World: Heineken to cut 8,000 jobs and try to ‘move beyond beer’

Heineken is cutting 8,000 jobs and trying to "move beyond beer" after the pandemic hammered sales, CNN reported on February 10.

The brewer of Moretti and Amstel said in an earnings statement on February 10 that it will slash almost 10% of its global workforce and seek savings of €2 billion ($2.4 billion) over two years as part of an overhaul designed to improve efficiency.

The restructuring will cost about €420 million ($509 million) and reduce head office staff costs by 20%. Regional offices and local operations will also be impacted.

Heineken reported a net loss of €204 million ($247.6 million) in 2020, compared with a profit of €2.2 billion ($2.7 billion) the previous year. Revenue tumbled 16.7% to €23.8 billion ($28.9 billion) amid closures of restaurants and bars in key markets, as well as other restrictions on social gatherings and alcohol sales.

"The impact of the pandemic on our business was amplified by our on-trade [pubs, bars and restaurants] and geographic exposure," CEO Dolf van den Brink, who took charge in June last year, said in a statement.

Heineken estimates that at the end of January less than 30% of bars and restaurants were operating in Europe, which is its biggest market. Many countries in the region reimposed lockdowns in December and have tightened restrictions since. Heineken said it has written off €191 million ($231.6 million) relating to various individual UK pubs.

With more alcohol consumption taking place at home, Heineken's direct-to-consumer platforms, including Beerwulf, Six2Go and Drinkies, tripled orders last year. Online sales of its home-draught systems grew in the mid-double-digits.

Still, beer sales by volume slipped 8.1% in 2020. Heineken sold more non-alcoholic drinks, however, driven by Heineken 0.0 and Maltina in Nigeria. The company said that the segment has "much potential for growth" and that it plans to make non-alcoholic beer available everywhere.

The group is also pushing into hard seltzer — flavored sparkling water containing alcohol.

Heineken launched products in this category in Mexico and New Zealand last year, with more launches to come in 2021. In the United States, it has partnered with drinks brand Arizona to launch Arizona Sunrise Hard Seltzer.
Van den Brink said that Heineken's strategic review would leverage existing strengths and new opportunities to "chart our next chapter of growth."

"We aspire to deliver superior and profitable growth in a fast changing world," he added.

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