Efficiency improvements
11.
The second priority we have set is to accelerate
efficiency and cost reduction. A Total Productive
Management programme was started in 2005 with
the aim of implementing first-time-right and zero-
losses practices. The year 2005, though, saw an
increase in the cost of our resources, and particularly
in the cost of energy. In spite of higher energy costs,
production costs lowered. We will have to meet this
challenge through better purchasing and more
economic use of energy. We will also have to increase
the efficiency of our production network. So far,
we have realised cost reductions and going forward
we set ourselves new targets.
In the last 10 years, Heineken has ceased activities
in more than 30 breweries, including three in 2005.
Most of these closures have been in Europe.
Cost-reduction plans completed in 2005 and those
already running since 2003 will allow us to realise
cost savings of €170 million, of which €55 million
comes from the former Austrian-based Brau Union.
The results of the drive for efficiency will enhance
profitability and will partly be reinvested in order
to boost further our top-line growth. But accelerated
growth and efficiency can only happen if we commit
to faster decision making and execution. That's why
speed of implementation is our third priority.
Group beer volume
118.6 million
hectolitres.
Heineken volume
23.5 million
hectolitres.
Amstel volume
11.4 million
hectolitres.
Portfolio reviews
Over the last two years, we have reviewed
almost our entire portfolio of brands
to identify those which are strategic and
which truly create value. These are the
winning brands in which we will invest
time, energy and money.
Consumer-focused innovation
Consumer-focused innovation is at the
heart of our plans to drive top-line growth.
We constantly improve our offer, in the
form of new products, such as light and
specialty beers, as well as new draught
beer systems such as DraughtKeg,
BeerTender and XtremeDraught. For us
innovation extends to packaging and,
in 2005, even glassware.
Better execution in the on-trade
The future of our business lies in our ability
to innovate and to demonstrate that the
responsible consumption of beer is an
enjoyable social activity. We therefore
pay utmost attention to the quality and
level of freshness of our brands, through
the provision of improved draught beer
and cooling systems coupled with an
improved presentation to customers,
through innovative glasses and packaging.
Heineken N.V. - Annual Report 2005
