The Journal Gazette

Home Search

Heineken revives sagging US fortunes

– To get Heineken growing in the United States again, Dolf van den Brink first gained control of some of the imported beers Americans were drinking instead of Heineken.

Since becoming the third head of the Dutch brewer’s U.S. business in two years, Van den Brink has found a path to growth with imported Mexican brands including Sol and Tecate to meet changing American demographics and tastes for beer.

“We weren’t in a good position in 2008, 2009,” said Van den Brink, whose predecessor Don Blaustein left in August 2009. “For 45 years, we were a single-brand operation. We were set in our ways.”

After two years of declining volume in its Heineken brand in the U.S., the brewer from Amsterdam bought Mexico’s Fomento Economico Mexicano SAB’s brewing unit early in 2010 for $7.4 billion, adding Dos Equis as well as Sol and Tecate to its Dutch-led portfolio. He’s now focusing on reviving the company’s namesake brew with new bottles, increasing advertising behind the Heineken brand and tripling the sales force to get consumers excited about James Bond’s beer again.

Progress in the U.S. mirrors the rest of the world, where the 148-year-old brewer is increasingly realizing that drinkers want more than its namesake ale. The company bought control of its Asia Pacific Breweries venture this year to maintain control over brews including Tiger beer, which it said it will develop internationally.

“They’ve had a lot of false starts trying to get it right in the U.S.,” said Ian Shackleton, an analyst at Nomura in London. “We wondered if Van den Brink would be going in like Streetfighter with a machine gun to get things done. He does appear to have revitalized growth in the Heineken brand.”

The brand grew 3.2 percent in the past 12 months, according to Nielsen data cited by Van den Brink, outpacing market growth of 1.8 percent. According to Nielsen, Heineken’s U.S. market share is growing faster in volume terms than competitors Anheuser-Busch InBev NV and MillerCoors LLC in the past three months. The brand’s U.S. market share fell to 2.2 percent in 2011 from 2.7 percent in 2007, Euromonitor research shows.

The recent improvement is partly reflected in the company’s shares.

Heineken has risen 42 percent this year in Amsterdam trading, more than the 25 percent gain for SABMiller Plc, co-owner of MillerCoors and its closest rival, and just trailing AB InBev’s 44 percent advance.

“Heineken is, remains, will be the No. 1 choice and priority of the company, and needs to grow – and thank God, it is,” Van den Brink said in an interview in his office in White Plains, N.Y. Still, “you can’t just stand on one leg these days; you need a portfolio.”

The Heineken brand still represents about 42 percent of the Dutch brewer’s volume in the U.S., where the company gets less than 10 percent of profit, according to Nomura estimates.

Van den Brink, who joined in 1998, is used to tough challenges. Before taking the U.S. job, he spent 4 1/2 years helping double Heineken’s market share in the Democratic Republic of the Congo, despite operating amid militant uprisings in the African country.

His latest test hasn’t been much easier as Heineken has fought head on with the likes of AB InBev, created four years ago in a $52 billion merger, and the financial crisis has roiled U.S. beer sales. Other brewers were more agile in selling their beers, from creating new products to new packages, Van den Brink said, leaving the smaller Heineken, which sells about 4 percent of U.S. beer by volume, behind.

To halt the decline in sales of the Heineken brand, the executive has tripled the number of people selling the beer to bars and restaurants, particularly in Heineken’s urban U.S. heartlands such as New York.

He’s also overseen a “significant uptick” in advertising spending, and sought to capitalize on what he sees as “headroom” in the draft beer market compared with the crowded space for bottled beers.

Copyright © 2014,