23
Risk Management (continued)
Industry consolidation
Health and Safety
Product safety and integrity
Report of the
Report of the
Financial
Sustainability
Other
Introduction
Executive Board
Supervisory Board
Statements
Review
Information
Heineken N.V. Annual Report 2017
Strategic risks
What could happen
Consolidation of the alcoholic beverage
industry may affect existing market
dynamics in the future due to competitive
disadvantage with suppliers and increased
competition on commercial spend and
customer acquisition strategies.
Recent developments
Despite recent market consolidation, beer
remains a very local industry with respective
country shares more relevant than global
share. HEINEKEN remains committed
to winning through a portfolio strategy
focused on premium and led by Heineken®.
Within individual markets, international and
local brands complement Heineken® and
provide valuable scale.
What are we doing to manage this risk
HEINEKEN is constantly working on improving
its cost efficiency, while rolling out its strategy
to maintain and develop its competitive
advantages, in particular in the premium
and cider markets. Through a number of
acquisitions, HEINEKEN has evolved its
footprint extensively to reach an optimal
balance of both highergrowth developing
markets and more stable developed markets,
and to build an extensive and complementary
brand portfolio alongside its flagship
Heineken® brand.
Explore Further:
- Deliver top line growth, page 10
- Drive end2end performance, page 11
- Main changes in consolidation, page 26
Operational risks
What could happen
HEINEKEN is committed to providing
a safe workplace for all employees and
contractors. Despitethe controls in place,
incidents and accidents may happen
in the brewery, our supply chain and in
HEINEKEN's route-to-market, leading to
physical injuries or fatalities to employees,
contractors or members of the public.
Recent developments
Given its growing presence in emerging
markets, safety is an ongoing challenge and a
permanent focus area. Rolled up throughout
all operations,the HEINEKEN Life Saving Rules
target the activities that carry the greatest
safety threats to employees and contractors.
Despite these efforts, several significant fatal
accidents have occurred, underlining the
importance of realising further improvements
in the area of safety. In particular, a specific
programme to improve road safety, being one
of the highest risk areas, has been set up and is
being rolled out.
What are we doing to manage this risk
HEINEKEN has established 'Safety First' as
a key employee behaviour and Health and
Safety as a pillar of its Brewing a Better World
programme. The global safety programme
in place aims at enhancing global standards,
organisation and processes, and strengthening
safety leadership and safety behaviours.
Continuous improvement is achieved through
global compliance monitoring, systematic
gap-closing and central reporting of accidents,
incidents and near-misses.
Explore Further:
-Promoting Health and Safety, pages 135,144
Operational risks
What could happen
Poor quality or contamination of any of
the HEINEKEN products, be it accidental
or malicious, could result in health hazards,
reputational damage, financial liabilities
and product recalls.
Recent developments
Innovations and increased local sourcing
have led HEINEKEN to further strengthen the
controls on recipe governance and production
processesin orderto maintain its food safety
and quality standards. Changestothe
environment in recent years, such as high speed
of information, growing impact of social media
and tougher legal environment in certain
jurisdictions can magnify the impact of any
quality issues or allegation thereof
What are we doing to manage this risk
HEINEKEN has established a comprehensive
company-wide Quality Assurance programme
covering production standards, recipe
governance, suppliers' governance, production
material risk and country risk. Should this risk
materialise, Global recall and crisis procedures
are in place to mitigate the impact
