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“Consumers aren’t as loyal as they used to be”

Heineken, the second‑largest brewer in Switzerland after Carlsberg, is diversifying its range with the launch of new beers.
Bart de Keninck, Managing Director of Heineken Switzerland, spoke with Swissquote Magazine.

At the helm of Heineken Switzerland since August 2018, Belgian‑born Bart de Keninck is obviously a beer lover. “It’s a fantastic, natural product,” says the 39‑year old chief. But consumer habits are changing. So the Dutch brewer must bring its 700 employees, two breweries – in Chur and in Lucerne – and some 15 brands distributed in Switzerland in line with the times. As Heineken increases the number of its beers on the market, promotes local brands and launches non‑alcoholic beers, de Keninck unveils his strategy for Switzerland with ardent enthusiasm. Find out more in this interview.

Beer consumption in Switzerland has risen slightly in recent years. Why do you think the market is doing so well?

Switzerland is following the same trend as other mature markets. Consumption is stagnant or increasing slightly, while in Asia and Africa it is rising fast. The growth in Switzerland in the past three or four years is due to two reasons. First, the population continues to grow, which naturally increases sales. And second, beer is increasingly popular with consumers and is gaining market share over wine and spirits.

This growth is also driven by microbreweries, which are popping up everywhere. What is your response to this competition?

Over the past 10 years, the number of breweries has shot up in Switzerland – there are now more than 1,000. But we should bear in mind that 99% of the beer consumed is produced by the 51 largest brewers. The rest divvy up the remaining one per cent. Microbreweries are not a threat to us. I’d actually say just the opposite! These days, consumers want diversity and a wealth of options. They want to explore new tastes and are no longer as loyal to a single brand as they used to be. Microbreweries have met that demand by diversifying supply for consumers. And that has pushed us to be innovative. For example, we launched Heineken 0.0 last year and Calanda Tandem this year. The takeaway is that more and more people are turning to beer, and all players – big and small – are benefiting from that.

But people want to consume more “local” and “craft” beer. Isn’t that a threat for a multinational like yours?

Of course, we’re well known for our international brands such as Heineken and Desperados. But Heineken group sells more than 300 local beers worldwide, including five in Switzerland (Calanda, Eichhof, Haldengut, Ittinger and Ziegelhof), so we’re already strongly positioned in the segment.

Consumption of traditional lagers, like Heineken, is declining. Will that type of beer soon be sidelined?

No. Consumption is definitely down, but lagers are still the biggest sellers. However, it’s true that growth is coming from other types of beer. Our customers want less bitter, easier‑on‑the‑palate products, such as Desperados and Calanda Radler. They also want to drink “better”. In other words, they want more premium, more complex beers that are richer in taste, whether it’s an international beer like Birra Moretti or a local one like Ittinger. Also, nowadays people want to drink more moderately.

That’s why you launched Heineken 0.0 in Switzerland in 2018...

The market for non‑alcoholic beer remains small, especially in Switzerland, where it accounts for 3% to 4% of volumes sold, as opposed to 10% in Spain. But we really believe in the potential of alcohol‑free products. Demand has been around for a long time and is rising. In Switzerland, we currently market four non‑alcoholic or low‑alcohol beers (Calanda, Eichhof, Erdinger and Heineken 0.0), and their sales are growing. Over the next few years, we will add new products to the range, which will probably be nonalcoholic versions of our Swiss beers.

If demand has been around for a long time, why did Heineken come on board so late compared with the competition?

The technology wasn’t ready. Until just a few years ago, it was still impossible to produce beers that were truly alcohol free. Some alcohol always remained, and that made things a bit hazy for consumers. Can someone who must completely abstain from drinking have a beer that contains 0.5% alcohol? Today, innovation has enabled us to produce Heineken 0.0 and Calanda Radler 0.0, which contain no trace of ethanol. It’s much clearer for consumers. For a long time, the process of removing alcohol, or dealcoholisation, also removed the bitter taste and all the flavour from beer. Lots of customers were disappointed with the products. But now we can preserve the original taste. The quality of non‑alcoholic beer has finally caught up to the market.

Won’t non‑alcoholic beers compete with your traditional products?

That’s not at all what we’ve observed. Customers who buy our 0.0 products are mainly beer drinkers who prefer to abstain from consuming alcohol in certain situations, such as before driving or at lunch. Instead of competing with our own brands, nonalcoholic beer expands the market, because people drink it when they normally wouldn’t have beer.

Apart from selling non‑alcoholic beer, what are you doing about problems caused by alcohol?

That’s a key issue for us. Beer is a wonderful product, but it must be consumed wisely. To prevent the harmful consequences of excessive consumption, 10% of our media spend on the Heineken brand goes to promote moderation. In 2017, we launched the “When You Drive, Never Drink” campaign. We also support the organisation Nez Rouge, which provides safe driving services, in Lucerne and Chur.

 
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