Heineken Beer in the US Market

Over time, the Beer industry has undergone massive development. In overall, statistical evidence shows that the rate of consumption is upward (Munching, 2007). Compared to the United States, Europe still takes the lead with respect to alcohol consumption. Also worth noting is the fact that the beer market in the Europe is increasingly being dominated by wine. Generally, the European market is bigger than the US’s. Currently, the US assumes the sixth position, behind Britain, France, Hungary, Czech Republic and Ireland (Goldstein, 2010).

Exhibit 1.5

GLOBAL BEER MARKET

SHARE OF PRODUCTION BY CONTINENT (r)

2003 – 2008

Continents 2003 2004 2005 2006 2007 2008

Europe 34.9% 34.1% 34.1% 33.4% 33.1% 32.2%

Asia/Middle East 26.9% 28.5% 28.5% 30.0% 31.2% 31.7%

North America 22.2% 21.4% 20.9% 20.0% 19.4% 19.0%

South America 10.2% 10.2% 10.7% 10.6% 10.5% 11.0%

Africa 4.4% 4.4% 4.5% 4.6% 4.7% 5.0%

Australia/Oceania 1.4% 1.3% 1.3% 1.3% 1.2% 1.2%

TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

(r) Revised

Source: Goldstein, 2010

According to Goldstein (2010), beer consumption in the United States accounts for a significant 53% of the total sales with regard to beverages. Regardless of this, the growth of consumption has been static in the recent past. The stagnant growth has been experienced since 20004, when Olge (2007) believed that the industry hit its topmost maturity mark. Goldstein (2010) indicates that in 2009, the sales went down by 2.2%.

With regards to Heineken, statistical evidence shows that it assumes the second position in terms of the most imported beer in the United States behind Corona Extra. On a regional scale, it is the most consumed beer and it assumes the first position in the entire Europe. It is a global brand with a significant 115 breweries situated in more than sixty five countries across the globe.

Source: Goldstein, 2010

Recent trends indicate that beer assumes the top position and it is the widely purchased by adults. In essence, 37% of adults residing in the United States are beer drinkers. Projections indicate that the industry is bound to experience exponential growth in the near future. The major competitors of this brand have been identified to be Grupo Modelo and InBev. However, Heineken is better positioned as its profits increased by 42% in the past financial year. This was a growth by 695 million Euros as compared to its competitors hat had a growth of 32% and 37% respectively. Besides the male adult drinkers, Heineken also targets women in its marketing strategies.

References

Goldstein, R. & Campell, S. (2010). The Beer Trials. USA: Fearless Critic Media

Munching, P. (2007). Beer Blast: The Inside Story of the Brewing Industry’s Bizarre Battles for Your Money. USA: Crown Business

Olge, M. (2007). Ambitious Brew: The Story of American Beer. USA: Harvest Books