Heineken takes broom to executive suite

Heineken has shaken up its executive ranks in a bid to boost flagging sales. On 31 March 2015 the Dutch brewer said that a number of its executives, including the company's chief strategy officer, would leave the group as it re-organises its business into four geographic regions.

These changes come less than two months after Heineken reported its slowest sales growth since 2007. In 2014 revenues rose just 0.1 percent to EUR 21.2 billion.

Chris Barrow, who has led the group's strategy since 2013 and who has been with the company for more than a decade, will leave Heineken in July 2015.

Mr Barrow will depart alongside Alexis Nasard, the president of Heineken's Western Europe operations, and Siep Hiemstra, president of the group's Africa Middle East division.

Mr Hiemstra will retire, as planned, in August, while Mr Nasard will leave at the end of June. The company said Mr Nasard “indicated his intention to leave Heineken to meet his ambitions outside of the company”. Heineken did not say where Mr Nasard’s future ambitions lie.

Mr Barrow’s departure is widely seen as underlining the fact that future merger and acquisition opportunities will be “bolt-on deals” with local brewers rather than major transformational deals. This means that there is not much for an M&A man to do.

Heineken’s musical chairs also saw Dolf van den Brink, currently CEO of Heineken USA, being sent off to Mexico where he will become the new CEO of Cuauhtemoc Moctezuma/HEINEKEN Mexico as of 1 July 2015. In the U.S. he will be succeeded by Ronald den Elzen, the current Managing Director of Heineken Portugal.

The executive upheaval was announced along with a change in strategy for Heineken that will align its business around four regions.

This move, which speaks volumes about the dramatic decline of the once red-hot Russian market, will see Heineken abolish its central and eastern European region. The central European markets will be integrated into the Western Europe unit to closely resemble the EU, while the Russia and Belarus businesses will be merged with Heineken’s Africa and Middle East division to form a new region. It is suspected that further volume declines in Russia will be camouflaged by volume increases in Africa.

The existing Americas and Asia Pacific divisions will remain unchanged.

The realignment of regions may have operational benefits but it will also reduce the stream of market data coming out of Heineken. From the media’s point of view this is to be regretted.