09 Heineken N.V.
Annual Report 2016 Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Our business priorities
Creating value and
sustainable growth
The HEINEKEN strategy is built around six business
priorities designed to enable the company to win
in the marketplace, drive productivity and achieve
sustainable growth.
Win in premium
led by Heineken®
Brewing a Shape the
Better World cider category
Our six
business
priorities
Lead by cool
Drive end2end
marketing
productivity
and innovation
Be commercially
assertive
10 Heineken N.V.
Annual Report 2016 Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Our business priorities (continued)
Win in premium
led by Heineken®
We are inspired by consumers to make the best,
highest quality beers. 2016 was another exciting
year for Heineken® and our International Brands.
With a presence in more than 190 markets, We continued to leverage our global Amstel is now available in more than
Heineken® is the world’s most global beer partnerships, adding Formula 1® to our 100 markets and Tiger is being sold in close
brand. In 2016, Heineken® saw positive existing UEFA Champions League and to 60 markets. In the US, Tecate transformed
momentum in all regions and delivered 3.7% Rugby World Cup relationships. from a regional brand confined mainly to
organic growth. We launched the ‘wild lagers’ the Sunbelt into a national brand, thanks to
Heineken® is complemented by our
H41 and H71 in selected markets in Europe. the introduction of Tecate Light, which grew
International Brands portfolio with premium
Heineken® Light was launched in Ireland and close to 30%.
beers that have a high potential to travel
New Zealand, and was introduced in Australia
across regions and geographies. Amstel,
as Heineken® 3.
Desperados, Sol, Affligem, Tiger, Tecate,
Krusovice and Red Stripe expanded to
new markets and reached new milestones
during the year.
Our Formula 1® partnership is about more than
a race. It represents a unique opportunity to engage
with consumers in growth markets around the world
and also to deliver a responsible drinking message.
The latest UEFA Champions League commercial,
Prep Talk, features José Mourinho and is part of
Heineken®’s Champion the Match campaign.
The ‘There is More Behind The Star’ campaign
with actor Benicio del Toro was launched in
over 70 markets, focusing on the heritage Holland Heineken House in Rio continued an
and quality of the Heineken® brand. Olympic tradition since 1992 and hosted more
than 50,000 fans during the games.
Moderate Drinkers Wanted is our
responsible consumption campaign to make
drinking in moderation aspirational.
11 Heineken N.V.
Annual Report 2016 Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Our business priorities (continued)
Shape the
cider category
As the market leader in cider, we continue our journey
to build a truly global category through a portfolio
of great brands.
Until recently, cider has been relatively unknown Around the world, more consumers are In the UK, the home base of cider, we gained
in many markets and its potential largely discovering the appeal of cider. Outside the market share driven by the continued success of
untapped. We are determined to change UK, cider delivered double digit volume growth. Strongbow Dark Fruit, Strongbow Cloudy Apple
that. In 2016, we unlocked technical and cost Performance was particularly strong in Ireland, and Old Mout.
barriers to growth. Our portfolio expanded to South Africa, Romania, Czech Republic, Russia
New flavours and crafty brands are expanding
new markets, led by Strongbow Apple Ciders, and Mexico. In Asia Pacific, Strongbow Apple
the cider market and differentiating cider from
our flagship brand, as well as Blind Pig, Stassen, Ciders has now been rolled out in five markets
other alcoholic beverages. Our world-class
Bulmers, Old Mout and our newest brand and has shown encouraging early signs.
Stassen innovation centre in Aubel, Belgium
Orchard Thieves, which was launched in five
continues to focus on developing new tastes
new markets.
to excite the consumer.
Strongbow Apple Ciders is our largest cider brand.
With our strong and diverse portfolio
we continue to shape the category globally.
Sustainable sourcing of apples
Approximately one-third of all British apples are
used to make our ciders in the UK and about
70% are sourced sustainably.
Nature-inspired flavours
We continue to grow and innovate with Strongbow
Apple Ciders by adding new taste varieties, such as
Dark Fruit, Cherry Blossom and Cloudy Apple.
Orchard Thieves has been localised
with flair in five markets.
12 Heineken N.V.
Annual Report 2016 Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Our business priorities (continued)
Lead by cool marketing
and innovation
We invest in world-class marketing campaigns and sponsor
global sports events as well as music festivals around
the world. Staying open to new ideas and unleashing
the power of innovation is part of our culture.
Great marketing and innovation throughout Furthermore, innovation is essential for long- We also launched Radler outside Europe
our portfolio of global, international, local term value creation, and sustainability plays in Mongolia, Egypt and Chile.
and speciality brands are essential for growth. an important role in how we innovate.
In 2016, we expanded our sponsorship
Innovation is a priority throughout our In addition to the innovation across the portfolio with Formula 1®. Our Responsible
portfolio. In 2016, innovation generated Heineken® and cider portfolios, we continue Marketing Code governs and guides all our
EUR 2.2 billion in revenues, reflecting an to innovate with our low- and no-alcohol marketing activities worldwide and has also
innovation rate of 10.6% (compared to product range. We launched Amstel 0.0% inspired our latest ‘When You Drive, Never
9.2% in 2015). and Cruzcampo 0.0% in Spain, Żywiec alcohol Drink’ commercial, which features F1® legend
free in Poland and Bintang 0.0% Maxx Sir Jackie Stewart.
in Indonesia.
Bass Drop
Desperados created the first-ever zero gravity festival
at 30,000ft above the Nevada desert to achieve
a bass experience never felt before.
Heineken® is the most-liked beer brand
on Facebook.
More and more consumers are discovering
the appeal of our low- and no-alcohol brands.
H41 Wild Lager
Brewed with wild ‘mother’ yeast discovered
in remote Patagonia.
13 Heineken N.V.
Annual Report 2016 Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Our business priorities (continued)
Be commercially
assertive
Excellent Outlet Execution ensures that our brands are
available at the right price and are of the highest quality,
so we win at every point of sale.
Our global sales force aims to maximise sales SEM increases our effectiveness through Our Global Sales Academy develops and
through Excellent Outlet Execution (EOE). KPI measurement and allows sales people deploys sales programmes to front-line sales
to spend more time in the market, selling. people, sales managers and key account
EOE drives the Picture of Success for every
managers. It ensures our global sales
outlet we visit. Through our Sales Execution With our common Revenue Management
community is equipped with the skills and
Mobile (SEM) tool, our sales representatives capability, we maximise revenue and
capabilities to achieve the Picture of Success.
can see how an outlet is performing and profitability of our volume sold through
capture the order intent of each one. disciplined analytics and execution.
Global Sales Academy
9,000+ people trained across 45 countries.
CO2 emissions per fridge were 46% less than in 2010,
putting us on track to reach our 2020 commitment.
Transformation through technology
Sales Execution Mobile is used by Excellent Outlet Execution
1,837 sales reps during 2,500,000 Aligning 23,000+ sales people across 70+ markets through
visits to 800,000 unique outlets. a common language, consistent assessment and clear KPIs.
14 Heineken N.V.
Annual Report 2016 Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Our business priorities (continued)
Drive end2end
productivity
We aim to leave no stone unturned when looking to deliver efficiencies
across our operations: from sourcing and services, to the production,
sales and distribution of our beers and ciders.
We continued to invest in key developing We continued to optimise our costs, leverage Throughout the company we have also
markets. We added capacity in Ethiopia our size and achieve efficiencies through embarked on standardisation projects to
and Cambodia. We also opened a new HEINEKEN Financial Shared Services and gain speed in process, operations, leveraging
brewery in Shanghai, acquired a brewery Global Procurement. For example, 24 of our technology and scale.
in Vietnam, and our brewery in Ivory Coast European operating companies are now
Taken together, these efforts to improve
is on schedule to officially open in Q1 2017. supported by our Financial Shared Services
our productivity increase our margins and
At the same time, we managed to improve centre in Kraków, Poland.
fuel future growth. They are also beneficial
productivity despite the increased complexity
In procurement, we launched our new to the environment. We are using 37% less
of producing more brands and the rising
ambition to leverage our global scale with energy and 28% less water per hectolitre
customisation demands from retailers.
fewer, more strategic suppliers in order than we did in 2008. This is a testament
to equip our operating companies with to our efforts to meet our Brewing a Better
a best‑in‑class supplier base. World goals.
Increasing use of renewable energy
We are making good progress with renewable
energy, including wind, solar and biomass,
to power breweries around the world.
Global Supply Chain
60% of our beverage production sites reduced
energy consumption and 63% reduced
water consumption.
HEINEKEN Financial Shared Services centre
Supporting 24 operating companies in 26 countries, HFSS processed
EUR 10.1 billion in revenues and reduced costs per transaction by 5%.
15 Heineken N.V.
Annual Report 2016 Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Our business priorities (continued)
Brewing a Better World
We believe business growth and sustainability go hand
in hand. This is why sustainability is embedded in our
business strategy.
Our brands combine passion for quality with We are making good progress towards our Brewing a Better World focuses on six areas:
respect for people and the planet. We believe 2020 commitments and we value continued Protecting water resources
sustainable innovation is our generation’s conversations with stakeholders.
biggest challenge and opportunity. Reducing CO2 emissions
For more on our Brewing a Better World
Brewing a Better World directly supports commitments status, please turn to Sourcing sustainably
the UN Sustainable Development Goals the Sustainability Review on page Advocating responsible consumption
and inspires our brands to step up and 135. More in-depth information can
take action. be found in the sustainability section Promoting health and safety
of our Company website. Growing with communities
Further information on our
sustainability performance:
Pages 135–145
Advocating responsible consumption Electric fleet
Formula 1® provides a global platform to promote We rolled out new electric-powered trucks
our ‘When You Drive, Never Drink’ message. for beer delivery in Amsterdam.
Water risk assessment
resulted in 13 breweries coming into our
global water stewardship programme.
Growing with communities
Since 2009, we have invested EUR 4.3 million in
cash and EUR 15.8 million in equipment and people
Promoting health & safety through our Public-Private Partnership projects to
Accident frequency continued to fall develop local sourcing in Burundi, DRC, Ethiopia,
for the third year in a row. Nigeria, Rwanda, Sierra Leone and South Africa.
