I WAS one of the lucky 71,199 spectators seated in Athens' OAKA Stadium last Wednesday for the UEFA Champions League final between Italy's AC Milan and England's Liverpool FC, courtesy of a press junket from the tournament's main sponsor, Dutch brewer Heineken NV.
"Responsible consumption of beer has to be at the heart of our business, so we've decided to market the idea of responsibility. We expect everyone to take responsibility for their actions ...'
- Sean O'Neill, Heineken's group corporate relations director
It was a trip of a lifetime - the chance to soak up the incredible atmosphere of a major soccer final and to watch the world's best footballers in action. And for sure, it was an occasion to remember - even if AC Milan's Fillipo Inzaghi did handle the ball for his scrappy first goal and Liverpool's Dirk Kuyt was offside when he scored late in the second half.
But what struck me more than anything that occurred on the pitch was mainly what I observed off it. Yes, there was the amazing logistical feat of taking care of 1,080 guests from around the world - an impressive accomplishment in itself. Hitches, there were none.
But the single most memorable experience for me was not the tangibles but the intangibles, namely, observing and learning what goes into building a profitable, world-class brand.
Ah, but wait a minute you might say - of course, I'd be expected to sing Heineken's praises. After all, the company hosted an all-expenses trip to Athens, showing its guests the best possible hospitality throughout the time they were there. After such corporate largesse, it would be pretty poor form to write a critical, negative article, wouldn't it?
But having been a financial journalist for 15 years and having written about hundreds of companies - often critically - over that time, I can quite honestly say that this time was uniquely different.
The main thing which caught my attention was that Heineken operates with virtually no hierarchy - all staff from its major shareholder to CEO to regional personnel to operational staff greeted and spoke to each other on a first-name basis and a cheerfulness that could only come from being happy to be employed by the market leader.
Moreover, I sensed that because of this organisational flatness, it somehow made it easier to instil in everyone a shared commitment and determination to succeed. And with this familiarity came a pervasive awareness of how the business is doing - without exception, every Heineken person I spoke to had a pretty firm handle on where the company stood at that point on achieving its objectives and what more was required of them.
But first, the Champions League and what it means to the company. 'There is a natural fit between Heineken, which is a premium beer brand and the Champions League, which is Europe's top soccer tournament so it makes sense for us to sponsor the tournament,' Hans Erik Tuijt, global brand activation manager, told me in Athens.
'Also, football fans are naturally skewed towards drinking beer. Our research shows that in the first year of sponsorship, 30 per cent of Champions League viewers know that Heineken is the main sponsor.'
The company is reluctant to divulge just how much the sponsorship costs but considering that four billion people tuned in to watch the tournament in 2006, the impact on revenue can only be enormous.
Last year, for example, was Heineken's first involvement with the Champions League and perhaps not surprisingly, it posted record financial results. According to its 2006 annual report, revenue for the year ended Dec 31 grew 9.6 per cent to 11.8 billion euros (S$24.2 billion), earnings before interest and tax was up 12.7 per cent to 1.6 billion euros and net profit increased 10.7 per cent to 930 million euros.
Heineken's shareholders were amply rewarded - dividends proposed were lifted year on year by 50 per cent and the company's market capitalisation grew 35 per cent over the 12 months. As of Monday, its stock price in Amsterdam was 42.33 euros, a six-year high and just a tad below the all-time high of 44.67 euros in September 2000.
How these numbers were achieved was the outcome of a four-pronged strategy, according to group commerce director Peter van Campen. 'Accelerating topline growth is of course essential but we also aim to accelerate efficiencies - we have managed in two years to cut out fixed costs from 35 to 33 per cent of revenues and by FY2008, the aim is to achieve gross savings of 450 million euros,' said Mr van Campen. 'Then there's speed of implementation, where in 2006 we put into practice our belief that flatter and less complex management structures are essential to increase the speed at which decisions are taken and implemented. And fourth is our focus on acquisition opportunities to ensure the Heineken brand or our portfolio of brands is number one in the countries we operate in.'
Apart from its focus on revenues, costs and growth by acquisition what is perhaps most fascinating about Heineken's ability to stay ahead of its rivals is its commitment to corporate social responsibility (CSR).
It is the first brewer anywhere in the world to recognise that getting its customers to drink responsibly can give it an edge, especially so in a politically correct world which is growing increasingly intolerant of drink-driving.
'Responsible consumption of beer has to be at the heart of our business, so we've decided to market the idea of responsibility,' said group corporate relations director Sean O'Neill. 'It's a whole new area for brand marketers to look at, the idea of a beer company making it socially unacceptable for people to drive after having a few drinks.'
Promoting awareness
The company has set up a website to promote this sort of awareness - www.enjoyheinekenresponsibly.com - which contains plenty of useful information about the effects of alcohol consumption (You even have to be of legal drinking age to enter the site!).
'We expect everyone to take responsibility for their actions - suppliers, distributors, staff, consumers, etc,' said Mr O'Neill. 'At the end of the day, there has to be a recognition that responsible consumption of beer can contribute to a healthy, active lifestyle.'
Here, then, is a company that actually sells a relatively simple product in a very competitive market - beer is, after all, a beverage that even amateur brewers can concoct at home with do-it-yourself brewing kits - but one which excels in what it does and has managed to become the market's undisputed leader.
How has it achieved this? If I had to find a single reason for this, I'd have to say it's because of an exceptionally strong organisational culture - every employee knows what is expected of them, shares the same vision and speaks a common language. There are no airs about them and no status differences to pose unnecessary barriers to getting the job done.
Clearly, there are plenty of lessons to be learned here for any company looking to become a global leader.
