A HISTORY OF BREWING EXCELLENCE

Formed in the Netherlands in 1864, HEINEKEN has established itself as the leading international brewer and marketer of premium beer and cider brands. HEINEKEN South Africa (SA) is striving to become the fastest-growing beer and cider company in the country.

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HEINEKEN SA’s Dutch Managing Director, Ruud Van den Eijnden, studied Business Economics at the Erasmus University in Rotterdam, Netherlands, majoring in Logistics and Marketing.

“HEINEKEN’s iconic status appealed to many Dutch students. So, once I finished my studies, I applied for a graduate programme. HEINEKEN Netherlands hired a few graduates from schools and universities, giving one year of various assignments and then you got your first real job,” he explains.

Van den Eijnden worked for the company for seven years and from 2000, he worked for large corporates Unilever, Sara Lee and PepsiCo. In 2007, he returned to HEINEKEN Netherlands as its Sales Director Off Premise and thereafter, he joined HEINEKEN Bulgaria as its Managing Director.

“In 2013, I returned to the Netherlands where I became the Sales Director for Africa Middle East and, as of July 2015, I have been HEINEKEN SA’s Managing Director,” he says.

In terms of key staff, Van den Eijnden is quick to emphasise that everyone is a vital member.
HEINEKEN SA has a diverse management team in place, which comprises seven senior employees. “It’s quite traditional in set-up: finance, supply chain, marketing, sales, HR and corporate affairs,” he says, adding they have a great mix of locals and internationals and praising the multi-cultural talent.

“There are currently four expats on the Management Team, three Dutch, one French, and there are three South Africans,” he says, making special mention of the young and talented, Njabulo Mashigo, the company’s HR Director, who previously served at the JSE, and Nantha Moodley, their Sales Director, who has 27 years of experience in the liquor industry, and who brings a wealth of knowledge and expertise with him.

HEINEKEN SA’s formation and rapid growth

Led by the Heineken® brand, the Group has an impressive portfolio of more than 300 international, regional, local and speciality beers and ciders, employs over 80 000 people globally and operates 167 breweries, malteries, cider plants and other production facilities in more than 70 countries.

Although many of the brands have long delighted South Africans, it was only in December 2015 that HEINEKEN SA officially became an independent entity, taking the decision to dissolve the Brandhouse joint-venture with Diageo and form the new company.

“During the first two years, we were extremely focused on getting people on board, getting the basics right, expanding our portfolio, getting our route to the market right and ensuring our BEE rating and goals are aligned with our development strategy.

“Thus far, it has been very promising. Typically, we don’t share market share, volumes or numbers, but we have seen double-digit growth in a single-digit market, which means we have been getting market share in both beer and cider,” he says proudly.

The South African market has indeed done exceptionally well for the Heineken® brand.

“For the Heineken® beer brand, South Africa is now the fifth biggest country in the world,” Van den Eijnden says.

Product portfolio and craft beers

With its state-of-the-art brewery in Sedibeng, Midvaal, HEINEKEN SA has brewed an exciting portfolio of brands. Van den Eijnden elaborates, “There are our premium brands, Heineken© of course, Windhoek, Miller Genuine Draft and Sol, a Mexican beer. Amstel has been a long-term favourite for South Africans, and just saw the launch of Amstel Radler, the famous Amstel beer mixed with real lemon juice. Soweto Gold has just been launched, born in Ekasi, but brewed for all South Africans. Finally, the Tafel brand appeals to consumers in specific regions in the country. And then there is Strongbow Apple Ciders, a South African game changer and the global number one cider brand.

Craft beer has grown at a rapid rate within the industry and Van den Eijnden says it’s a fantastic opportunity.

“I think it’s good that craft is growing, in addition, it also keeps us on our toes, it helps us to stay modest and humble, and to focus on what we actually put in the bottle,” he adds.

HEINEKEN SA is actively participating in the craft category and has partnered with Stellenbrau, Soweto Gold Craft Brewery and Jack Black, the leader in the craft market, in this endeavour.

The breweries use the HEINEKEN SA distribution systems and they have access to all HEINEKEN SA capabilities, skills and systems, while remaining completely separate from the HEINEKEN SA operation.

“We don’t run those companies. We support them, help them to make sound decisions and to work efficiently.

“They can fully benefit from the HEINEKEN systems and on the consumer-facing side, they can play their own game and differentiate themselves completely from our other brands,” Van den Eijnden explains.

South Africa’s beer market

According to Van den Eijnden, South Africa has the 12th biggest beer market in the world and the second biggest cider market.

When asked about recent developments, he states: “There is much more proliferation in terms of pricing. You have cheap and expensive beers entering the competitive arena. And now, you have fruit-flavoured beers. There is less of a distinction between what a beer is versus what a cider is. The consumer has many choices in that sense, both in terms of price and drink of choice.

“In terms of international brands versus local brands, you see many more international brands gaining a presence, like Heineken®, Sol and Corona, for example. The consumer has more options, which is good news, and one of the ways to keep up with the trends is to continue to innovate, as well as a willingness to discontinue products if they no longer serve their purpose,” he explains.

Future aspirations

It is HEINEKEN SA’s goal to become a sustainable challenger in both beer and cider. Currently, AB InBev (which acquired SAB last year) and Distell have the majority of the shares in beer and cider respectively.

Van den Eijnden says their vision is to be the fastest-growing company in beer and cider in the next three years and, at the same time, to build a sustainable base for the future.

“Our agenda is to keep on accelerating our top-line growth and improve our profitability but most importantly, we want to have a company that is winning with the people and a company that is winning in South Africa. I would like to be seen as a company that is admired and respected by consumers and customers.

“We call it ‘bringing moments of joy’ to all our stakeholders and bringing moments of joy to consumers through the quality of our brands,” he says, adding they would like to excel in customer service and ensure their partners make a decent margin.

A hub of global talent

HEINEKEN SA has a staff complement of almost 900 people and several hundred staff with their dedicated partners, and it’s Van den Eijnden’s goal to build a unified company culture.

“If employees feel as though they’re part of a winning organisation, if they feel respected and valued, they will give their best, and then it becomes so much easier to manage the company because things will happen automatically,” he says.

As the company is still very young, a long corporate memory has not yet been established.

“We need to build a ‘this is how we do things here’ kind of mentality. My dream is that South Africa becomes one of the talent hubs for HEINEKEN globally, so that HEINEKEN SA employees can truly aspire to a global career. Over the past two years, eight of our people were able to enter into a global HEINEKEN career and develop their international skills during their assignments abroad.

“We have hired talent, we’ve discovered talent, we’ve retained talent and, essentially, the HEINEKEN world is open to them,” he says.

He believes HEINEKEN SA attracts talent due to the culture. The company has an entrepreneurial environment, the employees have the freedom to fill a role in the way they feel it should be filled and there is room for creativity and input.

“In general, I don’t think HEINEKEN is a very hierarchical company. Leadership is quite approachable and involved in the daily business,” he says.

The Supply Chain Academy

“One of the key initiatives to attract, develop and retain talent is our newly established Supply Chain Academy,” Van den Eijnden says.

The purpose of the academy is to bring HEINEKEN SA’s various training programmes together into one comprehensive offering, with the goal of ultimately aligning employees’ competencies and skills to the requirements of their role.

“The idea is, everybody in the supply chain organisation receives a clear picture of the company, understands where we see him or her in terms of competencies and skills and how these compare to what we require for the job.

“It also gives us a clear understanding of career ambitions, essentially allowing us to match current competencies versus desired competencies, and then we can design a training plan,” Van den Eijnden explains.

This also ensures that when a promotion opportunity arises, the employee is ready.

“There is quite literally a classroom at the brewery where 10 to 15 types of modules and courses will be offered and it’s not a one-sided approach, it really is based upon individual learning needs,” he says.

These training modules, designed specifically for HEINEKEN SA, fulfil the company’s long-held desire to demonstrate their commitment to skills development.

“Brewing a Better World”

In their newly revised 2020 strategy, HEINEKEN is, globally and locally, committed to a campaign of ‘Brewing a Better World’, and through this, six important pillars receive attention. This results in sustainability and good business practice being embedded in the business and delivers value for all stakeholders.

“‘Brewing a Better World’ links six different pillars, and we have dedicated programmes for each, as sustainability should be ingrained in our way of business thinking,” Van den Eijnden explains, listing health and safety, CO2²reduction, water conservation, responsible consumption, local sourcing and growing with the communities in which they operate.

CO2 reduction

HEINEKEN has set quite significant targets in order to reduce their carbon footprint. For example, all of their coolers and fridges that are on the market are green coolers. Often, the impact of these are underestimated, but there are thousands of them in bars and restaurants. These green coolers and fridges give off very limited CO² emissions and they save a lot of electricity. All together, they have a significant impact. In addition, they are investigating the use of a solar panel farm at the brewery to power production. Such investments and projects are in line with the global 2030 ambition to primarily use renewable energy.

Water conservation

The company’s goal is to use a limited amount of water when brewing the beer.

“There are numerous projects in place, which are aimed at reducing water usage.

“For example, we are using cooling towers next to the packaging lines that will enable us to use less water to conduct the entire operation,” he says. This has enabled them to reduce water usage by 12% per litre of beer.

“We are actively contributing to that and while regionally, in the last few months, Gauteng has not seen challenges, we are actually teaming up with HEINEKEN Global to see how we can further decrease the water usage in the brewery in South Africa. We realise very clearly that South Africa is a water scarce country so we see it as key to doing our part—and more importantly—to preserve water,” he adds.

Local sourcing

Their local sourcing efforts focus on two pillars: their raw material and packaging material. In terms of packaging, over 80% is already sourced from companies within South Africa. For their raw materials, they have a regional target to source at least 60% sustainably from the African content. Many of their operating companies in the region have partnership projects with local smallholder farmers. This boosts the local economy, provides household incomes and limits their CO² emissions of importing raw materials.

“Our main raw material, the malted barley that we put into the beer, is still coming from Europe but we’re trying to educate and support a new generation of emerging black farmers to grow a specific kind of barley. We need barley of the highest quality to eventually use for our beers, so we provide training to these farmers.

“In the process, barley is malted and this malted barley is eventually used in our beers. As we currently don’t have malting facilities in South Africa, we will be investing in a malting plant to process our barley. This is a win-win in every single way: the new plant provides local jobs and we can increase the number of farmers who work with HEINEKEN and will have a guaranteed off-taker for the future. Essentially, we are supporting a new generation of farmers to work with HEINEKEN, thus creating local employment,” says Van den Eijnden.

Providing local employment in this manner is a multi-year process, but Van den Eijnden says it began two years ago and every year, they enlist more and more farmers to start working with them.

Communities in which they operate

HEINEKEN places a great deal of importance on Corporate Social Responsibility and they have embarked on a number of initiatives, which give back to the communities.

HEINEKEN is a proud co-founder of an initiative called Orange Corners, which supports young South African entrepreneurs.

“We currently have three so-called Orange Corners in Johannesburg: in Braamfontein, Diepsloot and in Maboneng. These are workspaces where young entrepreneurs receive training, coaching and the tools to start and grow their businesses. HEINEKEN employees actually mentor these young entrepreneurs,” Van den Eijnden says.

Secondly, they help communities to gain access to clean water.

“An initiative we support is Play Pumps—an organisation, which installs and maintains water pumps at a school. We installed and helped maintain close to 50 in rural areas in the last two years, mainly in the Free State and in the Eastern Cape. Families play on the play pump and then water will be taken out of the ground. It serves as a fun tool and provides clean water at the same time,” he explains.

The third initiative is a fairly new one, which centres around mother and child health.

Health and safety

Every company within HEINEKEN is obliged to have a programme that promotes health and safety.

“Part of this is our Africa Health Placements, where we bring internationally qualified doctors to the rural areas of South Africa. They volunteer from Europe, come for a minimum of one year and serve in these areas, uplifting the pressure on understaffed hospitals where healthcare is needed the most,” Van den Eijnden concludes. 

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