - Creativity Online". Retrieved May 4, 2017.
  29. ↑ "Heineken International Heineken announces new UEFA Champions League". Archived from the original on March 21, 2012.
  30. ↑ "Heineken announces global partnership with Formula One Management". Formula1.com. Formula One World Championship Ltd. June 9, 2016. Retrieved June 9, 2016.
  31. ↑ "About Heineken Experience". heinekenexperience.com. Heineken Experience. Retrieved April 28, 2007.
  32. ↑ "Nederlandse Biermusea". michel-tencate.tmfweb.nl. Retrieved April 28, 2007.
  33. 1 2 3 4 Gow, David (April 18, 2007). "Heineken and Grolsch fined for price-fixing". The Guardian. London. Retrieved August 1, 2007.
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