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