Heineken, the world’s second largest brewer, announced that it plans to cut 8,000 jobs in a bid to return to its pre-pandemic operating margins. The layoffs account for approximately 10 percent of the company’s global workforce.

The plan, announced February 12 in its most recent earnings statement, was framed as part of a larger plan to cut costs engineered by CEO Dolf van den Brink, who described 2020 as “a year of unprecedented disruption and transition.” The 48 year old has been at the helm of Heineken since June, 2020, having been promoted from president of the company’s Asia Pacific Region.

COVID Affected Global Operations

The company, like so much of the industry, was hit hard by the COVID-19 pandemic. Heineken sold 8% less beer in 2020 than 2019, resulting in a 17% decrease in revenue, according to Fox Business. Altogether that adds up to a net loss of $248 million.

Van den Brink’s plan, dubbed “EverGreen,” is projected to save the company approximately $2.4 billion over the next four years through “redesigning its organization, reducing the complexity and number of products and identifying its least effective spending.”

Heineken and other brewers are hoping that we will return to some sort of “normalcy” by the end of this year, as more people worldwide continue to receive vaccinations against COVID-19. On-premise sales have taken a hit due to on-going safety restrictions in many localities.

“Only when the whole world is vaccinated to a certain degree can we say we really come out of it. Directionally, we partly agree, but we have a bit of caution given the global footprint of our company,” Dolf van den Brink told Reuters.

Beyond Beer Strategy

The Dutch beverage concern also plans to ramp up its Beyond Beer portfolio – including both hard seltzer and soft drinks – while increasing its focus on online sales.

Canijilla Hard Seltzer

Heineken has made some interesting initial moves into the spiked and sparkling space over the past year. The brewer introduced Canijilla last September, a hard seltzer inspired by the flavors of Mexico.

The drink comes in two varieties: Mango Picosito and Limón-Pepino. The former is a marriage of sweet and spicy flavors, while the latter is a twist on the classic combination of lime and cucumber, a Mexican favorite.

Bask Hard Seltzer

In October the brand introduced Bask, its IPA Style Hard Seltzer. The hoppy bubbly water is beer/ seltzer hybrid, meant to appeal to craft beer purists. It’s available in three flavors: Blood Orange, Lemon, and Original Hops.

“Bask is inspired by the palate and mentality of craft beers, but is intended for anyone who craves a flavorful and meaningful drinking experience,” says Ryan Webb, Heineken USA’s director of innovations. “In our initial research, we saw that only 30 percent of craft-beer drinkers consumed hard seltzers last year, providing an opportunity to deliver a new product that would bridge that gap.”

SunRise Hard Seltzer

Heineken is also teaming up with soft drink company AriZona to distribute its SunRise Hard Seltzer later this quarter. The new seltzer, made with real fruit, will be released in four flavors, all inspired by AriZona’s popular juices: Mucho Mango, Cherry Punch, Lemon, and Grapefruit.

“We’re excited to be working with AriZona to introduce the next evolution of Hard Seltzer. Most of the current Hard Seltzers on the market are clear, with similar flavor profiles, so we jointly saw an opportunity to add a splash of fruit to the category as we know consumers are looking for real ingredients and great taste,” said Jonnie Cahill, chief marketing officer for Heineken USA.

While it’s a shame that so many more industry jobs are being lost to the pandemic, it will be interesting to see what the future holds for Heineken as the company looks “beyond beer” to rebuild its portfolio.

Erin Grafton
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