Heineken Moves To Become A Digital Lighthouse in The Beverage Industry

Heineken Moves to Become a
Digital Lighthouse in the

Beverage Industry
An Interview with Søren Hagh of Heineken Italia
In terms of digital transformation, what are the most important
things you’re doing at Heineken?
We believe that we are in the early stages of unlocking the digital

opportunities within our organization. We have no doubt at all that digital
will affect the commercial side of our business—sales and marketing; but it
will also have a profound impact on the way we operate internally, the way
our production operates, and so on. Digital transformation is going to
provide new opportunities and new challenges for our organization at all
levels and across all functions.
We have decided to place a disproportionate focus on the commercial side

of digital transformation over the next three years, particularly in the areas
of marketing and sales. We have an ambition to become the recognized
leader of the beverage industry in the area of digital—or the digital
lighthouse—by 2020.
What are some of the digital innovations that you expect to

bring to the beverage industry?
If you look at the consumer side, there are a couple of very big
opportunities. The most immediate one is in precision marketing.
Precision marketing allows us to move from a generalized way of
communicating with our consumers to a much more targeted and
interactive way of building relationships with consumers. That sounds very
simple, but the truth is it has a fundamental impact on how we organize
and how we deal with agencies.
In the past 18 months, we have put in place a structure that will allow us to
build all our future marketing on data. We believe that the future of
marketing will be based on the quality of our data, so we have created a
strategy for how we collect data, we have set up data management
platforms for our key subsidiaries to store data, and we are completely
revamping the way we operate in terms of working with data. While you
need the right data quality, you also have to deal up front with all the legal
and reputational risks that are in data. That’s been absolutely key.
We have another bucket that we are working with, which is the Internet of
Things. We own a lot of hardware out there in the world: bottles, bar taps,
millions of refrigerators. We need to start using that hardware in a much
more integrated, interactive way when communicating with consumers.
We have quite a few projects happening at the moment around that. There
are some very exciting things going on in that space.
What changes are you making in your interactions with

customers?
In terms of customers, we are focused on three big things: changing the

way we work with our existing customers, moving interactions with our
smaller customers onto digital platforms, and establishing new routes to
market.
In changing the way we work with existing customers, we are providing

integrated experiences inside and outside of the stores. Here we have some
very strong properties, like the UEFA Champions League, for example, that
are very relevant to many retailers and that we can leverage in quite an
interesting way when we start using CART data together with the data we
have for our customers.
Then we have the ambition of moving a lot of our interactions with our
smaller customers onto digital platforms. There are a lot of opportunities
for automating and optimizing the way we deal with smaller customers by
using digital ordering, digital incentive systems, and so on, which have
many efficiency implications at all levels of our organization.
The last big one is new routes to market. We are partnering with
established third parties, both pure players and vendors, and truly
becoming world class in the digital space. We have also identified some
very specific opportunities for our own direct-to-consumer channels. We
think it’s interesting to look at areas where we can add a disproportionate
value. We have a distribution system called the Heineken Sub, for example,
which is a home draft solution. The ambition there is to make the Sub to
beer what the Kindle is to books.
How do you manage digital transformation within the legacy

organization?
We started the digital transformation about 18 months ago, and the big
advantage we have is that our board of directors and our CEO are driving
this agenda. Quite early, they identified this as a significant opportunity for
Heineken. We believe in the idea of a coalition of the willing and using the
momentum you create in this coalition to showcase to the rest of the
organization what “great” looks like.
Heineken is a very decentralized organization, where many decisions

happen at the market level; therefore, our CEO urged regional presidents
to carry forward digital projects within their own markets. We created very
clear KPIs and a roadmap in terms of what the digital transformation looks
like and where different parts of the organization can contribute. When we
started the project, it was very clear that digital transformation is not a
process that has a specific end point. It’s a moving target, and by its very
definition that target is going to keep changing. We created clear
milestones, but we knew they would evolve as we worked.
Are your KPIs focused on the commercial aspect of the business,

or do they also focus on cultural and organization goals?
They are very much integrated, because you cannot deliver a digital
transformation in a commercial organization without first beginning with a
massive cultural change. It starts very simply, with the senior leaders
understanding and communicating why this is important. And much of the
past 12 months has been about capability building.
So where are you with the change effort across different

markets?
Heineken operates in very diverse environments. We have a big business in

Europe and North America, but some of our other big business units are in
Vietnam, Nigeria, and Democratic Republic of the Congo. In some of these
places, no infrastructure is in place to create the same kind of automated
buying, automated content, and so on. So we are trying to become very
granular about this and group different types of markets in different types
of stages.
If you go to Nigeria, for example, you have about 120 million mobile
phones. But only about 8 million of them are smartphones, and they still
have a relatively small penetration of Facebook; I think Facebook has
about 16 million users in Nigeria. But with 120 million phones, you have an
enormous opportunity for actually communicating in a space where
otherwise communication is not very efficient. That’s one we’re trying to
crack at the moment with the Nigerian team.
Do you also work with any VCs, open labs, or incubators?
Yes, we work with a company called KITE Solutions, based in San

Francisco. They’ve been helping us to identify new potential partners. With
the Internet of Things, for example, they have been very helpful in pushing
our thinking and opening a world that otherwise we wouldn’t have had the
right access to.

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Heineken Moves to Become a

Digital Lighthouse in the

We believe that we are in the early stages of unlocking the digital

We have decided to place a disproportionate focus on the commercial side

What are some of the digital innovations that you expect to

What changes are you making in your interactions with

In terms of customers, we are focused on three big things: changing the

In changing the way we work with existing customers, we are providing

How do you manage digital transformation within the legacy

Heineken is a very decentralized organization, where many decisions

Are your KPIs focused on the commercial aspect of the business,

So where are you with the change effort across different

Heineken operates in very diverse environments. We have a big business in

Do you also work with any VCs, open labs, or incubators?

Yes, we work with a company called KITE Solutions, based in San

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