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strengthen their super-premium segment, for instance by
adding Heineken and the Mexican brand Corona. According
to John Kennedy, Heineken and Corona can source very dif
ferent mainstream drinkers. "Canadian beers, just like
American beers, are Tight' in taste and Corona has that
same character. So if you are a mainsteam light beer drin
ker looking to trade up to an Import, Corona is a strong
choice. However, if you are a real beer enthusiast and enjoy
the taste of 'real' beer, Heineken being a European beer
with a much stronger taste, is the perfect choice. In Canada,
both Heineken and Corona have a 'premium' import status,
so the taste profile becomes an important variable when
the mainstream consumer looks to 'trade up' to a super-
premium import".
PRICE
The transition to a big portfolio of brands means a 'real
challenge' for the Molson sales reps, says Jean Novak, Sales
Director Molson with responsibility for Montreal. "We want
to win in every category of the beer market, which means
in the discount, premium and super-premium segment. To
win in each category, we will have to focus on two or three
brands in every segment. And in the super-premium seg
ment, Heineken is definitely one of the main brands we
focus on." That segment grew in one year's time from 4 to
8% of the total beer market in Quebec. Although the super-
premium imported beers are less profitable for Molson than
the locally brewed domestic beers, it is still an important
piece of business for Molson. Heineken Beer is usually 25 to
30% dearer than the local beers. That is the price differen
ce that John Kennedy is aiming for, but in Quebec with their
wide-open American type retail environment it can be diffi
cult to control. "Hardly any price discounting takes place,
but the reality is that we do not have control over the final
consumer price, the retailers do. A six-pack of Heineken
normally retails for 9.49 Canadian dollars. If a shopkeeper
wants to sell it for six dollars, then theoretically he can."
According to Jean Novak the difference compared to premi
um beers is not insurmountable: "The price difference is
not difficult for the sales reps to sell. Firstly, because the dif
ference for the Canadian consumer is not so big and,
secondly, there is of course the Heineken image, which jus
tifies a higher price for the consumer."
Molson Montreal has fifteen sales reps. Two of them
concentrate specifically on the on premise outlets in the
downtown area. These are the high volume accounts like
Casey's and Eastside Mario's, two restaurant/bar chains
which work according to a fixed formula. Casey's has six
outlets in Montreal. Eastside Mario's has twelve. In volume
terms the biggest on premise account is the Peel Pub in the
centre of Montreal. This bar, which is frequented by many
young adults, sells some six thousand kegs of Molson beers
per year. Jean Marc Ritchie is the man who handles these on
premise key accounts. He sees his work as having two sides
to it. "You negotiate with the head office of such a chain
and strike deals with them. But what's important are the
contacts with the actual outlets if you want to build sup
port for your brands and organise promotions." Jean Marc
Ritchie never has problems finding takers for a brand like
Heineken. "Heineken is an important brand for a chain like
Casey's, it's their most popular imported beer. They also
feel that we always offer them attractive prices. So they
want to stock Heineken, but in return there must be a
customised promotion. In other words, a promotion that
has been specially developed just for them."
SPRING THAW
Every week during the summer some ten to fifteen contai
ners of Heineken Beer arrive at the special Heineken ware
house in Boucherville, just outside Montreal. The storage
space for Heineken is part of a bigger Molson warehouse
but is fenced off from the rest of the premises. Normally
speaking, all imported beer in Canada must first be stored
in a government-operated warehouse, but in this case the
authorities have given permission to create a separate
warehouse that serves as a bonded warehouse for
Heineken.
Every container that arrives is filled to the roof with
cases of Heineken. And each case of beer has to be placed
by hand onto a pallet for further shipment to one of the 39
Molson warehouses in the Quebec Province. But there is
one exception to this rule. In April comparatively few con
tainers arrive and the warehouse is quite full - containing
some 75,000 cases of Heineken. That is not a buffer stock
for the busy summer months, but is due to the Canadian cli
mate. Spring Thaw is the name of this natural occurrence.
In April, after a long, severe winter, the frost finally starts
to disappear from the ground and that means an extra-
heavy burden for Canadian roads. To minimise the damage
to roads as much as possible, containers are only allowed to
carry a limited load. To make sure that half-filled (and the
refore unprofitable) shipping containers are not despatched
Yves Turcotte, Heineken brand manager for duebet, John Kennedy and
Pat Reilly of the warehouse in Boucheville, just outside Montreal.
