Heineken Turns Up Marketing Heat as Profits Sag

24 February 2005

Beer behemoth Heineken is boosting its marketing budget this year by €100 million ($132m; £69m).

The Netherlands-headquartered brewer, world number four by volume, is responding to sluggish sales in key European and US markets, which together with the dollar's freefall, drove down profits by 33% in 2004, from €798m to €537m.

Its marketing strategy emulates that of consumer goods giant Unilever which last year increased spend in a bid to beat off competition [WARC: 28-Oct-04].

Heineken ceo Thony Ruys says the company, whose brands include Amstel, Tiger and Murphy's aims to "turn up the heat" and boost its position in the premium beer market.

To this end it has signed at vast expense megastar John Travolta to appear in a new US TV ad, part of an "aggressive" and "high impact" campaign. Travolta follows in the footsteps of fellow Hollywood A-lister Brad Pitt who appeared in a Heineken TV commercial during this year's football Super Bowl.

The company is also mulling the disposal of some smaller brands, either by sell-off or ceasing production.

The whole package, Heineken admits, could adversely affect net profits in 2005.

  • Smaller rival, Denmark headquartered Carlsberg, also reported a fall in net profits to €64m in 2004 from €129.7M in 2003.

    Data sourced from Financial Times Online; additional content by WARC staff