WINNING IN PREMIUM. by integrating Marketing and Sales. Jan Derck van Karnebeek. Chief Commercial Officer. What s Brewing Seminar, August 27, 2015

Transcription

1 WINNING IN PREMIUM by integrating Marketing and Sales Jan Derck van Karnebeek Chief Commercial Officer What s Brewing Seminar, August 27, 2015

2 Jan Derck van Karnebeek 2015 Chief Commercial Officer 2013 Regional President Central and Eastern Europe and Chief Sales Officer 2011 Regional President Central and Eastern Europe 1991 Started with HEINEKEN, various senior commercial and general management positions across different OpCos 1

3 Advantage of focusing on Premium At a more attractive price point....and growing across all regions PS* CAGR 2.8% PS* CAGR >=150 Superpremium AFRICA & ME 4.3% >= Premium AFRICA & ME ASIA PACIFIC ASIA PACIFIC 4.3% >= Mainstream LATAM LATAM 5.2% <90 Discount NORTH AMERICA Europe NORTH AMERICA Europe 2.8% 0.5% Price Index 2014** 2020F 2 Source: Canadean, **based on 2014 estimates. *PS Premium Segment. Premium Beer (Lager) >= 115 price index

4 HEINEKEN has a proven Track Record in Premium The most premium Brewer in the world The Brewer with the fastest growth in premium % share of PS of total company volume PS volume growth CAGR % 4.6% 4.1% 36% 24% 17% 14% HEINEKEN Competitor A Competitor B Competitor C -0.6% HEINEKEN Competitor B Competitor C Competitor A Premium Other 3 Source: Canadean as at , Premium Beer >= 115 price index

5 HEINEKEN has the optimal footprint to maximise the premium opportunity Strong presence in key Premium markets HEINEKEN s broad footprint Top 10 PS markets: #1 or #2 in Premium in 5 markets Within Top 3 in 8 markets Strong Route to Market in all key markets Operating Companies Joint Ventures/ Associates Export Licences 70+ COUNTRIES 160+ BREWERIES 4 Source: Canadean

6 A Winning Premium Brand Portfolio Heineken the leading international Brand Global Premium specialty Beer & Cider Regional Premium powerbrands Local Brands: Premium extensions Heineken In +160 markets Desperados Sold in 86 markets Tiger #5 largest Brand by The only truly 5-year CAGR 15% volume at 5.8Mhl (2014) international premium Brand 20-year CAGR c. 5% In 2014/2015 expanded in 21 new markets Key driver of Asia Pacific volume growth Sold in 50 markets Birra Moretti Le Regionali Price index 187 vs. core Brand Dos Equis #2 Brand by volume in US portfolio 5 distinctive International Cider Brands, covering full 4-year CAGR of 16% (US) Price index 147 vs. Mainstream (US) Zywiec Variants Price index 117 vs. core Brand range of premium segments 5 Source: Canadean

7 Agenda: The HEINEKEN Journey Winning in Premium by integrating Marketing and Sales Past Today Future Developing world-class Marketing and Sales functions One Commercial function integrating Marketing and Sales Integrated Commercial function to scale the Premium opportunity 6

9 Development of a stronger Marketing function Driving powerful marketers and enhancing Brand equity World class Marketing capabilities driving strong Brand Assets Rapid evolution into digital leading edge Global Creative Leadership formally acknowledged DIGITAL Brand Building Framework as a global way of building Brands 6,400 training sessions delivered Digital media investments more than doubled since 2012 Significant increase in investments with key global partners (Facebook, Google, Twitter, Instagram) 2015: Cannes Lions Creative Marketer of the Year award 41 Lions awards across 7 markets over 3-year period 8

10 Development of a stronger Sales function Driving excellence in execution leveraging extensive scale Executing consistent, repeatable processes globally World-class strategic partnerships based on local strenghts Global Sales Capabilities setting industry standards Common language and principles applied across: 23,000-strong Sales Force 70+ markets 1,000,000 outlets From Europe to global coverage HEINEKEN rated above industry average by 80% & PEOPLE 10 Sales Capability programs Sales support systems rolled out globally Global Sales Resource Committee 9

11 Separate functions delivered premium results Marketing: Stronger Brands + Sales: Excellent Execution Heineken Growth Premium segment leadership with 7.6% share in 2014 Equity score vs. leading premium competitor in 70% of Top Markets Disproportionate growth in 2014, +5% vs. last year Establishing Cider Significant expansion into New Markets beyond Traditional Cider countries Identification of key Must-Win Markets Portfolio of 5 distinctive International Cider Brands Accelerated Innovations Innovation rate step up from 3% in 2010 to 7.7% in 2014 Contribution to Group top line 1.5bn in 2014 Targeted innovation strategy 10 Source: Heineken Canadean Forecast, HEINEKEN internal volume, year-to-date May 2015; Top Markets defined as Top 30 markets by volume, Nielsen Modern Trade year-to-date August 2014 for innovation

12 Heineken Brand: clear leadership in PS Strengthening Global Leadership Heineken largest Brand in PS Heineken share of business *** Brand equity ** Stella Artois Carlsberg Dos Equis Tiger Budweiser Corona Heineken 14% 6.0 0% 5% 10% *PS share Beer Volume Revenue Operating Profit (beia) 11 Source: *Canadean * * ONEquity 2013: Brand equity score is based on average score on most recent quarter for all markets available on ONEquity: Respondents are asked to rate brands on a 1-10 scale, where 1 means 'poor' and 10 means 'outstanding ** * Based on 2014 consolidated financial results and group beer volume

13 Established the Cider category Capturing new Consumers through Cider 26%* 51%* Shaped Portfolio and Innovation Established Cider Shaped Key Markets 5 strong distinctive Brands Maximise OpCo Profitability Focus on Traditional Cider markets and expansion to New markets COGS 12 * % of consumers drinking alcohol, that do not drink lager

14 Innovation a key competitive advantage A sustainable contibutor to Top Line Growth Innovation rate * New pack types Brand extensions 7.7% 2020 Target: 6% 5.3% 5.9% 3.0% 4.1% Innovation revenue 40% CAGR 1.5bn Radler and alcohol free propositions Improving draught offer 0.4bn * From 1 January 2013, the innovation rate is calculated as revenues generated from innovation introduced in the past 40 quarters for a new category, 20 quarters for a new brand and 12 quarters for all other innovations, excluding packaging renovations divided by total revenue

16 From three separate World-Class Functions MARKETING TRADE MARKETING SALES Developing strong Brands with high preference in Consumers Consideration Sets Developing tools and capabilities to make Brands relevant at the Point of Sale: Picture of Success Developing world-class capability to win at the Point of Sale with Excellent Outlet Execution

17 to integrated functions mirroring Shopper Journey THE SHOPPER JOURNEY MY PREFERRED BRAND WITH THE RIGHT ASSORTMENT AVAILABLE WHERE I NEED IT THE JOURNEY MARKETING Build Brands with highest preference TRADE MARKETING Create outlet-based Picture of Success SALES Consistently execute with Excellent Outlet Execution Premium Focus 16

19 Taking the Premium Opportunity to the next Level Strengthen Heineken global leadership Reaching consumers beer can t with Cider Keep world-class pace with Innovation Accelerate market share in emerging markets Innovate in established markets Localised Jobs To Be Done Leverage unique platforms Shape the key markets Develop portfolio and innovation Integrate Cider into brewery network and Beer Route to Market Educational - build the category through product story Capture growth in the Low/No Alcohol category Satisfy the need for Variety and Craft Lead in Draught Systems development 18

20 Heineken leading in equity and preference against Premium competitors Equity Stronger or equal in 21 of our Top 30 Markets Preference Stronger or equal in 18 of our Top 30 Markets Stronger Parity Weaker Stronger Parity Weaker 19 Source: ONEquity Latest Moving Annual Total vs. Leading Premium Brand

21 Converting Heineken Preference to Market Share is a Growth Opportunity Correlation between Preference and Market Share per country 35 Preference Premium conversion Stronger Parity Weaker MARKET SHARE 20 Source: ONEquity 2014 Moving Annual Total Preference/Canadean 2014 Market Share

22 Strengthening Heineken global leadership with the right Focus by Geography Where the Brand is well established: (>5% Market share) Convert equity into broader penetration in emerging economies Drive innovation & renovation in developed economies Where the Brand is new & small: (<5% Market Share) Build Brand equity 21

23 Fully Leverage Heineken Competitive Advantages Integrated global programs based on our unique Brand Platforms High profile sponsorships to build premium Brand equity Complemented by relevant local topspins Occasion-based activations at the Moment of Truth Enjoy Heineken Responsibly program SPONSORSHIP 22

24 Maximizing the Cider Opportunity... Fastest growing category Sustained Innovation CAGR % CAGR % 2% 1% 3% 2% Beer Cider Wine Beer Cider Wine Focus on Quality Designed for Relevance MOST AWARDED CIDER 23 Source: Canadean October 2014

25 ...and leveraging Scale and System Strength We have made Cider more accessible Cider Consumer price...and still more attractive than beer Revenue/hl with more cost effective use of our breweries Cider COGS COGS Beer Cider 24

26 Strengthening and expanding our leadership in Innovation Accelerating the clock speed of Innovation to tap into new sources of growth Seizing the low/no alcohol opportunity Satisfying the need for Craft & Variety Leading in Draught Systems Maximising absorption capacity through global-local collaboration 25

27 Innovation: addressing Moderation Consumer Opportunity Business Opportunity Growth Drivers Increasing moderation theme Consumer pull for adult refreshing alternative to Carbonated Soft Drinks Demand for natural authentic product Potential for new consumers beyond traditional beer drinkers No longer a niche opportunity Average rev/hl for low/no alcohol significantly higher than beer average Existing breweries can be used to produce low/no alcohol product Limited additional CAPEX needs Best tasting products A portfolio approach: Brand, pack type and price to serve the right Point of Sale Striking the balance between functional and emotional benefit in communication 26

28 Birra Moretti Radler Video 27

29 Strategic Programs to Maximise Growth Digital Transformation Excellent Outlet Execution Creative Leadership Use creative technology to unlock shopper opportunities throughout the Path to Purchase Implement perfect execution of the in-outlet programs Take the lead in shaping the creative norms to create impact and drive leadership TO MAXIMISE OUR SHARE IN PREMIUM 28

30 HEINEKEN leading edge in digital transformation Serving consumers and shoppers throughout their journey Consumer Customer Reaching the right consumers, with the right content, in the right context Supporting shoppers and partnering customers to take the shopping experience to the next level Doubling Media spend on digital by Billion via E-Business by 2020 Storytelling Precision Marketing Internet of Things Indirect B2C Direct B2C B2B Supported by DIGITAL PARTNERS to step up digital strategy 29

31 Excellent Outlet Execution A global framework to win at the Moment of Truth, everyday, everywhere Based on 8 Execution Principles 1. Leadership 2. Alignment % data 4. Focus & Simplicity 5. Sell Out 6. Step by Step 7. Empowerment Full Coverage for Impact 23,000-strong Sales Force aligned under one program Rolled out globally across all markets Covering Traditional, On, Modern and Wholesale trade channels 8. Accountability 30

32 Creative Leadership to win the battle for attention Making an Impact, Holding Attention, Closing the Purchase The Creative Ladder The Four Creative Principles The Creative Council The Marketer of the Year Step change the creative ambition of strategic Brands Embed creative principles in the company culture Trigger debate to raise the bar on creativity Leverage recognition to attract talent 31

33 Setting the standard in Brand Building Innovative Aspirational Responsible MINI JAMES BOND THE HERO 32

34 WINNING IN PREMIUM Summary HEINEKEN ideally placed to maximise the Premium opportunity, with strong proven track record and broad Premium Brand Portfolio Separation of Marketing and Sales through strengthened the functions and delivered results 2015 the right time to integrate Marketing and Sales units as one Commercial function. This will enable HEINEKEN to take the Premium opportunity to the next level, thereby: Extending the Premium Brand Portfolio, led by Heineken Fully capturing the Cider opportunity Maximising innovation opportunities Utilising key digital, outlet execution, and creative strengths to further drive Brand Equity 33

35 Q&A WINNING IN PREMIUM by integrating Marketing and Sales Jan Derck van Karnebeek What s Brewing Seminar, August 27, 2015