Heineken bets on motor racing for Asian payout
MONZA, ITALY — Heineken is betting on Formula One to help it reclaim the title of leading global lager from Budweiser, a strategy that depends on broadening the sport’s appeal in Asia and persuading fans to pay more for their beer.
Heineken has grown strongly in Asia over the past five years, but the sales boost was driven by its cheaper Singapore-based Tiger beer brand rather than its highermargin namesake lager, which it promotes at the Grand Prix.
Asian drinkers have also turned to its cheaper rivals Budweiser and Tuborg. Heineken brand sales have grown more slowly in the region than globally for the past three years and fell 7.1% in the first half of 2017.
The Dutch brewer, Budweiser’s Belgian owner Anheuser-Busch InBev and Danish Carlsberg, which makes Tuborg, need regions like Asia to cut reliance on lower-margin Europe, or North America, where craft brewers are muscling in.
Heineken has ruled out an allout scrap for market share, leaving it vulnerable to rivals selling “premium” products at a lower price. Formula One presents a risky choice in a region where some countries have dropped the race, although Asia had as many races as the sport’s heartland Europe in 2017.
The world’s second largest brewer says the sponsorship, which it launched in September last year to supplement the Champions League soccer sponsorship it has had since 2005, will bring 200 million extra television viewers, many in Asia.
“For us in Formula One, every race with this level of hospitality is like a final,” Heineken brand director Gianluca Di Tondo told Reuters at the Italian Grand Prix, where Asian customers were among its guests.
The Heineken Chinese Grand Prix in April, one of only three races to bear the Heineken name and extra branding, was designed to make a mark in the world’s biggest market, of which Heineken has only a very small slice.
Heineken costs 10-25% more in China than Budweiser, which is also marketed as high-end, but the Dutch brewer believes consumers will ultimately pay a little more for the cachet of drinking its 150-year-old namesake brand.
“We are a world brand, we are everywhere and we tend to have price points that are a bit higher and a bit more premium and we want to keep it like that,” Heineken Chief Executive Jean-Francois van Boxmeer said. —