Posted on | November 1, 2012
Written by | Kristen Wolfe Bieler
Heineken USA grows its portfolio of upscale international beers, while educating the trade on “The Perfect Pour”
When Donal Dennehys arrived in New York from his native Ireland, he was horrified at the quality of most draught beer. “Much of it tasted terrible because it was pumped with air from the bars’ dusty basements and the lines were all filthy, not to mention the glasses,” recalls Dennehys, who today operates Mr. Dennehys, a bar in New York’s West Village neighborhood which has built a stellar reputation for quality draught beer. “It took awhile for people to trust draught beer again, and the major brewers are just catching up to the game in terms of quality.”
One supplier leading this charge—not just in the quality of its own draught program, but in upgrading the draught beer experience in general—is Heineken USA. “I only work with suppliers that work with me,” Dennehys states, “and in the last few years Heineken has worked tirelessly when it comes to attention to detail, right down to the glass itself.”
The Premiumization of Draught
Heineken’s goal is no less than changing the American mindset about draught. The company’s large-scale effort began as part of an internal program called Passion for Beer, inaugurated to educate every person at Heineken about beer ingredients, the brewing process, pouring and presentation. It was so successful, they rolled it out to the trade, teaching the on-premise how to build better draught systems and deliver a superior consumer experience. “A draught beer should be a higher quality experience than popping the crown off a bottle,” says Patrick Libonate, Director, On-Premise and Draught Strategy, Heineken USA. “Yet in the average bar, you’ll see a million mistakes and the retailer isn’t the only one to blame—suppliers and distributors are at fault as well.”
While wine interest and education exploded in the 1980s and ’90s and the category developed an upscale image, beer has remain commoditized, says Libonate. “The common American practice of serving beer in pitchers is laughable in Europe,” says Libonate. “The idea that you would put a large quantity of beer in a plastic container and pour it out over time when it will be flat and likely too warm is far from ideal. There are laws in Belgium and the U.K. about not pouring certain beers in the wrong glassware—that is how sacred draught beer is in Europe.”
The most common error Libonate sees is dirty glassware. Between leftover lipstick from a previous customer and cleaning agent residue, glasses are frequently detracting from the taste of the beer. “This is a primary reason that a patron would not order another beer or would not come back to the establishment—it costs operators a lot of business they don’t even realize.” Using the right kind of cleaning agents, investing in the highest-quality washers—even hand-checking the glasses before they are used again—are not insignificant investments, but ones that will pay off in sales. “We are working to help operators understand that it’s worth spending the money on the right equipment,” says Libonate.
Glassware is tricky for licensees, Libonate acknowledges: “We realize that operators have a limited amount of space and they can’t take on glassware from every supplier. But we still want them to understand the value of doing it the right way. Our message is all about quality over quantity.” Presentation is everything, Dennehys insists: “The glass you serve the beer in makes a hell of a difference. If I go into an establishment and I see improper glassware, beer not holding its head, I won’t drink it and order a bottle instead.”
While Heineken is still collecting feedback on its initiative in the U.S.—and plans to study a base of 50 accounts where the Passion for Beer program is in place—they have been able to obtain preliminary sales data which shows that not only are Heineken sales on the rise in participating bars, but all beer sales are up, Libonate reports: “That is the real advantage for the retailer—they are making more money.”
Heineken’s target consumer is primarily male, age 27 to 33 and well traveled, with a higher-than-average income for their demographic and an “openness to new experiences.” Freddy Heineken himself, the genius brewer/marketer that grew the company into the world’s third largest brewer, set out to build a highly social aspect into the Heineken experience—in other words, it wasn’t a beer to be used for drinking away problems, but for gathering friends and inspiring interesting conversation.
“Our messaging reflects that,” says Libonate. “We want to buck the trend of beer advertising, by featuring high-energy music and adventurous unique imagery. It’s not for everyone, but we really do believe its right for our consumer.”
What better way to speak to this consumer than by teaming up with James Bond. As part of a global partnership, Heineken has engaged in a large scale advertising and digital campaign around the 23rd Bond movie release. “Bond embodies so much of who we see our consumer to be—a man of the world,” says Libonate. To drive retail traffic, Heineken developed a digital app called Spysight that consumers can download on their smart phones and use in participating accounts in order to win prizes.
Promoting food and beer pairing has been another way to engage consumers for Heineken. “You’ll hear from many experts how beer blows wine away when it comes to complementing food,” says Libonate. What started with the Newcastle brand (a particularly excellent beer for food) now extends throughout the portfolio, and Heineken is building an even more elaborate food pairing strategy to allow sales reps to create impactful activations on-premise like working with operators to develop specific recipes around different beers, and hosting expert-led beer and food dinners.
Beyond the Green Bottle
Strongbow Cider, the number one cider in the UK, is the most recent addition to the Heineken USA portfolio, and is representative of the company’s forward-thinking agenda: “We want to be the leaders in upscale and we are making efforts to stay on top of trends and offer new things—the cider draught potential is enormous here and the category is growing,” says Libonate.
Also targeting the on-premise, Amstel Wheat Beer on draught was launched a year ago in nine markets in select accounts. Wheat beer is one of the more popular styles today, and Amstel’s version tastes very different from Amstel Light which is a lager/pilsner style.
Newcastle is still relatively new to the portfolio—acquired five years ago—and has been a big hit on-premise. Interestingly, consumers often mistake it for a craft beer (even though its an import) thanks to its “quirky, fun vibe which is unlike a lot of stodgy imports,” Libonate believes.
Some of the most impressive growth in Heineken USA’s portfolio is coming from the Mexican portfolio, led by Dos Equis Lager and Amber. “Our great ad campaign has had a lot to do with that, but it’s really the quality of the beer that is the growth driver.” Dennehys took a chance on Dos Equis this summer and was surprised by the fantastic reaction: “Mexican beer on draught is rare, particularly in an Irish pub, but as soon as we put it in, we had to reorder.” Tecate, whose target market is the Mexican-American consumer, just unveiled Tecate Michelada, the first-ever michelada in a can format. (Recent ads in English are evidence of the brand reaching out to a broader market).
Riding the Upscale Wave
All news in the beer world these days seems to revolve around the craft movement, which is indeed growing by leaps and bounds. Rather than fear the movement’s growing market share, Libonate sees it as overwhelmingly positive for the industry—and for Heineken. “What craft beers have done for this country in the last decade is amazing, and the upside for us is that upscale beer consumers are increasingly seeking quality.”
While in the past it was a choice between Miller, Coors and Bud, consumers now have hundreds of choices, and they are much more curious about—and have higher expectations for—their beer. So, more than the craft revolution, what Libonate sees is a quality evolution: “Yes, they seek local, cute stories, but end of day, beer drinkers are seeking quality. That is the most important thing.”
Seasonal releases and limited edition bottlings have been a way for Heineken to offer the specialist, artisanal feel and variety that consumers have come to appreciate, thanks to craft movement. Dennehys has been particularly impressed with Newcastle’s seasonal portfolio: the Summer Ale was one of his biggest hits during the warm weather, and he has just put in the fall release, Werewolf, with good response.
Trade and consumers can only expect to see more along these innovative lines from Heineken, Libonate promises: “A generation ago, people knew what they wanted when they went into a bar, but that is really shifting, particularly with the Millennial consumer. The U.S. consumer is not slowing down in its thirst for new and unique beer experiences.”