Heineken focuses on Vietnam beer market, Tiger as a growth brand

CNBC | Thu, Jun 9, 2016 08:52:31 AM Share this on

Heineken is pouring money into Vietnam, which lags only Mexico on profitability for the Dutch beverage giant, according to the company's Asia Pacific President Frans Eusman.

Heineken has identified the Southeast Asian nation as the next key driver for its growing APAC business, as it becomes more difficult to squeeze profits from Africa, the Middle East and parts of Europe.

The 143-year-old brewer operates under two company names in Vietnam: APB Hanoi, which is wholly owned, and Vietnam Brewery, in which Heineken has a 60 percent stake.

"We're very proud of what we've been able to create," Eusman told CNBC's "Squawk Box." "Five years ago, Heineken entered with a very small brewery when Vietnam started to open up. Now we are the number two in Vietnam."

He said Heineken saw opportunities for growth across Asia. It spent $60 million building a brewery in Myanmar in 2015 and also operates in China, India, Cambodia, Indonesia and Malaysia, holding the country's biggest market share in half of them.

The company recently signed a joint venture with Philippine beverage producer, Asia Brewery, to bring the Heineken and Tiger beer brands to the Philippines, and Eusman hinted that further deals were to come.

Meanwhile, Eusman said that Myanmar was also a "fantastic opportunity."

"Myanmar, in a way, resembles Vietnam maybe 10 to 25 years ago," he explained. "It has a huge young population, growing wealth, growing GDP, and more of those people have expendable income."

Looking globally, he said the Singapore-born Tiger - Heineken's best-performing beer in Southeast Asia - was a "fantastic brand" with the potential to become popular worldwide.

"It's an exciting brand, and is driving a lot of our growth at the moment," Eusman told CNBC. "Tiger in the top 10 of our biggest global brands, and it is hardly available outside Asia at the moment. So what we're doing is building momentum and continuing it in Asia, and at the same time eyeing opportunities outside Asia."

Eusman said that despite fears of an economic slowdown in Asia, he was positive on the region's growth fundamentals - most key, the growing, young population.

"If you look at beer market and consumption per capita in the region, it is still relatively low compared to Europe, so there is a lot of potential," he said.

Source: CNBC