The brewer is looking to acquire rivals to boost its flagship Heineken lager. The company’s chief operating officer, Marc Bolland, said the company would like to grow its presence “all over the world” through acquisitions in the Netherlands and abroad, as well as organic growth. Heineken faces the same challenge as brewers in other parts of the world, including Western Europe and the United States, where both alcoholic and non-alcoholic beverages are growing. Heineken has lagged behind larger rivals InBev, SABMiller and Molson Coors in mergers and acquisitions, which have helped them grow significantly. Analysts say that could cause Heineken to lose market share. The company recently ordered regional managers to make faster acquisition decisions. One of its targets is Molson Coors’ Cervejarias Kaiser in Brazil. Heineken is also considering acquisitions in China.

At the same time, Bolland says, Heineken's success does not depend solely on catching up with its competitors in sales volume. Nor does it aim to become the world's largest brewer. "The secret is not in sales volume," says Bolland. The Dutch company, which itself is difficult to acquire because it remains a family business, is planning to grow by improving its marketing and sales methods for its flagship brand, Heineken, which accounts for 20% of total sales. The Amstel brand accounts for 10% of sales, and regional brands account for the remaining 70%.

According to Heineken's chief commercial officer Peter van Kampen, the company is currently considered "too exclusive" in several markets. If the company hopes to grow faster than it does today, it needs to be more "accessible" without allowing its brand value to erode. Over the past year and a half, Heineken has made a record number of acquisitions in Russia, spending around $1.2 billion to buy up seven breweries. This has brought it very close to SUN Interbrew, the Russian subsidiary of InBev, which ranks second in the country after the Scandinavian holding BBH.

One of the company's new marketing moves to attract young beer consumers is the restoration of warehouses in Valencia. As part of the Greenspace project, warehouses are being transformed into clubs of sorts, where cultural events are held and where beer is also offered. In order to attract young people, Heineken is also planning to start selling a new brand of low-alcohol beer, Heineken Light, early next year. (FT, 30.10.2005, Kirill Koryukin)

Heineken bets on takeovers