A6

Heineken-Brewing a Better World

Why did it make sense to pursue Sustainability goals especially as consumers did not
consider it high on their priority?

Heineken Breweries is one of the biggest beer producing companies in the world with
operation in over 70 countries. They have been at the forefront of giving back to the
community and creating a rapport with them by providing pensions and being a part of
Amsterdam's cultural development etc. The company ran various community support
programs and environmental initiatives under six major bundles; “Energy/CO2”, “Water”,
“Sustainable Sourcing”, “Responsible Consumption”, “Community/Inclusive Growth” and
“Health & Safety” with defined goals and targets and plan of action. The company has
always believed that such efforts are beneficial in the long term. Their impact is not only
commercially viable but also provides the company with a good marketing opportunity.
Sustainable and responsible sourcing have become an increasingly important factor for
companies who are looking for ways not only to secure their supply chain but also to
differentiate their product from their competitors.

Heineken has taken major initiatives to develop and implement their sustainability goals.
They joined organizations like SAI (Sustainable Agriculture Initiatives) to help support
farmers develop high-quality products and improve their socio-economic conditions. They
have invested over half-billion dollars in Africa and also worked with many NGOs to create a
value chain for farmers. They are also trying to improve the local supply chain, providing
high-quality seeds, shared technical and agricultural expertise, investing in resources to
improve their crop yield and income. Heineken believes that building relations with the local
economy and workers would create a better support network which is mutually beneficial as
they would have the trust of the farmers to help produce agricultural products as per their
requirements which would benefit not only the company to but also enable the farmers to
increase their income. They believe that earning the trust and respect of the local
communities and authorities will have lasting implication as it establishes them as a serious
and ethical business entity and boost their profile as a responsible and eco-friendly brand.
Heineken has also encouraged its suppliers to adhere to SAI guidelines and has implemented
strict control measures and quality checks to ensure that their suppliers are also adhering to
the guidelines and following their protocols on sustainable procurement. They have made
rules and guidelines to ensure that participating suppliers are equally accountable for the
ethicality and sustainability during the supplying, purchasing, manufacturing, and retailing of
their products.

Research has shown that currently most of the consumers do not consider sustainability
factors as an important criterion for influencing purchase decisions with currently only 16%
of the consumers willing to pay to buy a sustainably produced product. Consumers find the
technical jargon confusing and the development reports are not appealing to them. ‘Quality’
and ‘Taste’ are the most important criteria to determine the preference of the consumer with
company research showing that more than 50% of buyers take these two factors as the
benchmark for buying the product. Heineken who are famous for their engaging commercials
is working with major advertising agencies to help educate the consumers about sustainable
production in a fun and quirky process. They are trying to incorporate the fact that sustainable
processed product is not only good for the environment and people involved but also have
superior taste and quality due to the eco-friendly measures and guidelines taken to produce
them. They have noticed that there has been a demand for craft beer due to people's
preference to support local breweries and economy, Thus they are also trying to highlight
their involvement and work done in local communities and project their brand to that
segment. By 2050, 70% of the world would be living in cities, and sustainability will be a big
part of people’s lives. Heineken not only wants to establish itself as a Nature-friendly brand
but also wants to highlight the importance of being a responsible organization. They want to
highlight that as the world progresses and people are aware of their action and its impact on
the environment, a sustainable developmental program will not only ensure a steady supply
of raw material in the future but will also win the hearts and minds of consumers who will be
more conscious with their choices. Heineken has always prided itself as a progressive
organization and such enterprising and forward-thinking ideas have shown why it had lasted
for the past 150 years and will exist for the next 150 years.

Submitted By:

Group A6
Bhavya Desai (P40012)
Nivedita Naik (P40028)
Pankaj Chhimwal (P40030)
Sudipto Raj (P40042)
Vanila Mehta (P40049)
Yogesh Prasher (P40055)

Sec A