“I did not take this job to lose,” Heineken USA CEO Maggie Timoney said near the close of the company’s national sales meeting with wholesalers in New York City last week. “We’re going to win and win together.”
Timoney, who took the CEO role about 16 months ago, is known for being realistic and she didn’t sugarcoat the company’s challenges.
Those challenges were briefly addressed during Heineken N.V.’s 2019 third-quarter earnings report earlier this week. In a brief summary, Heineken N.V. said its U.S. beer volume “declined high-single digit due to the negative impact of the phasing of sales last year, the continuous decline of Tecate and shortages of 24 oz. cans, partially offset by a better underlying trend in Heineken.”
During last week’s meeting in NYC, they were also projected onto screens in the meeting hall. Year-to-date depletions for Heineken (-1.1%), Dos Equis (-2.1%) and Tecate (-15%) are all in decline.
But so too was the company’s plan forward and its stated goal of becoming the “most innovative and exciting U.S. beverage company by 2023.” HUSA chief marketing officer Jonnie Cahill teased a number of new innovations in a blink-and-you-miss-it presentation, including FMBs, margaritas, teas, seltzers, lemonades, spirits and more.
According to Cahill, HUSA has a “full innovation pipeline ready to go,” but he didn’t want to show the company’s hand five months before those products launch. HUSA did unveil one innovation: Canijilla, an FMB in two flavors, limon-pepino and mango picosito, which checks in at 5% ABV. That brand will be tested in in California and Texas during the first quarter.
Nevertheless, HUSA executives shared their vision for 2020 and beyond, which includes packaging refreshes for Amstel Light, Dos Equis, Tecate and Red Stripe.
Executives laid out three strategic pillars moving forward: fix its core brands, grow through innovation and be relevant locally. They also laid out a mission to “stop the bleeding” and they identified “must win” battles, including reversing negative trends in California, doubling down on its non-alcoholic Heineken 0.0 offering, growing Dos Equis, focusing on cans and refilling its innovation pipeline.
Timoney noted that HUSA is a “four share player, not a 40 share player,” but she said the company would act more entrepreneurially in the future to increase business.
Among the plans for 2020 is another $50 million investment behind Heineken 0.0. To drive trial, the company is also releasing Heineken 15-packs that include three cans of the non-alc beer.
Heineken VP of marketing Borja Manso noted that ⅔ of Heineken 0.0 consumers are incremental. He said the company isn’t close to finding the ceiling yet for the non-alcoholic beer, and the plans call for 10 million samples in 2020.
Chief sales officer Jim Sloan added that Heineken 0.0 faced out of stocks at retailers in July, and he encouraged wholesalers to stock more than a 10-day supply of the beer.
HUSA plans to market 0.0 during “Dry January,” when consumers supposedly swear off alcoholic beverages for a month. Additionally, Daniel Craig, who will star in the next James Bond film, No Time to Die, will also be featured in a 0.0 commercial as 007. HUSA also plans another “Bring Your Beer to Work” campaign, as well as a promotion around the U.S. Open in September and a promotion celebrating first responders in October.
Among the priorities for 2020 is reviving Amstel Light, which Cahill admitted hasn’t received enough love in the past and became “stale.”
“We got what we deserved,” he admitted.
Part of the renewed focus on Amstel Light includes a multiyear sponsorship deal with professional golfer Phil Mickelson that will play out across the brand’s and the athlete’s social channels, as well as on- and off-premise activations.
HUSA also shared plans for a new advertising campaign for Dos Equis. Although the brand is growing in nine states, California’s double-digit negative trends are dragging down its performance. In an effort to reverse those trends, the company is releasing new packaging and a new advertising campaign with the tagline, “An interesting beer for interesting times.” That campaign with its cautionary tone takes popular trends — such as ancestry companies, photo aging apps and dating profiles — and looks at the realities behind them.
Dos Equis will also deepen its involvement with college football and is seeking additional partnerships with universities in the SEC, Big 12, Big 10 and Pac 12. The ability to use the marks of those schools will allow the brand to be more local.
HUSA is also investing more than $10 million behind Dos Equis Mexican Pale Ale, which recently launched in the northeast, and $2.3 million behind Dos Equis Ambar.
The priorities for Dos Equis moving forward is to defend its on-premise draft business, which accounts for 30% of the brand’s sales. The company has a goal of adding 2,000 tap handle placements over the next three years. It is also looking to grow its can business with a sales push for the “Summer of Dos,” including a Texas specific can and a summer can.
- Tecate’s depletions are down 15% year-to-date, which Cahill admitted is “super scary.” However, he added that “the beautiful thing with minus 15 is you’re free.” Tecate senior brand director Oscar Martinez said the goal for 2020 is to connect with second- and third-generation Mexican-American consumers with a new campaign called “Mexico is in us.” The brand will invest in experiences that focus on music festivals and soccer.
- As for Red Stripe, HUSA will lean into the Jamaican brand’s association with cannabis with an “It’s 420 somewhere” campaign that includes point-of-sale items and merchandise. In the on-premise, HUSA is introducing Red Stripe branded tin cups.
- Chief sales officer Jim Sloan said HUSA will pursue concessions, airports and hotel taphandles in the future “to get back in the game.” He shared that when he goes to airports and sees the same four taphandles, it “pisses” him off. “We’re going to try to fix that,” he said.
- Although original Heineken’s year-to-date trends are down, the company’s can sales over the last 52 weeks are up 4.4%, while its bottle sales are down 4.3%. HUSA is attempting to even out its mix, which currently sits at 76% bottles and 24% cans.