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Risk Management
Changing consumer preferences
What could happen?
Recent developments
What are we doing to manage this risk?
Leadership, talent and capabilities
What could happen?
Recent developments
What are we doing to manage this risk?
Industry consolidation
What could happen?
Recent developments
What are we doing to manage this risk?
Health and Safety
What could happen?
Recent developments
What are we doing to manage this risk?
Heineken N.V.
Annual Report 2020
Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Consumers' preferences and behaviours are evolving,
shaping an increasingly complex and fragmented beer and
broader beverages 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.
The popularity of craft beer and the rise of low- and no-
alcohol products have been the most noticeable changes in
consumer tastes in recent years.
In particular, there is an increased consumer focus on
health and well-being resulting in a growing interest in low-
alcohol, low-calorie and low-carb propositions. The seltzer
category has also grown significantly, representing both risk
and opportunity.
HEINEKEN has fully embraced these recent developments,
with a focused craft and variety strategy as well as
increasing investment in the zero alcohol category, beyond
Heineken®.
We are increasing our portfolio, launching Zero Zones
and have multiple propositions in flavoured drinks
(including cider and seltzers). While expanding into
adjacent categories, we focus on natural credentials
similar to brewing and maintain a focus on adult and
refreshing products.
Explore Further:
Deliver top line growth, pages 10-15
Advocating responsible consumption, pages 140-143
HEINEKEN relies on the skills and capabilities of its
people to deliver its strategic ambitions. If HEINEKEN
is not successful in attracting, developing and retaining
diverse and talented people and leaders with the required
capabilities, it may jeopardise its capacity to execute its
strategy and achieve the targeted returns.
We accelerated the launch of our global learning experience
platform to enable continuous development and support all
employees to develop the skills, knowledge and mind-set to
succeed in a digital age.
Across our global functions and operating companies, there
is a strong focus on inclusion with many different initiatives
globally, regionally and locally.
We focus on striking the right balance between building
internal capabilities/upskilling our employees and external
talent acquisition.
We continue to grow leaders who are focused on developing
the business, their teams and themselves and we will
update our Leadership Expectations so our leaders embrace
changes required to deliver our strategy and bring these to
life in their teams.
Capability building is key. We will revamp our capability
building approach to further support the business
via identifying and developing companywide critical
capabilities and harmonizing our capability framework
across the organisation.
We will refresh our Talent Management philosophy to be
more leader-led. This includes a targeted approach in talent
acquisition amongst key talent groups. Our Inclusion and
Diversity strategy will be updated to include transparent
ambitions and metrics.
Explore Further:
Engage and develop our people, pages 20-21
Values and behaviours, page 148
Inclusion and diversity, page 149
Consolidation in 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.
Despite recent market consolidation, beer remains a
very local industry with respective country shares more
relevant than global share. Further impact could come from
consolidation on the customer side.
HEINEKEN is constantly working to improve its cost
efficiency while rolling out a 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 to reach an optimal balance of higher growth
developing markets and more stable developed markets and
to build an extensive and complementary brand portfolio,
alongside its flagship Heineken® brand.
HEINEKEN is actively cooperating with local craft brewers,
participating in capital and sharing knowledge to keep
the beer category attractive and relevant for consumers.
To continue winning on the customer side, HEINEKEN
explores and implements news ways of working and new
channels, including digital/e-commerce platforms.
Explore Further:
Deliver top line growth, pages 10-15
Drive end2end performance, page 16
HEINEKEN aims to provide a safe workplace for all
employees and contractors. Despite the controls in place,
HEINEKEN employees, contractors and visitors may be
impacted by uncontrolled events in the brewery, supply
chain, in the route-to-market or in our offices, which could
lead to illness, serious injuries or fatalities.
Despite our continuous efforts to provide safe working
conditions, several fatal accidents have occurred,
underlining the importance of realising further
improvements in the area of safety.
Since its outbreak in the first quarter of 2020, COVID-19 has
evolved into a global pandemic. HEINEKEN set as its first
priority the health and safety of its people.
The lack of quality (emergency) health care in general
remains a challenge in all developing countries for
our national and international employees and their
family members.
HEINEKEN has established 'Put Safety First' as a key
behaviour for employees at all levels. Health and safety is a
priority of its Brewing a Better World programme. Throughout
the entire supply chain, the HEINEKEN Life Saving Rules
target the activities that carry the greatest safety risks to
employees and contractors. Special focus areas with dedicated
support include road safety, contract safety and leadership
and development.
We provide medical care, including HIV and emergency
care. This is continuously being supported and monitored
by Global Health. Operating companies facing epidemics
or other natural disasters receive specific support
when needed.
HEINEKEN has responded in a coordinated manner to the
COVID-19 pandemic. A global crisis coordination structure
was put in place early on. Global measuresguidelines and
policies were set to protect our employees, their family
members and ensure business continuity. These measures
were updated and adapted in response to the evolution of
the pandemic.
Explore Further:
Promoting Health and Safety, pages 144-145
Engage and develop our people, pages 20-21
