Heineken USA Cuts 15 Percent of Workforce

Yet another large U.S. beer company is making cuts.

Citing a need to restructure its sales organization, Heineken USA (HUSA) announced today it would slash 15 percent of its overall workforce.

HUSA spokesman Bjorn Trowery released a statement saying the restructuring would enable the company to operate more efficiently.

“Today, we announced that we are modifying our sales team structure to align with our strategy and to enable more efficient ways of working,” he wrote. “This will help Heineken USA be more cost effective, and allow us to reinvest behind our brands and business in the U.S. While change that impacts our people is always difficult, we believe these changes will better position Heineken USA for the future.”

Trowery added that the company is “actively” seeking “new opportunities” for the affected workers.

Additional questions regarding severance packages and the specific number of employees impacted were not answered as of press time.

HUSA is the latest major U.S. beer company to announce layoffs. Last year, Anheuser-Busch, MillerCoors, Constellation Brands and Pabst Brewing all made significant cuts to their respective workforces.

A number of well-known craft beer companies, including Heineken International-owned Lagunitas, which cut 12 percent of its workforce last October, have also scaled back in recent months.

Last December, Oregon’s Deschutes Brewery laid off dozens of employees, citing missed growth projections. Colorado’s New Belgium Brewing also cut its workforce by about 4 percent around this time last year.

The reductions come at a time when category-wide beer sales are relatively sluggish. Though off-premise sales at major chain retailers increased about 1.8 percent in 2018, according to market research firm IRI, shipments of beer made domestically declined by about 2 percent, according to the Beer Institute.

For its part, HUSA, the U.S. operating company for Heineken International that imports, markets and sells the global brewer’s namesake brands, as well as Dos Equis and Tecate, among others, saw “high-single digit” volume declines, according to an earnings report released earlier this month.

Indeed, off-premise dollar sales of HUSA offerings declined 4.1 percent, to about $1.5 billion, in 2018, at multi-outlet and convenience (MULC) stores (grocery, drug, club, dollar, mass-merchandiser and military), according to IRI.

Through the first four weeks of 2019, however, HUSA’s dollar sales trends had improved slightly, growing 1 percent, to nearly $94.8 million, IRI reported.

The layoffs also follow several leadership changes at HUSA, including the appointment of longtime Heineken executive Maggie Timoney as CEO in September. Timoney, who last served as CEO and managing director of Heineken Ireland, replaced Ronald den Elzen, who had led the U.S. business unit since mid-2015.

Last week, Jim Sloan took over as the company’s new chief sales officer. Sloan, who returned to HUSA after a nine-year stint with Four Loko-maker Phusion Projects, previously spent 16 years working in several sales and leadership roles at HUSA. He replaces Ray Faust, who exited the company earlier this year to join upstart spiked and sparkling alcoholic beverage company Crook & Marker.

Longtime Heineken executive Nuno Teles, who had served as HUSA’s CMO for about four years, also departed the organization in 2018. He is now the president of Diageo Beer Company USA.

Despite all of the organizational changes, HUSA is still planning to make a sizable investment behind its newest innovation — an alcohol-free beer called Heineken 0.0. After a successful launch across Europe in 2017, the brand is receiving a $50 million promotional investment from HUSA in the U.S. in 2019.

“We’re going to be investing in this as a growth engine for the Heineken brand,” Katharine Preville, Heineken 0.0 lead brand manager, told Brewbound in November.

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