Heineken Can't Compete with Craft Beer, Says CEO
August 28, 2013
Is the 'craft beer phenomenon' knocking off Heineken?
"You cannot compete with Heineken or any other brand against the craft beer phenomenon."
The above sentence, reported by BeverageDaily.com as part of a statement by Heineken CEO Jean-Francois Van Boxmeer, can be taken a few different ways by craft beer enthusiasts. The first instinct is to celebrate his admission — "Of course a macrobeer can’t compete with a craft brew!" — but that’s not exactly what Van Boxmeer means.
As would be expected from a CEO of a publicly owned company, he’s not discussing the quality of the product. Van Boxmeer is talking about money, sales, profit, and the unending growth a big company like Heineken is supposed to show.
Though the "craft beer phenomenon" has less than 10 percent of the U.S. beer market in sales, that number has been rising. Even more frightening to Big Beer is the fact that as craft beer sales and volume have increased over the past few years, macrobrew sales have begun to decline.
Per Van Boxmeer on the same call, to Societie Generale analyst Jamie Norman: "Craft beers have been taking the lion’s share of beer market growth over the last decade — practically exclusively."
Craft beer appears to have finally gotten a good foothold in markets around the country, and where there used to be just a few choices — Bud, Miller, Coors (and Heineken as the fancy option) — you’ll now find dozens of different labels on shelves. This is the case even in smaller grocery or beer stores in a less populous areas. Drinkers all over are starting to appreciate beer for its varied flavors and styles, not as just something to chug down as fast as possible.
Even though most craft breweries are small, and many struggle to stay afloat, you could say the sector as a whole is "disrupting" the beer market. Some industrial beermakers are trying to address this by coming out with craft beer copycats, beers that are packaged like crafts or have a higher alcohol content and claim to have more flavor, even though they may be produced by the same large brewing facilities as the rest of the macro portfolio.
Heineken, it appears from this call, is not planning to go that route. Instead, the Dutch-based brewing company (third largest in the world, after Anheuser-Busch InBev and SABMiller) is expanding its portfolio on the low end — with newly acquired Dos Equis, Tecate, and Sol brands — and throwing its marketing weight behind Strongbow cider.
Good call, Heineken, good call.
— Danya Henninger, The Drink Nation