Heineken (Netherlands)

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Family-controlled Heineken became the world's second largest brewer during 2016 and owns the best-selling premium beer brand. It manufactures its own products through a huge and wide-ranging network of 100 breweries in more than 50 countries, and licenses the operation to other companies where it doesn't have its own plant. The company also owns a wide variety of subsidiary beer brands including Amstel and Murphy's Irish Stout worldwide, Tiger in Asia, Cruzcampo and Moretti in Europe, among many others. After a slow start, Heineken has entered wholeheartedly into the consolidation of the global beer industry since 2007. That year, it launched a joint bid to break up the UK's Scottish & Newcastle in partnership with Carlsberg. Completion of that deal the following year established Heineken as the leading brewer in the UK. In 2010, it expanded its footprint in Latin America with the acquisition of Mexico's second largest brewer FEMSA, adding Sol, Tecate and Dos Equis to its worldwide portfolio. Subsequent purchases include Singaporean brewer Asia Pacific Breweries, owner of Tiger Beer; and Schincariol in Brazil.

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Brands

Amstel Cruzcampo
Fischer Tiger Beer
Murphy's Heineken
Paulaner Export Gold
DB Breweries Group Asia Pacific Breweries
Quilmes Kaiser
Botchkarov Zywiec
Brau Union Goesser
Brand Panach
Affligem Cruzcampo
Moretti Ichnusa
Fuerstenburg Hoepfner
Stepan Razin Vrumona
Warka Zipfer

Worldwide

Heineken UK

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 11th May 2017: Craft beer is still booming in the US. Heineken doubled down with the purchase of the 50% it didn't already own in California brewer Lagunitas. No price was disclosed, but it was probably steep. Craft beers and imports are providing the only growth in an otherwise falling market. Sales of Lagunitas IPA rose 17% last year to around 7m cases. However Heineken and others have plenty of work ahead if they are to catch up with AB InBev, which has already hoovered up more than a dozen small local breweries. Latest addition to its "High End" craft division is North Carolina's Wicked Weed Brewery, acquired this week.

Adbrands Weekly Update 4th May 2017: Ads of the Week "Trailblazers". Since Heineken dropped Wieden & Kennedy as its global creative agency in favour of Publicis two years ago, the brewer has lost the wit and inventiveness for which its ads used to be known, but the new agency adds spectacle. This latest campaign is the most lavishly produced to-date, with all the CG effects that top prodco MPC can muster. But that doesn't disguise the fact that the underlying concept - that old chestnut of four blokes on their way to the bar - is in serious need of an upgrade.

Adbrands Weekly Update 23rd Feb 2017: Ads Of The Week: "Sand From Bottles". Colenso BBDO's "Brewtroleum" film for Heineken-owned DB Export was one of the world's most awarded marketing campaigns last year. Here's the follow-up, launching a system that will process empty beer bottles into sand that can be used for construction and other industrial purposes in place of New Zealanders' beloved beach sand. As with the Brewtroleum concept - which ran cars on beer! - we're not sure how practical this is, but the idea is fabulous. 

Adbrands Weekly Update 16th Feb 2017: Japanese brewer Kirin called time on its ill-fated expedition into Brazil, selling its subsidiary there, the former Schincariol, to Heineken for Y77bn, or around $700m. It's a market Heineken already knows well, and the combination with its existing Bavaria business there moves the Dutch group into second place locally, though still a considerable distance behind local leader AB InBev. Kirin acquired family-owned Schincariol in 2011 for a whopping $3.9bn, but had to contend first with lawsuits brought by non-controlling family members who hadn't agreed to the deal, and then the dramatic downturn in the Brazilian economy. The sale crystallises a $3bn loss on the whole saga, though Kirin had already wrote off most of the value of the business. The deal preceded publication of solid results for Heineken for 2016, in which annual beer volumes topped 200m hl for the first time. Revenues rose by 1.4% on a reported basis (but 4.8% organic) to E20.79bn. However net profit slumped by almost 19% to E1.54bn as a result of non-cash accounting adjustments. Without those items, underlying net profit was up 2.5%.

Adbrands Weekly Update 2nd Feb 2017: Ads of the Week: "The Invention". Needless to say, the Super Bowl dominates all watercooler conversation within the advertising industry, but it wasn't the only game in town this week. Though it shifted all of its international advertising to Publicis last year, Heineken wisely chose to retain TBWA\Neboko as its domestic agency. That shop has continued to deliver fine work for the beer; work that in our humble opinion is far superior to most of the ads we see elsewhere from Publicis. This lavish and entertaining new film surely deserves a wider audience than merely the Dutch market. Combustion engines and electricity are all well and fine, but nothing beats a cold beer at the end of the day. 

More about Heineken from Adbrands Weekly Update


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Background

Free for all users | see full profile for current activities: Produced from a superior form of specially developed yeast (which the company still produces exclusively in Holland and ships to its global breweries and partners), Heineken was first introduced in 1863. That year Gerard Heineken purchased "the Haystack", a brewery in Amsterdam that was already around 300 years old, and began brewing his own beers. By 1876, he was exporting to France and by 1894, to the US. The company was the first brewery to resume exports of beer to the United States following the repeal of Prohibition, and quickly established itself as the country's #1 imported beer. Meanwhile, Heineken was expanding its international operations elsewhere, forming a joint venture in Singapore in 1931, now called Asia Pacific Breweries. Other acquisitions followed in Asia, South America and Africa.

By 1955, half of the beer produced in Holland was manufactured for export, and the company continued to acquire breweries in other countries. In 1968 Heineken bought the Amstel Brewery in Holland and its own chain of international breweries. The company's growth accelerated even faster after 1971, when the business passed to Alfred "Freddy" Heineken. During the 1940s, he was sent by his father to the US to learn American marketing techniques. He put these into practice in the 1970s, making Heineken into a household name with a series of memorable marketing campaigns, not least the "Refreshes the parts other beers cannot reach" TV ads (originally created by what was then Lowe Howard-Spink in London), which ran in the UK for more than 30 years). In addition, in 1983, the brewery expanded its range to become a producer of stout through the acquisition of James J Murphy in Cork, Ireland, makers of Murphy's.

In 1991, the company cemented its position in the US, buying out long-established family-run importers Van Munching & Co. It also began to expand into Eastern Europe with the purchase of Hungary's Komaromi Sorgyar brewery. The 1990s saw a string of further acquisitions including Italian brewery Birra Moretti, France's Fischer Group, Slovakia's Zlaty Bazant and Poland's Zaklady Piwowarskie. In 1998, the group merged four Polish breweries to form Zwyiec Group. In 1999 Heineken agreed to acquire Diageo's majority stake in leading Spanish brewer Cruzcampo, merging that business with its existing El Aguila brand. However regulators forced the group to sell off all but its three leading beer brands, Heineken, El Aguila and Cruzcampo.

The group was also rumoured to be among the bidders for UK beer companies Bass and Whitbread. However Belgian arch-rival Interbrew acquired both. (Interbrew was later forced to relinquish Bass). The deal created a problem for Heineken, in that it was left without a licensing arrangement in the UK, one of its key markets. Whitbread had held the UK license for Heineken since 1968. Following the sale of its beer business to Interbrew, Whitbread leased back from the Belgian company one of the breweries included in the sale and continued to produce Heineken under license until the end of 2002 in order to satisfy their contractual obligations. 

Meanwhile Heineken continued to add to its portfolio elsewhere in the world, acquiring Gemer and Martiner breweries in Slovakia and Affligem in Belgium. Early in 2001, the group became majority shareholder in Nigerian Breweries, the #2 beermaker in Africa. It also took its first steps into Germany, acquiring a 49.9% stake in BrauHolding International, a subsidiary of German conglomerate Schorghuber.

The group extended its reach in Brazil in early 2002, increasing its stake in local brewer Kaiser, the Brazilian licensee for Heineken, to 20%. At the same time the Dutch company gave its support to the acquisition of the rest of Kaiser by Canadian brewer Molson. The group also acquired Russian brewer Bravo International, whose brands include Ohota, Botchkarov and the local license for Lowenbrau; as well as Egypt's only brewery, Al Ahram Beverages. Other purchase included a 45% stake in Karlsberg International Brand, which ranks about 12th among German brewers, in partnership with its German partner, BrauHolding; and also a 50% stake in the holding company controlling CCU.


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