0
33
Risk Management
Product safety and integrity
What could happen?
Recent developments
What are we doing to manage this risk?
Supply chain continuity
What could happen?
Recent developments
What are we doing to manage this risk?
Increased scrutiny and expectations of
society on multinationals
What could happen?
Recent developments
What are we doing to manage this risk?
Distribution channel transformation
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
Poor quality or contamination of HEINEKEN products, be
it accidental or malicious, could result in health hazards,
reputational damage, financial liabilities, disruption of the
supply chain and product recalls.
Changes to our product portfolio, the business environment
(such as increased knowledge of hazards associated with
potential food contaminants previously unheard of),
growing consumers' concern on food safety and a more
complex legal environment in certain jurisdictions, makes
control of food safety more challenging.
HEINEKEN has established a comprehensive Company-
wide Quality Assurance programme covering employee
competences, production standards, recipe governance,
suppliers' governance and production material risks.
Continuous improvement is achieved through global
compliance monitoring and systematic gap-closing.
HEINEKEN anticipates new legislation and emerging risks
aided by our partners, suppliers and external scientific
institutions and assures implementation of measures to
avoid such risks. Should a risk materialise, global recall and
crisis procedures are in place to mitigate the impact.
Disruptions to the supply chain could lead to inability to
deliver products to key customers, revenue loss, brand
damage and loss of market share.
Significant changes in the availability or price of raw
materials, commodities, energy and water may result in a
shortage of those resources or increased costs.
The COVID-19 crisis has led to significant disruptions in our
supply chain (e.g. brewery closures by governments).
Availability of natural and other resources is limited and
may be largely impacted by various effects such as political
instability, climate change and water scarcity (and its effects
on crop yield and grain prices and availability).
Markets and governments are required to take action to
adapt and respond to these changes and thus, prevent,
interruption of production, significant losses of revenues
and increased costs for business.
HEINEKEN has been able to mitigate the impact of
COVID-19 disruptions by using its global footprint, both
across geographies and categories.
Business continuity plans have been developed for
HEINEKEN's key brands in all key markets and back-up
plans are in place in operating companies.
Business resilience is further strengthened through
ownership of several strategic malteries, long-term
procurement contracts, water management plans and
central management of global insurance policies.
Taking a long-term approach, HEINEKEN has a strategy that
is focused on watershed health to protect water resources.
Sustainable sourcing is another priority in its Brewing a
Better World sustainable development programme.
Explore Further:
Every Drop-Protecting water re sources, page s 127-130
Drop the C-Reducing CO2 emissions, pages 131-136
Sourcing sustainably, pages 137-139
Public and employee scrutiny on HEINEKEN when not
conforming to society's expectations in mitigating our
potential negative impacts on the world and maximise our
positive contribution can lead to significant reputational
damage to the Company or to the brands
Stakeholder expectations, including those of employees,
are rising towards companies ESG strategies and actual
performance. Situations in which companies are openly
scrutinised in case of mall performing are on the rise.
Companies face growing pressure to increase the positive
contribution they make, including measures to address
climate change and other sustainability risks, and to
share consistent and transparent information that allows
stakeholders to assess their sustainability performance and
benchmark them versus peers in their industry.
HEINEKEN has set clear strategies (e.g. our global Every
Drop and Drop the C programmes and regional plastic
strategies) and is committed to (benchmarked) targets to
address the growing needs and expectations.
ESG performance is disclosed in a combined annual report,
in our website and via social media channels. To make
sure we respond adequately and in a timely manner to
increasing societal expectations, HEINEKEN monitors
trends and developments in the ESG agenda across the
globe. HEINEKEN also continuously performs company
reputation research, actively listens to social media
and works closely with external experts, such as NGOs,
universities and governmental organisations
Explore Further:
Our impact from Barley to Bar, page 07
Striving to have a positive impact, page 125
Every Drop-Protecting water resources, pages 127-130
Drop the C-Reducing CO2 emissions, pages 131-136
Reporting basis and governance of non-financial
indicators, pages 151-159
In order to maintain position and profitability, our
customers are consolidating, either through acquisition
or through buying alliances. This concentrates increased
buying power into fewer hands. Next to this, digital
disruption is creating new routes to customers and
consumersincreasing the value and power of owning
customer and consumer data.
New buying alliances are being negotiated and cross-border
acquisitions continue. The major online retailers are moving
to an omni-channel strategy, owning on- and off-line
retail. The race to win the customer and consumer through
digital platforms is on. Electronic point of s ales systems
are increasingly used to collect and leverage customer and
consumer data.
HEINEKEN will continue to invest strongly in building
brands, understanding that the importance of strong brands
only increases in the face of retail disruption.
We are implementing a comprehensive set of commercial
digital initiatives to optimise our current business, build
digital customer business and develop new business models
to fulfil unmet needs and build new routes to market.
Explore Further:
Deliver top line growth, pages 10-15
