Changing consumer preferences Management capabilities Industry consolidation Health and Safety Report of the Supervisory Board What could happen Consumers' preferences and behaviours are evolving, shaping an increasingly complex and fragmented beer category. This requires HEINEKEN to constantly adapt its product offering, innovate and invest to maintain the relevance and strength of its brands. Failure to do so would, in the longer term, affect our revenues, market share and possibly our brand equity. Recent developments The popularity of craft beer and the rise of low- and no-alcohol products have been the most noticeable changes in consumer tastes i n recent years. HEINEKEN has fully embraced these trends, as shown by the acquisition of Lagunitas, the addition of several specialty beers to its craft portfolio and the launch of Heineken® 0.0. to complement its low- and no-alcohol category. What are we doing to manage this risk HEINEKEN has further strengthened its commercial organisation, innovation programme and marketing and sales capabilities. Significant investments have been made in consumer and market intelligence, new products and formats (both through innovation and through acquisitions) and in brand protection to anticipate and respond to industry changes. Explore Further: - Del iver top l ine growth, pages 9-15. - Advocating responsible consumption, pages 120, 134-137. What could happen HEINEKEN relies on the skills of its people to lead its growth agenda and deliver on its strategic ambitions. HEINEKEN may not be successful in attracting, developing and retaining diverse and talented people and leaders with the required capabilities, which may jeopardise its capacity to execute its strategy and achieve the targeted returns. Recent developments By embedding the HEINEKEN Leadership Expectations in our people processes, we continue to grow leaders who are focused on developing the business, their teams and themselves and who are true role models. We pay special attention to how we build talent and leadership capability in emerging market regions like Asia and Africa alongside further evolving our approach to attracting great external talent through our refreshed employer brand campaign, Go Places! What we are doing to manage this risk The development of quality People Plans in our Operating Companies and Functions is focused on leadership, talent, functional competencies and critical capabilities, and inclusion and diversity across the organisation. We continue to focus our efforts on digital, end-to-end management and revenue management. We also ensure that we have robust talent identification and development programmes in place, alongside the critical leadership development interventions that are required to lead in a competitive, complex and increasingly digital world. Explore Further: - Engage and develop our people, pages 19-20. - Values and behaviours, pages 142-143. Heineken N.V. Annual Report 2018129 Financial Statements Sustainability Review Other Information What could happen Consolidation of the alcoholic beverage industry may affect existing market dynamics 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 we are 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 higher growth 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, pages 9-15. - Drive end2end performance, page 16. - Main changes in consolidation, page 32. What could happen HEINEKEN is committed to providing a safe workplace for all employees and contractors. Despite the controls in place, incidents and accidents may happen in the brewery, our supply chain and along the route-to-market, leading to physical injuries or fatalities to employees, contractors or members of the public. Recent developments Given our growing presence in emerging markets, safety is an ongoing challenge and a permanent focus area. 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 priority of its Brewing a Better World programme. The global safety programme aims to enhance 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. Extra focus is placed on high risk operating companies and activities for which special programmes are developed. Explore Further: - Promoting Health and Safety, pages 120, 138-139.

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2018 | | pagina 30