2003 in Retrospect Brand policy While resources and processes for optimis ing the operating companies' commercial policy are developed centrally within Heineken, the operating companies them selves decide how to deploy these uniform sales, distribution, marketing and com munication tools in the best possible way. Each operating company is responsible for its own performance. Progress was made in 2003 in harmonis ing and refining the systems and defi nitions used in formulating commercial policy and developing and improving our brand performance indicators. The objective of this harmonisation and improvement process is threefold: firstly to improve the quality and comparability of our analyses of the performance and vitality of our brands, brand portfolios and brand portfolio management methods, secondly to ensure more efficient deploy ment of people and resources within the operating companies' commercial organi sations, and thirdly to make brand com munication more efficient and effective. This process will be instrumental in adding new momentum to the company's organic growth. Improved analysis and manage ment tools will be put into use by some of the operating companies as early as 2004. Brand portfolios Total beer volume2 in 2003 was made up as follows: Heineken brand 20.3%, Amstel 10.1% and other beer brands 6g.6%. The operating companies' brand portfolios consist of a mix of local and international beer brands. As well as a carefully judged brand portfolio, securing a strong position in local markets also requires an efficient distribution network with good coverage. In addition to Heineken and Amstel, the international brands comprise a collection of speciality beers, including Desperados, Paulaner Hefe Weisse, Affligem abbey beer, Murphy's Irish Stout and Murphy's Irish Red, to satisfy the consumer's growing demand for variety. Although sales of these beers are modest in relation to Heineken's total volume, they are grow ing year on year at a substantial rate and are helping to improve the sales mix. For the Heineken and Amstel brands, the company develops and maintains central guidelines and standards for brand style, brand value and brand development. At the global level, central support and benchmarking programmes are used to optimise local marketing, sales and distribution. Total Heineken sales in millions of hectolitres 24 18 16 14 12 L 10 8 6 4 2 0 G) O W CM CO CT1 O O O O CT1 O O O O <H CM CM CM CM Heineken The Heineken brand achieved sustained growth in most of its markets, particu larly those in Southern Europe and Asia/Pacific and the emerging markets in Eastern Europe. Sales of Heineken beer in the premium segment in 2003 increas ed 6.1% to 18.5 million hectolitres, with Italy, Poland, Spain, France and the Far East accounting for most of the growth. Worldwide sales of Heineken beer were 4.3% higher at 22.1 million hectolitres, excluding Heineken Cold Filtered, a beer brewed to a different recipe in the United Kingdom, production and sale of which were discontinued in 2003. Sales of the Heineken brand grew fastest in Spain, Italy, France and the Far East, developed markets in which Heineken was able to consolidate its leading position as an international premium brand. Other important growth markets in Europe were Poland and Croatia. In 2003 the Heineken brand was relaunched in the UK and positioned in the premium segment, as in the rest of the world. With the start of local production of Heineken beer in Russia, substantial sav ings on import duties have been made and the brand's growth potential has been greatly increased. In the US, the histo rically strong growth trend slowed sharply, the principal causes being the slow economic recovery, poor weather in the North-East (the most important region for Heineken) and the outbreak of the Iraq war early in the year. Heineken was able to sustain the previous year's growth in other parts of the US and Canada. The fastest growth in the Asia/Pacific region was achieved in Australia, Vietnam, Thailand, Singapore and Taiwan. Sales growth in China was less rapid, however, due in particular to the Sars epidemic in the first half of the year. Local production of Heineken in China will start in 2004, which will yield valuable savings on import HEINEKEN N.V. ANNUAL REPORT 2003 16

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2003 | | pagina 22