Heineken Beer Company

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Heineken Beer Company

By

Lisa Jones-Carter,

Blake Littles,

Harvey L. Brooks

Alvin Davis

Don Billoni

PROCUREMENT 5000

Professor Judith Croxton

February 22, 2011

Global Markets and Global Advertising

Global Marketing

North America continues to lead the global market regions in beer consumption per capita, at 62.9 liters per head in 2002. Eastern Europe registered the largest growth in consumption between 1997 and 2002, jumping 66.8 percent to reach 41.2 liters per capita. Western Europeans consumed an average of 34.5 liters, and Latin Americans consumed 23.5 liters, according to Euro monitor International.

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Heineken imports have risen steadily, from $2.2 billion in 1995 to over $4.3 billion in 2002, representing the industry's second fastest-growing sector. This growth was partly driven by shifting consumer tastes from mass-produced U.S. beers to more pricey imports. This preference was good news for the larger U.S. wholesalers who invested heavily in the highly competitive market for distribution contracts with foreign brewers. Almost 95 percent of U.S. beer and ale imports come from Canada, Mexico, and Western Europe, especially the Netherlands, Germany, and the United Kingdom. The most popular beer import was Mexico's Corona, which sold 103.8 million cases in the United States in 2002, followed by Heineken, at 91.6 million cases.

Distribution is clearly an important factor in the domestic market, and its importance globally has taken a significantly boosted priority. Obtaining access to distribution systems is a driving force behind the early 2000s wave of international joint ventures and alliances. The accelerating globalization of the brewing industry has generally tended to diminish the power and influence that distributors wield, since the larger multinational breweries tend to have significantly greater ability to move into foreign markets and establish deals on their terms. The European...