Heineken External Analysis
Macro Environmental Factors
1. Demographics In the beer industry, 40% of the US population consumes beer regularly (at least once a week). Amongst that, 30% of drinkers are frequent beer shoppers. However, the beer drinker profile is skewed towards younger males between the ages of 21-30 years old with only a moderate education and modest household incomes. It has also been determined, that consumers drink less beer as they age because of health and wellness concerns. For Heineken, in the mid 1990’s, the average drinker was 40 years old. In the past couple years, the average Heineken drinker’s age has dropped to 30 years old.
2. Political The beer industry is subject to many government regulations regarding distribution, labeling, advertising, prices, taxes, and alcohol content. Alcohol legislations differ from state to state, therefore being enforced at the state level. Yet, they are all subject to federal regulations by the Bureau of Alcohol Tobacco and Firearms (ATF). To limit alcohol abuse the government made a disproportionate tax rate on beer, doubling the tax rate per barrel of beer. Post prohibition introduced the 21st amendment and its “three tier” distribution system which means beer is only allowed to be passed from producers through distributors to retail outlets. Heineken has always been run by family members. They always used strong, family-driven traditions for running their company. Thorny Ruys was the first non-family member to be appointed as CEO. Prior to Ruys, the company was run by three generations of Heineken ancestors. However, he resigned 18 months ahead of schedule because his lack of improvement in performance. In 2005, Jean-Francois van Boxmeer was appointed as CEO and was Heineken’s first non-Dutch CEO.
3. Economic In the US, the beer market is usually segmented into beer types; Premium, Popular, Light, Imports, and Domestic specialties. Heineken falls into the Premium and Import segment which allows them
1. Demographics In the beer industry, 40% of the US population consumes beer regularly (at least once a week). Amongst that, 30% of drinkers are frequent beer shoppers. However, the beer drinker profile is skewed towards younger males between the ages of 21-30 years old with only a moderate education and modest household incomes. It has also been determined, that consumers drink less beer as they age because of health and wellness concerns. For Heineken, in the mid 1990’s, the average drinker was 40 years old. In the past couple years, the average Heineken drinker’s age has dropped to 30 years old.
2. Political The beer industry is subject to many government regulations regarding distribution, labeling, advertising, prices, taxes, and alcohol content. Alcohol legislations differ from state to state, therefore being enforced at the state level. Yet, they are all subject to federal regulations by the Bureau of Alcohol Tobacco and Firearms (ATF). To limit alcohol abuse the government made a disproportionate tax rate on beer, doubling the tax rate per barrel of beer. Post prohibition introduced the 21st amendment and its “three tier” distribution system which means beer is only allowed to be passed from producers through distributors to retail outlets. Heineken has always been run by family members. They always used strong, family-driven traditions for running their company. Thorny Ruys was the first non-family member to be appointed as CEO. Prior to Ruys, the company was run by three generations of Heineken ancestors. However, he resigned 18 months ahead of schedule because his lack of improvement in performance. In 2005, Jean-Francois van Boxmeer was appointed as CEO and was Heineken’s first non-Dutch CEO.
3. Economic In the US, the beer market is usually segmented into beer types; Premium, Popular, Light, Imports, and Domestic specialties. Heineken falls into the Premium and Import segment which allows them