such brands as Beck's and Michelob. But
he views his own brew as the ultimate. "I
make the Rolls-Royce of beer," he says.
"How can I make a super Rolls-Royce? It
doesn't exist. A Rolls is a Rolls; a Heineken
is a Heineken."
The appeal to quality goes back, some
what humorously, to early in the history
of the Heineken family's involvement
with beer. It all began in 1864, when
grandfather Gerard Heineken received an
Amsterdam brewery called the Haystack
as a gift from his mother. In a series of
"Dear Maman" letters, he-had convinced
her that she would see fewer drunks on her
way to church on Sundays if only Dutch
men could be induced to drink beer in
stead of gin. However, he lamented to her,
Dutch beer was very poor. And he saw no
way to correct this sorry situation unless
he personally undertook to make a high-
quality beer.
Grandson Freddy is the last of a disap
pearing speciesthe proprietor. On paper,
he is president and C.E.O. of Heineken NV.
But his influence within the company sur
passes that of any ordinary chief executive:
he owns slightly more than 50% of the
shares.
Fat and friendly letters
"There is magic in a name," Freddy re
flects. "And Heineken is a good name for a
beer, because it sounds German. In some
places, that is an advantage." The name, he
adds, "must be written correctly." Over
the years, he himself has perfected the
famed logo: "If you print Heineken in
block letters, you have 11 harsh and un
friendly vertical lines. I rounded and tilted
the e's so that they now smile. I made the
n's and the k fat and friendly. The impres
sion is one of hospitality."
Heineken rejects the theory that the boss
should avoid becoming entangled in the
day-to-day details of company operations.
He directly supervises R&D, public rela
tions, and finance, and he keeps an eye on
other departments as well. "I must keep
telling the marketing people not to make
the bottle too elaborate with gold foil or
fancy labels," he says. "Otherwise the
housewife will be too intimidated to take
it off the supermarket shelf." He insists on
dignified, soft-sell advertising that em
phasizes only the quality of the product: "I
absolutely hate to be talked down to by an
ad." On any new item bearing the Heine
ken name, whether it be a promotional
sail for a wind surfboard or a newly
designed drinking glass, he personally
passes judgment.
Heineken has devised a management
system that might well receive poor marks
from a business-school professor, because
it mixes staff and line functions. Heine-
ken's principal aides are three managing
directors of equal rank. Each has line re
sponsibility for one major area of the
world. Each is also responsible, however,
for certain staff functions in areas beyond
his own terrain. Rob van de Vijver, for ex
ample, is responsible for the Western
Hemisphere, but Ray van Schaik is in
charge of marketing and advertising, two
extremely important functions in Van de
Vijver's turf.
"Freddy's Three Pigeons"
Isn't this system bound to produce con
flicts? "Sometimes," concedes Van de
Vijver, who recently ran into opposition
from Van Schaik's advertising staff over
how to promote a beer the company will
brew in Canada. The two men sorted it out
between themselves. But Van de Vijver
maintains: "The system generally works
well, because we all know pretty much
how the other feels." And Van Schaik ami
ably refers to the three managing directors
as "Freddy's Three Pigeons," whose feath
ers are rarely ruffled.
The number of managing directors has
been held to three because, says Heineken,
"parties and factions cannot develop
among so few." Among the managing di
rectors Heineken encourages a relaxed at
mosphere in which anyone can say almost
anything to another. Over lunch Freddy
can be given quite a roasting by his irrev
erent colleagues. After receiving a number
of verbal jabs that included a clear hint that
the managing directors would refuse his
request for reincarnation as their boss,
Heineken recently turned to a guest. "And
to think I hired these jokers," he said in
mock despair.
Heineken is given to classifying his peo
ple into two categories: "career dogs" and
"disciples." A career dog is an executive
who sooner or later betrays himself as a
man who plainly places his own success
above the welfare of the company. "I'll get
rid of him if it's the last thing I do," vows
Heineken. He prizes the true disciple as
being as essential to the company's perfor
mance as malt and hops are to the brew.
"A product can lose its reputation almost
overnight," Heineken states. "I can't afford
to have anyone except disciples running
the company and brewing the beer."
The global spread
Though Freddy's system may be highly
personalized and oddly organized, it clear
ly works. Since he took over as president
in 1970, the company's sales have more
than quadrupled to $1.6 billion in 1980.
The net profit, calculated by very conser
vative methods, last year amounted to
$41.8 million. During the first six months
of 1981, sales rose 8% and profits 123%;
the year as a whole should turn out to be
one of the company's best.
In revenue, Heineken ranks fifth in the
world behind Anheuser-Busch, Miller,
Britain's Allied, and Japan's Kir in. In geo
graphical spread, however, Heineken is
unequaled. The beer is imported by some
140 countries throughout Asia, Africa, and
the Western Hemisphere. In addition to its
No. 1 position in the U.S., it also is the
leading import in other highly competi
tive markets, notably Japan, Canada, and
Australia.
With its Dutch breweries producing at
capacity, Heineken also licenses brewers
to produce its beer in 16 countries scat
tered from Norway and Ireland through
the Caribbeanthe Netherlands Antilles,
Martinique, Jamaica, and Trinidad—on to
Singapore and South Korea. In Asia and
West Africa, it works with local breweries
to produce beer under different labels
Gulder beer in Nigeria and Zaire, Primus
in Rwanda and Burundi, Gala in Chad. Al
together, Heineken will produce this year
about 686 million gallons of beer in its
own breweries or those under its super
vision.
In a break with past practice, Heineken
soon will start brewing in North America.
The company will make Amstel, its other
Dutch brand, in a brewery recently pur
chased in the Canadian city of Hamilton,
near Niagara Falls. Some of the output will
be exported to the U.S., possibly as an
Amstel ale.
The beers that Heineken sells under oth
er labels vary in taste and quality. Amstel,
taken over by Heineken in 1968, is brewed
in Holland by its own original formula and
has a heavy consistency and slightly bitter
tang. (A low-calorie version, Amstel Light,
has been imported into the U.S. since the
start of 1980.) Many of the brews in Africa
and Asia taste slightly fruity, a reaction
caused by enzymes released by the yeast.
If there is any secret to Heineken's proc
ess, it is the special strain of yeast known
as Heineken A. Freddy's grandfather, a
doctor of chemistry, engaged a pupil of
Louis Pasteur to isolate a special yeast in
1879. That original yeast cell, which has
now multiplied itself trillions of times
over, is the same one used now. Each
working day, several hundred pounds are
taken from the "yeast house" and air-
shipped throughout the world to the brew
eries owned or operated by Heineken.
The advantage of this yeast is that its
performance is fully known, and therefore
it acts as a constant in the brewing process.
But as Paul van Eerde, Heineken's chief of
R&D, puts it, "Someone could pinch our
yeast and still not be able to brew a Hein
eken." The reason is that Heineken makes
considerable and costly efforts to obtain
the highest quality and pure ingredients.
For example, each truckload of barley is
carefully scrutinized in a Heineken labora
tory before it is accepted, and a small per
centage is often rejected. Malt, one of the
major ingredients in beer, is simply roast
ed barley.
The brewing process is now almost
