Don John, the man who made Restrepo
one of the big companies in Colombia.
ment there is a local premium brand
as well as several imported beers,
including Heineken. Price is impor
tant in Colombia. We don't want too
big a price difference between
Heineken and the local premium
beer. The other main task for the
years ahead is to do much more to
raise the visibility of the brand. The
emphasis is on the on-premise, as
that is the showcase for your brand."
Distributor Restrepo is also in
vesting in the future of the Heineken
brand and will soon be appointing
special Heineken coordinators to deal
exclusively with sales of Heineken
Beer. This distributor is one of the big
companies in Colombia and is
headed by Don John, a man who
once started as a sales representative
for a biscuit factory but now handles
the distribution of a highly diverse
range of products. "Restrepo is a pro
fessional organisation with branches
throughout Colombia and, because
of that excellent distribution net
work, it is a first-rate partner for
Heineken", explains Mr Strijp.
Though expectations for
Heineken in Colombia are not specta
cular, they are generally positive.
Partly that is due to the size of the
beer market, but it is also attributa
ble to favourable economic signals.
"The economy is stable if you compa
re it to that of the surrounding coun
tries and that always provides a bet
ter basis for growth opportunities. In
Ecuador the local currency fell sharp
ly in value a couple of months ago
and that, of course, has a considera
ble negative impact on your margin."
Peru, another country that Mr
Strijp is focusing on, is more or less
in between Ecuador and Colombia in
terms of economic development and
the size of its beer market. "In Peru
we are faced with high import duties
and so we have to make do with a
lower margin. Heineken is sold there
by what was originally a pharma
ceuticals business, Quimica Suiza,
which has appointed a marketing
manager, two supervisors and four
representatives specifically to work
on Heineken."
VISIBILITY
Ilco Schuringa agrees that much
work is needed to boost the visibility
of the Heineken brand. Not only in
Colombia but also throughout South
America. But he realises that enor
mous investments will be required to
obtain any sort of coverage for the
brand in this vast continent. There is
a threat of a vicious circle: too little
distribution and therefore too little
visibility, which in turn will impact
on distribution. "If you have no vol
ume basis, you cannot really do
much with a brand. For an imported
beer like Heineken you have to create
market 'pull' to gain a presence in
important channels like supermar
kets and the millions of street-corner
kiosks. You create that pull by adap
ting your price in line with local cir
cumstances."
"Given the economic conditions
and the import barriers it's unlikely
that we can build up a strong posi
tion in South America via traditional
exports. One exception may possibly
be Uruguay, which has a free trade
zone. Over the short and medium
term Heineken Export certainly has a
lot of work to do. By strengthening
the distribution we can have a better
position. We must exploit the
strength of Heineken Export so that
ultimately, over the long term, we
can secure a position for the
Heineken brand whilst maintaining
the right image."
South America, therefore, is still relatively unexplored territory for Heineken. But
hard work is being done to change this. In April this year the new office of the
Heineken Cluster Latin America was officially opened in Rio de Janeiro by Executive
Board member Thony Ruys. "Lots of things will be happening this year. In Brazil
alone we've taken on a 65-strong sales force to give Heineken greater market visi
bility. Besides, fourteen Heineken expats will be working on the spot to strenghten
our presence in the Latin American region", says Lex Kiljan van Heuven, who heads
up the operation in South America. In a future issue of The World of Heineken we'll
be taking a closer look at the opening of the new office and at the chances that
Heineken has in this continent with its enormous beer markets, like those in
Argentina and Brazil.