WINNING IN PREMIUM - Heineken N.V.
Transcript of WINNING IN PREMIUM - Heineken N.V.
Jan Derck van Karnebeek
WINNING IN PREMIUMby integrating Marketing and Sales
Chief Commercial Officer
What’s Brewing Seminar, August 27, 2015
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Jan Derck van Karnebeek
2015 Chief Commercial Officer
2013 Regional President Central and Eastern Europe and Chief Sales Officer
2011 Regional President Central and Eastern Europe
1991 Started with HEINEKEN, various senior commercial and general management positions across different OpCos
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Europe Europe
NORTH AMERICA
NORTH AMERICA
LATAM
LATAM
ASIA PACIFIC
ASIA PACIFICAFRICA & ME
AFRICA & ME
2014** 2020F
Advantage of focusing on Premium
Source: Canadean, **based on 2014 estimates. *PS – Premium Segment. Premium Beer (Lager) >= 115 price index
..and growing across all regions
PS* CAGR 2.8%
4.3%
4.3%
2.8%
0.5%
5.2%
PS* CAGR
At a more attractive price point..
Price Index
Discount
Mainstream
Premium
Superpremium
<90
>=90-114
>=115-149
>=150
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HEINEKEN has a proven Track Record in Premium
Source: Canadean as at 24.08.15, Premium Beer >= 115 price index
The most premium Brewer in the world The Brewer with the fastest growth in premium
36%24% 17% 14%
HEINEKEN Competitor A Competitor B Competitor C
% share of PS of total company volume
Premium Other
9.6%
4.6%4.1%
-0.6%HEINEKEN Competitor B Competitor C Competitor A
PS volume growth CAGR 2009-2014
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HEINEKEN has the optimal footprint to maximise the premium opportunity
Source: Canadean
Strong presence in key Premium markets
Top 10 PS markets:
#1 or #2 in Premium in 5 markets
Within Top 3 in 8 markets
Strong Route to Market in all key markets
HEINEKEN’s broad footprint
Operating Companies
Joint Ventures/ Associates
Export
Licences
70+COUNTRIES
160+BREWERIES
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A Winning Premium Brand Portfolio
Source: Canadean
Heineken® the leading international Brand
Heineken® In +160 markets
The only truly
international premium
Brand
20-year CAGR c. 5%
5 distinctive International
Cider Brands, covering full
range of premium segments
Desperados Sold in 86 markets
5-year CAGR 15%
In 2014/2015 expanded
in 21 new markets
Global Premium specialty Beer & Cider
Dos Equis #2 Brand by volume in
US portfolio
4-year CAGR of 16% (US)
Price index 147 vs.
Mainstream (US)
Tiger
#5 largest Brand by
volume at 5.8Mhl (2014)
Key driver of Asia Pacific
volume growth
Sold in 50 markets
Regional Premiumpowerbrands
Birra Moretti Le Regionali
Price index 187 vs. core Brand
Local Brands:Premium extensions
Zywiec Variants
Price index 117 vs. core Brand
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Agenda: The HEINEKEN JourneyWinning in Premium by integrating Marketing and Sales
Past Today Future
Developing world-class Marketing
and Sales functions
One Commercial function integrating
Marketing and Sales
Integrated Commercial function to scale the Premium opportunity
2010-2015 2015 2015-20202010-2015 2015-20202015
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Agenda: The HEINEKEN JourneyWinning in Premium by integrating Marketing and Sales
Past Today Future
Developing world-class Marketing
and Sales functions
One Commercial function integrating
Marketing and Sales
Integrated Commercial function to scale the Premium opportunity
2010-2015 2015 2015-20202010-2015 2015-20202015
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2010-2015
Development of a stronger Marketing functionDriving powerful marketers and enhancing Brand equity
World class Marketing capabilities driving strong Brand Assets
Global Creative Leadership formally acknowledged
Rapid evolution intodigital leading edge
DIGITAL
Brand Building Framework as a global way of building Brands
6,400 training sessions delivered
Digital media investments more than doubled since 2012
Significant increase in investments with key global partners (Facebook, Google, Twitter, Instagram)
2015: Cannes Lions Creative Marketer of the Year award
41 Lions awards across 7 markets over 3-year period
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2010-2015
Development of a stronger Sales functionDriving excellence in execution leveraging extensive scale
Executing consistent, repeatable processes globally
Global Sales Capabilitiessetting industry standards
World-class strategic partnerships based on local strenghts
& PEOPLE
Common language and
principles applied across:
23,000-strong Sales Force
70+ markets
1,000,000 outlets
From Europe to global coverage
HEINEKEN rated above industry
average by 80%
10 Sales Capability programs
Sales support systems rolled out
globally
Global Sales Resource Committee
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2010-2015
Separate functions delivered premium results
Marketing: Stronger Brands + Sales: Excellent Execution
Source: Heineken® Canadean Forecast, HEINEKEN internal volume, year-to-date May 2015; Top Markets defined as Top 30 markets by volume, Nielsen Modern Trade year-to-date August 2014 for innovation
Heineken® Growth Accelerated InnovationsEstablishing Cider
Significant expansion into
New Markets beyond
Traditional Cider countries
Identification of key
Must-Win Markets
Portfolio of 5 distinctive
International Cider Brands
Innovation rate step up from
3% in 2010 to 7.7% in 2014
Contribution to Group top line
€1.5bn in 2014
Targeted innovation strategy
Premium segment leadership
with 7.6% share in 2014
Equity score ≥ vs. leading
premium competitor in 70%
of Top Markets
Disproportionate growth
in 2014, +5% vs. last year
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Heineken® largest Brand in PS Heineken® share of business*** 2014
Heineken® Brand: clear leadership in PS
Source: *Canadean* *ONEquity 2013: Brand equity score is based on average score on most recent quarter for all markets available on ONEquity: Respondents are asked to rate brands on a 1-10 scale, where 1 means 'poor' and 10 means 'outstanding‘** *Based on 2014 consolidated financial results and group beer volume
Strengthening Global Leadership
14%
Beer Volume Revenue OperatingProfit (beia)
Heineken®
Corona
Budweiser
Stella Artois
Carlsberg
Dos Equis
Tiger
6.0
6.2
6.4
6.6
6.8
7.0
7.2
7.4
7.6
0% 5% 10%
Bra
nd
eq
uit
y**
*PS share
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Shaped Portfolio and Innovation Shaped Key MarketsEstablished Cider
Established the Cider category
* % of consumers drinking alcohol, that do not drink lager
Capturing new Consumers through Cider
COGS
Focus on Traditional Cider markets and expansion to New markets
5 strong distinctive Brands MaximiseOpCo Profitability
51%*26%*
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Innovation a key competitive advantage
* From 1 January 2013, the innovation rate is calculated as revenues generated from innovation introduced in the past 40 quarters for a new category, 20 quarters for a new brand and 12 quarters for all other innovations, excluding packaging renovations divided by total revenue
A sustainable contibutor to Top Line Growth
3.0%
4.1%
5.3% 5.9%
7.7%
2010 2011 2012 2013 2014
2020 Target: 6%
€0.4bn
€1.5bn
2010 2014
40% CAGR
Innovation rate* New pack types Brand extensions
Improving draught offerRadler and alcohol free propositions
Innovation revenue
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Agenda: The HEINEKEN JourneyWinning in Premium by integrating Marketing and Sales
Past Today Future
Developing world-class Marketing
and Sales functions
One Commercial function integrating
Marketing and Sales
Integrated Commercial function to scale the Premium opportunity
2010-2015 2015 2015-20202010-2015 2015-20202015
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From three separate World-Class Functions…
Developing strong Brands with high preference in
Consumers Consideration Sets
Developing tools and capabilities to make Brands relevant at the Point of Sale: Picture of Success
Developing world-class capability to win at the Point of Sale with
Excellent Outlet Execution
MARKETING TRADE MARKETING SALES
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3
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…to integrated functions mirroring Shopper Journey
THESHOPPER
JOURNEY“MY PREFERRED
BRAND”“WITH THE RIGHT
ASSORTMENT”“AVAILABLE
WHERE I NEED IT”
MARKETINGBuild Brands with
highest preference
TRADE MARKETINGCreate outlet-basedPicture of Success
SALESConsistently execute withExcellent Outlet Execution
THE
JOURNEY
Premium Focus
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Agenda: The HEINEKEN JourneyWinning in Premium by integrating Marketing and Sales
Past Today Future
Developing world-class Marketing
and Sales functions
One Commercial function integrating
Marketing and Sales
Integrated Commercial function to scale the Premium opportunity
2010-2015 2015 2015-20202010-2015 2015-20202015
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2015-2020
Taking the Premium Opportunity to the next Level
Shape the key markets
Develop portfolio and innovation
Integrate Cider into brewery network and Beer Route to Market
Educational - build the category through product story
Capture growth in the Low/No Alcohol category
Satisfy the need for Variety and Craft
Lead in Draught Systems
development
Accelerate market share in emerging markets
Innovate in established markets
Localised Jobs To Be Done
Leverage unique platforms
Strengthen Heineken®
global leadershipKeep world-class pace
with InnovationReaching consumersbeer can’t with Cider
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Heineken® leading in equity and preference against Premium competitors
Source: ONEquity Latest Moving Annual Total vs. Leading Premium Brand
Equity Preference
Stronger or equal in 21of our Top 30 Markets
Stronger or equal in 18of our Top 30 Markets
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4
12
Stronger
Parity
Weaker
16
5
9
Stronger
Parity
Weaker
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Converting Heineken® Preference to Market Share is a Growth Opportunity
0
5
10
15
20
25
30
35
0 1 2 3 4 5 6 7 8 9 10
MARKET SHARE
Source: ONEquity 2014 Moving Annual Total Preference/Canadean 2014 Market Share
Premium conversion
Preference
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4
12
Stronger
Parity
Weaker
Correlation between Preference and Market Share per country
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Strengthening Heineken® global leadership with the right Focus by Geography
Where the Brand is well established: (>5% Market share)
Convert equity into broader penetration
in emerging economies
Drive innovation & renovation
in developed economies
Where the Brand is new & small:(<5% Market Share)
Build Brand equity
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Fully Leverage Heineken® Competitive Advantages
Integrated global programs based on our unique Brand Platforms
High profile sponsorships to build premium Brand equity
Complemented by relevant local topspins
Occasion-based activations at the Moment of Truth
Enjoy Heineken® Responsibly programSPONSORSHIP
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2015-2020
Maximizing the Cider Opportunity...
Source: Canadean October 2014
Fastest growing category Sustained Innovation
Focus on Quality Designed for Relevance
MOST AWARDED CIDER
2%
5%
1%
Beer Cider Wine
CAGR 2010-2013
3%
6%
2%
Beer Cider Wine
CAGR 2014-2019
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...and leveraging Scale and System Strength
Revenue/hl
We have made Cider more accessible…
...and still more attractive than beer…
2014 2015
Cider Consumer price
Beer Cider
…with more cost effective use of our breweries
COGS
Cider COGS
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Strengthening and expandingour leadership in Innovation
Satisfying the
need for Craft
& Variety
Seizing the
low/no alcohol
opportunity
Leading
in Draught
Systems
Maximising absorption capacity through global-local collaboration
Accelerating the clock speed of Innovation to tap into new sources of growth
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2015-2020
Innovation: addressing Moderation
Consumer Opportunity Growth DriversBusiness Opportunity
Increasing moderation theme
Consumer pull for adult refreshing alternative to Carbonated Soft Drinks
Demand for natural authentic product
Potential for new consumers beyond traditional beer drinkers
Best tasting products
A portfolio approach: Brand, pack type and price to serve the right Point of Sale
Striking the balance between functional and emotional benefit in communication
No longer a niche opportunity
Average rev/hl for low/no alcohol significantly higher than beer average
Existing breweries can be used to produce low/no alcohol product
Limited additional CAPEX needs
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Birra Moretti RadlerVideo
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2015-2020
Strategic Programs to Maximise Growth
Digital Transformation
Creative Leadership
Excellent Outlet Execution
Use creative technology
to unlock shopper opportunities
throughout the Path to Purchase
Implement perfect execution
of the in-outlet programs
Take the lead in shaping the
creative norms to create impact
and drive leadership
… TO MAXIMISE OUR SHARE IN PREMIUM
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HEINEKEN leading edge in digital transformationServing consumers and shoppers throughout their journey
Customer
Reaching the right consumers, with the right content,
in the right context
Supporting shoppers and partnering customers to take the shopping
experience to the next level
Storytelling Precision
Marketing
Internet
of Things
Supported by DIGITAL PARTNERS to step up digital strategy
Indirect
B2C
Direct
B2C
B2B
Doubling Media spend on digital by 2020 +1 Billion € via E-Business by 2020
Consumer
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Excellent Outlet ExecutionA global framework to win at the “Moment of Truth”, everyday, everywhere
1. Leadership
2. Alignment
3. 100% data
4. Focus & Simplicity
5. Sell Out
6. Step by Step
7. Empowerment
8. Accountability
23,000-strong Sales Force aligned under one program
Rolled out globally across all markets
Covering Traditional, On, Modern and Wholesale trade channels
Based on 8 Execution Principles Full Coverage for Impact
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Creative Leadership to win the battle for attentionMaking an Impact, Holding Attention, Closing the Purchase
The Creative Ladder
Step change the creative ambition of
strategic Brands
Embed creative principles in the company culture
Leverage recognition to attract talent
Trigger debate to raise the bar on
creativity
The Four Creative Principles The Creative Council The Marketer of the Year
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Setting the standard in Brand Building
Innovative Aspirational ResponsibleMINI JAMES BOND THE HERO
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HEINEKEN ideally placed to maximise the Premium opportunity, with strong proven track record and broad Premium Brand Portfolio
Separation of Marketing and Sales through 2010-2015 strengthened the functions and delivered results
2015 the right time to integrate Marketing and Sales units as one Commercial function. This will enable HEINEKEN to take the Premium opportunity to the next level, thereby:
Extending the Premium Brand Portfolio, led by Heineken®
Fully capturing the Cider opportunity
Maximising innovation opportunities
Utilising key digital, outlet execution, and creative strengths to further drive Brand Equity
WINNING IN PREMIUMSummary
What’s Brewing Seminar, August 27, 2015
WINNING IN PREMIUM by integrating Marketing and Sales
Q&AJan Derck van Karnebeek