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United States
Regional Review
The Americas
Group volume
Americas
in millions of hectolitres
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the Caribbean. The production, sale and
distribution of Heineken beer in Chile and
Argentina was transferred from former
partner Quilmes to CCU, in which Heineken
had acquired an indirect interest in 2003,
via its 50% stake in IRSA. The latter in turn
has a majority interest in CCU, which is by
far the largest brewer and beverage
supplier in Chile and owns breweries in
Argentina. Heineken also owns a number
of breweries in the Caribbean and Central
America and has interests in and licensing
agreements with several brewers in Cen
tral and South America. The beer market
in this region showed modest growth
in 2003. On the basis of the predicted
economic and demographic trends,
Central and South America offer good
growth prospects in the longer term.
Modest growth in a virtually flat market
While the US beer market contracted
by around 1%, the imported beer segment
showed modest growth. Heineken and
Amstel Light increased their shares of the
imported beer market slightly and sales
rose to just over 6 million hectolitres, but
the weaker dollar meant that the result
was substantially lower.
Against the background of the weakness
of the economy, the war in Iraq, a cold
winter in the North-East and the introduc
tion of a smoking ban in bars and restau
rants in some states, the US beer market
had its worst year for a decade in terms of
sales volume. As in previous years, the
take-home segment grew at the expense
of the on-trade.
The light beer segment carried on
growing, largely due to the rising demand
for low-carbohydrate beers. Heineken
USA is well placed to profit both from the
sustained popularity of light beers and
from the emergence of the low-carb
segment, because Amstel Light sells in
both markets.
Performance
Mainly due to the very bad weather, the
beer market in the North-East of the US
was weaker than in the rest of the country.
Sales of Heineken and Amstel Light, both
of which have a relatively strong presence
in this region, were adversely affected,
but this was made up by strong growth in
the rest of the US, especially in the West.
The Heineken and Amstel Light brands
occupy fundamentally strong market
positions which provide a good basis for
further growth. Heineken USA's main
strategic objective in the years ahead will
be to build even closer relationships with
the major retail chains, while continuing
to focus on the higher end of the on-trade
segment. The growth strategy for the
East Coast is to concentrate on extending
the market share and for the West Coast to
work on expanding the distribution.
Marketing and distribution
With the launch of Heineken's new
aluminium bottle and 16-ounce PET bottle,
which are helping to broaden the
availability of Heineken and Amstel Light,
further progress was made in creating
more relevant packaging variants for a
wider range of venues.
Heineken was again a principal sponsor
of the Grammy Awards, the Latin Grammy
Awards and the Latin Billboard Awards,
and its involvement in the production of
the Red Star Sounds CD, created to
support new young talent, was a great
success. Much publicity was also gained
from sponsorship of major events such as
the US Open tennis tournament and the
movie The Matrix Reloaded.
Amstel Light, positioned as 'the beer
drinker's light beer', is market leader in the
imported light beer segment. The brand
was supported through sponsorship of
sports events and summer activities.
A significant development in this area
was the appointment of Amstel Light as
the official beer of the Professional
Golfers' Association (PGA). Through the
brand's sponsorship of the Iceland Open,
Amstel Light drinkers were offered a
chance to take part in a unique round-the-
clock tournament by the light of the
midnight sun.
REPORT OF THE EXECUTIVE BOARD
37