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France
Marketing innovations drive Heineken brand growth
Heineken N.V. Annual Report 2004 Report of the Executive Board Regional Review Western Europe
Amstel plays an important role in the mainstream beer segment and was supported nationally
through exploitation of the UEFA Champion's League sponsorship and through promotional initiatives
at a local level. Sales of Amstel in PET bottles, launched in 2003, continue to progress well.
The large alcohol-free segment in Spain again showed robust growth, reflecting the continuing
trend towards healthier lifestyles, as well as increased restrictions on alcohol consumption. In particu
lar, our Buckler brand profited from this. As elsewhere, Fleineken Espana participates actively in
campaigns to encourage drivers to drink alcohol-free beer.
Production development
The construction of the new Heineken Espana brewery in Seville is well under way, with bottling
scheduled to start at the end of 2006 and production reaching full capacity in 2008. The brewery,
with an initial capacity of 4.5 million hectolitres, will offer greater efficiency and productivity as well
as lower production costs.
The brewery will brew all Heineken Espana brands, but will focus on production of Cruzcampo.
With a total investment of €233 million, the project represents the largest private industrial investment
in the city of Seville. The project will be partly financed through the sale of the city centre plot of
around 17 hectares on which the existing brewery stands.
Other significant developments were the opening of a new PET bottling line in Jaèn in order to meet
anticipated demand and a bronze award to our Arano brewery in Navarro from the European
Foundation for Quality Management.
Total beer sales
million hectolitres
Market share
percent
Market position
position
The French beer market lost about 5% in volume
in 2004, amid more intense price competition and
promotional activity in the mainstream segment.
Fleineken France, though, continued to focus
on its leading premium brands. As a result we were
able to contain our loss in overall market share
to one percentage point.
Overall beer volumes for Heineken France declined from 7.4 million to 7.1 million hectolitres.
The operating profit was severely impacted by the combined effect of restructuring costs on the
wholesale activity and changes in business tax.
Brands
Through strong marketing initiatives the Heineken brand
stabilised its sales volumes and was able to gain market
share in both the on- and off-trade channels. The brand was
supported by the launch of the award winning Tee Pack'
packaging in the off-trade during the summer and through
the success of draft-beer David system within the on-trade
channel.
The Amstel brand is the leading draught beer brand in
the on-trade and Amstel Free has been introduced as part of
the on-trade portfolio.
In the off-trade, our innovative Desperados mini-kegs
were launched and the Pelforth brand confirmed its potential
through the success of the product line extension Pelforth
Ambré. Strong promotional pressure in the mainstream