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Whats Brewing Seminar

HEINEKEN Americas
HEINEKEN strategy to win in Americas

0New York 19 November 2015


Marc Busain

2015 Region President Heineken Americas

Managing Director Cuauhtmoc Moctezuma


2011
Heineken Mexico

2003
Managing Director Positions in Burundi, Egypt and France

2001 Finance Manager, Heineken Netherlands Supply

Started with HEINEKEN, Finance Manager


1996
Democratic Republic of Congo

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Agenda
HEINEKEN strategy to win in Americas

1 Revisiting the positive Americas region characteristics


2 HEINEKEN profile in Americas and contribution to HEINEKEN group
3 Regional strategic priorities
4 Key markets Update:
Mexico
US
Brazil
Canada, Caribbean and Export
5 Summary
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1. Diverse markets with untapped growth potential
With Beer Per capita consumption varied and low relative to more developed regions

Per Capita Beer Consumption (2014)


75

Western Europe
60

45

30

15

HEINEKEN countries

3 Source: Canadean 2014. Non HEINEKEN countries


1. Favourable population dynamics
Region benefits from a younger average population base

% population under the age of 35 (2015 forecast)


73% 71% 70%
67%
63% 62% 62% 62% 62%
60% 59% 59%
56% 56% 56% 56% 54%
51%
48%
46% Europe average
43% 41%

Population growth
2015F-2020F 12 6 10 7 7 5 6 3 7 8 4 1 6 4 4 4 6 4 -5 4 5
in percentages

HEINEKEN countries

4 Source: UN World Population Prospects, Canadean. Non HEINEKEN countries


1. Compelling Premium beer opportunity
With Premium beer share of market still relatively low in a number of countries

% PS of total beer market 2014


35%
34%
Europe average 31%

23%

16% 16% LATAM average 15%


15%

11% 10%
9% 8% 8% 7%
5% 5%
2%

Panama USA Chile Canada Peru Ecuador Costa Rica Argentina Brazil Guatemala Honduras Venezuela Mexico El Salvador Nicaragua

Total beer
market size 3 231 7 20 14 7 2 18 143 2 2 22 69 1 1
2014 (MHL)

Source: Canadean 2014. HEINEKEN countries


Premium beer segment defined by Canadean
5 as >= 115 price index. Non HEINEKEN countries
1. Resulting in favourable regional volume expectations

Key Markets Beer consumption (mhl)


Favourable demographics with positive
CAGR CAGR
population growth and age profile Argentina & Chile
600 +1.8%

Positive beer market fundamentals with low


+0.3% Brazil
+1.7%
beer per capita consumption and Premium +2.7%

segment share of market relatively low 400 +2.6%


Andean*

+1.7% Other LATAM


+3.1%
Significant income growth in key developing +2.8%
Mexico
+1.7% +2.4%
markets -2.4% -1.3%
Canada

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Premium expansion in mature markets where
HEINEKEN Americas is well positioned to +0.2% +1.4% USA

capture growth
0
2010 2014 2020F

Source: Canadean.
6 *Andean includes Venezuela, Peru, Colombia, Equador.
2. Americas is an important contributor
to HEINEKENs business
Group beer volume Heineken Consolidated EBIT

28.7% 8.9mhl 24.9%

29.5mhl

7 Source: HEINEKEN Annual Report 2014.


2. HEINEKEN Americas Footprint
A collection of highly diverse markets and business models

# HEINEKEN Premium market share


Canada Puerto Rico Haiti
#2 #1 #1
United States
#2

French West Indies Jamaica

Mexico Central America & Caribbean #1 #1

#2 #1
Costa Rica
Suriname St. lucia
#1
Brazil #1 #1
#2
Panama
#2
Bahamas
9 Operating Companies Chile Argentina
#1
6 Joint Ventures/ Associates #1 #2
40+ Export Markets

Source: Nielsen and Canadean


8 Premium beer segment defined by Canadean as >= 115 price index.
2. Americas regional brand overview
A premium led brand portfolio complemented by strong mainstream brands

Mexico USA Brazil Canada Chile Argentina Panama Haiti Bahamas St Lucia Jamaica
Heineken
Heineken Amstel Light
INTERNATIONAL Heineken Heineken Heineken Heineken
Strongbow Strongbow Heineken Heineken
Sol Strongbow Amstel Heineken Heineken Heineken Strongbow
AND DOMESTIC Bohemia Lagunitas2 Sol Guinness1
Desperados Dos Equis Imperial2 Guinness1 Guinness1 Guinness1 Desperados
PREMIUM Affligem Dos Equis Royal Guard
Xingu Newcastle Budweiser2 Guinness1
Red Stripe
Newcastle
Coors1
UPPER MAINSTREAM & Dos Equis
Cristal2 Panama Red Stripe
Sol Tecate Schneider2 Prestige Kalik Piton
MAINSTREAM Escudo2 Soberana Dragon
Indio
Tecate
Superior
Kaiser Palermo2 Malta
(LOWER) MAINSTREAM Carta Blanca Eclipse
Bavaria Bieckert2 Talawah
Kloster

1Represents Licensed brands.


2 Represent
Partner brands.
9 Heineken may include Heineken Light.

2. Expanding our Footprint in the Craft Segment
and the Caribbean

Acquired 50% shareholding in Lagunitas

5th largest craft brewer in the US by volume

Lagunitas IPA is largest IPA Brand by volume


in the US* and c.56% volume Acquired Diageos 57% stake in D&G taking ownership to 73%
MTO launched 6 November for remaining shares
IPA segment, fastest growing category in craft
D&G leading share in Jamaican beer market
Will continue to be run by current management
Red Stripe c.40% volume of D&G brand portfolio and the #1
Current volume predominantly in the US brand in Jamaica
Exciting opportunity to expand through Red Stripe c.50% in Jamaica, with large international markets
HEINEKENs global platform including UK, Canada and US
Further international potential given heritage and distinctive
attributes
Strategic asset within key growth market
10 * Source: Nielsen
2. With Topline driving solid EBIT growth

Group beer volume Consolidated revenue Consolidated EBIT (beia)


In mhl In m In m

CAGR +4.8% CAGR +7.8% CAGR +8.8%

2010 2014 2010 2014 2010 2014

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3. Regional strategic priorities
Defined strategy to capture regional specific opportunities

1 2 3 4 5 6

WIN IN LEAD BY COOL SHAPE THE DRIVE BE BREWING


PREMIUM MARKETING CIDER END2END COMMERCIALLY A BETTER
LED BY AND CATEGORY PRODUCTIVITY ASSERTIVE WORLD
HEINEKEN INNOVATION

12 Global strategy to exploit region specific opportunities.


1
Win in premium led by Heineken
Gaining momentum with Heineken in the US, Mexico and in Brazil

Heineken turnaround in US Mexico: Heineken Brazil HEINEKEN


in mhl
Success Story +48% 4Y CAGR
Yearly Growth CAGR +52%
Back to positive
growth in 2015

Share of
Premium
17%
14%
13%
10%
Volume
6%
development
in khl

'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 14
2007 2008 2009 2010 2011 2012 2013 2014 L52W 2010 2014
2015*

13 * Note: L52W ending 10/03/2015


1
Heineken Light best tasting light beer in the US
Video

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2
Lead by Cool marketing and innovation
Marketing is driving consumer pull for our brands and innovations delivering sustainable top line growth

Cool Marketing Innovation Rate


Americas has almost tripled revenue
from innovations over the last 2 years
(to c.6%)
Leveraging global innovation
successes eg Radler
Focus on margin enhancing products
which support top line ambitions

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3
Shape the Cider Category
Focus on Strongbow in the US is rapidly gaining momentum, driving double digit volume growth

2014 % Volume Share


Distribution rights transfered from Vermont 7%
Hard Cider Company (C&C) to in house from
1 January 2013 3.4%

Fastest growing cider brand in the US


Beginning of the End of year
#2 market share year

Depletions up ytd September over 40%


Best Tasting hard Cider
Strong sampling increasing brand awareness
Flavours addressing consumer demand for
variety and choice

HUSA and Canada account for 91% of volume. Nielsen Grocery through 01/03/2015, Brand Franchise.

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3
Strongbow
Video

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4
Driving E2E Productivity
To deliver increased efficiencies at the business

Productivity Improvement
15 6,000
Ongoing productivity gains and cost saving initiatives have
improved costs as % of revenue.
Main cost saving initiatives generated over 234m savings
(excluding IPO synergies) in the course of three years (2011-2014):
10 4,000 Supply Chain: FTE headcount optimization, Consumer value
Engineering, Energy and Electricity Savings, Network
Optimization
Commerce: FTE headcount efficiencies, Retail operation
improvement in Mexico, Sponsorship improvements, Agency
5 2,000 Fees Savings
2012 2013 2014 2015YTD
Support: FTE headcount optimization
Productivity per mhl / FTE Production FTEs

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5
Be Commercially Assertive
To drive excellence in outlet execution

Draft Systems Right Channels and Customers

Excellent Outlet Execution

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6
Brewing a Better World
Sustainability is embedded in HEINEKEN Americas strategy

Safety First Responsible Sustainability Sustainable


Consumption Sourcing

Eco-efficiency: Tangible
Cool@work & alcohol policy Haiti sorghum projects with
targets for energy and water
Extending safety from brewery Deliver on global industry Clinton initiative to stimulate
reduction
to sales & distribution commitments local farmers harvest
Water stewardship initiatives
including road safety 10% media spend target on Ongoing compliance to
in Mexico with local
Company wide Safety Strategy Enjoy Heineken responsibly Supplier Code Procedure
community for brewers for
(the 5Cs) and 12 Life Saving sustainable water supply in
Rules scarce areas

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4. HEINEKEN Mexico
Attractive growth prospect for beer

Facts HEINEKENs largest market


6 Breweries Positive underlying market fundamentals,
27.8 mhl beer including population growth, urbanisation,
41.5% SOM growing middle class
Main Brands
#2 Position
Beer the alcoholic beverage of choice (at 94%)
Exciting premium segment potential, still
underpenetrated
Applying a targeted regional strategy to drive
growth
OXXO partnership and development of own
stores (Six) strengthening commercial
execution and maximising volume and value

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4. HEINEKEN Mexico
Strong Topline growth since the acquisition

Strong national portfolio with Strategy continuing to deliver


representation across varied price points impressive growth
Revenue1 Operating profit (beia)1 Operating profit (beia)
2010-2014 2010-2014 margin2 2010-2014
Premium M M M
CAGR +6% CAGR +20% 20.4%

Sub-Premium
12.9%

Mainstream

Below Mainstream
2010 2014 2010 2014 2010 2014
Value
1 Includes domestic beer operations only
22 2 Includes domestic beer and export operations
Tecate
Video

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4. HEINEKEN USA
Portfolio Strategy driving improved share

Facts Economic country indicators are improving


9 Distribution Centres &
although overall beer market flat
6 Offices (White Plains HQ) Upscale outperforming led by craft, Mexican
9.7 mhl beer brands and cider
Main Brands
4.4% SOM
#2 Premium Position
Femsa transaction brought in complementary
Mexican brands Dos Equis and Tecate,
which are growing high single digits
Heineken brand declined since 2008
and now stabilized
HEINEKEN ideally placed to outperform

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4. The Mexican brands are driving market share...
With outperformance vs the US market since 2012

Dos Equis and Tecate in the US


+6.5%
CAGR OG

Tecate Original
-5% CAGR

Tecate Light
34% CAGR

Heineken US Brand split 2005 Heineken US Brand split 2014 Dos Equis
Others Others 14% CAGR

Heineken
Mexican 2010 2011 2012 2013 2014
brands
Heineken

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Dos Equis
Video

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4. HEINEKEN Brazil
Driving increased share by winning in the Premium segment

Facts
6 Breweries Main Brands #2 in premium segment with Heineken
12.1mhl Beer Heineken complemented by premium
9.4% Market share portfolio
#3 Position
Exciting potential longer term, despite
near term economic challenges
12%
Premium 11% Expanding capacity with 7th brewery
SOM 9%
8% Strategic partnership with Coca-Cola
7%
6% bottlers provides scale
5% 5%
17%
13% 14%
10%
6%

2010 2011 2012 2013 2014 2015 2016 2017

Premium SOM Heineken SOM of Premium


27 Source: Nielsen, YTD August 2015.
Heineken Door Lock
Video

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4. Canada, Caribbean and Export Markets
Diverse and profitable markets offer further opportunity for growth

Solid Regional Contributor Main Countries


2014 Data

Group Beer

11,272 km

Revenue

5 Brewery markets
4 Joint Ventures / Associates
40+ Export Markets

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5. Summary
Whats Brewing Seminar HEINEKEN Americas

Positive outlook for future Americas beer market growth


Premium expected to outperform overall beer category
Clear strategy in place to win in the region
HEINEKEN Americas well placed to capture growth and
continue to drive share

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