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Mendez Co. was founded in
1912 by the brothers Emilio and
Vimense Mendez together with
Salustiano Alvarez and is
completely family owned and
operated. Salustiano Alvarez was
the father of Tito Alvarez, the
present head of the company.
His son Luis Alvarez (pictured
above) is Vice President of the
Liquor Division. The firm ranks
number seven amongst Puerto
Rican businesses and concentra
tes on importing and distribu
ting alcoholic beverages (not
only beer, but also wines, vodka,
rum, etc.) and groceries. Mendez
Co. currently employs some
450 people and is the number
two distributor in its segment.
The nineteen-nineties had only just started when The
World of Heineken published a lengthy article about
Heineken in Puerto Rico and about our agent there, Mendez
Co. Those were difficult times for Mendez Co., as
Heineken's share of the Puerto Rican beer market had been
falling steadily since the mid-1980s. Though the customary
marketing techniques were brought into play to turn the
tide, not one of the actions had the desired effect. In the
end Luis Alvarez, Vice President of Mendez Co., was left
with just one final option: switching from brown to green.
To explain the background, we need to step quite a long
way back in time. Back to the nineteen-sixties, in fact. Two
local breweries then ruled the roost in Puerto Rico, sharing
the market between them. There were a few foreign brands,
but those played no role of significance. Until an American
beer brand arrived and broke open the market. Within a
very short time that brand had built up a rock-solid posi
tion.
Concerned about how things were developing, the
Treasury Department in Puerto Rico decided to take a pro
tectionist measure: all beers on the Puerto Rican market
had to use the same type of brown bottle. For many years
all foreign beers - which meant Heineken as well - were
sold in the brown bottle. That created confusion, as The
World of Heineken editorial team also experienced person
ally in 1991. In fact, when we arrived for our visit the
customs officer absolutely insisted that Heineken was a
locally brewed beer. After all, wasn't it in the same bottle as
the local beers?
VALUE
With the passing of the years, it became clear that
Heineken, as a premium brand and the only European
brand of significance, was suffering because of the brown
bottle. Basically, because the packaging was completely out
of line with the Heineken brand image. "The value for
money perception had changed. Puerto Ricans had started
to travel more widely and in other countries they saw
Heineken in the green bottle everywhere. The same applied
to commercials from the United States. So the consumer felt
that Heineken belonged in the green bottle", says Luis
Alvarez.
Mr Alvarez was 100% convinced of the need to change
over from brown to green. He started negotiations with the
Treasury Department, but they brought no result.
Ultimately, the radical decision was taken. Mendez,
supported by Heineken and the American Miller company,
would take the big step and try to prove in court that it was
right. Mendez had two complaints to lodge with the
Treasury Department: they related to restriction of the com
mercial freedom of speech ("We wanted to communicate
the Heineken brand values through the bottle but that
wasn't possible", says Luis Alvarez) and restriction of
Interstate Commerce.
SETTLEMENT
The case never got as far as the courts. Before even one foot
had been set inside the courtroom the Treasury Department
proposed a settlement. The outcome was that as from mid-
1992 the obligation to use a brown bottle was abolished
and each beer brand could use the bottle type and colour of
its own choice. There was not much time to spend celebra
ting the victory. There was work to be done: the old stocks
