HEINEKEN USA innovates beers for the what and how
Maggie Timoney returns to US after 5-year stint with HEINEKEN Ireland
The U.S. beverage market increasingly is becoming more competitive. Among the beverage categories, no one category is that more true than the beer market. According to the Boulder, Colo.-based Brewers Association, as of 2018, there were 7,450 breweries operating in the United States. With so many beer options from which to choose, consumers understandably can be selective about the type of beers that they plan to drink.
However, not all need states are being addressed in the U.S. beer market. Recognizing the evolution of today’s beer drinker, White Plains, N.Y.-based HEINEKEN USA has made a concerted effort to develop products that fulfill consumers’ beer desires.
“At HEINEKEN USA we strive to achieve results by focusing on what we do and how we do it,” says Maggie Timoney, chief executive officer (CEO) of HEINEKEN USA. “Our goal is to be innovative in both the ‘what’ and the ‘how,’ across all our teams. We want to be entrepreneurial, fast and agile in order to end up punching above our weight.”
Timoney explains that even though parent company HEINEKEN N.V. is a global brewer, its U.S. subsidiary operates as a smaller player. This allows HEINEKEN USA to operate in a more nimble and agile fashion, she adds.
“In turn, we can be quick to market with innovation that drives sustainable competitive advantage,” Timoney says. “This is a key priority for HEINEKEN USA, and for me as a leader.”
The brewing throne
Timoney’s leadership with HEINEKEN USA comes at a time when the import brewer has seen increased competition not just from large-scale domestic and craft brewers, but other importers.
“While I have come to the U.S. at a challenging time for the beer industry, every challenge comes with opportunity,” she says. “We have spent the last few months focusing on what matters to us most and identifying the opportunities that will position the company for future sustainable growth.”
In June 2018, the company announced that Timoney would replace Ronald den Elzen, who returned to Holland for a global role within HEINEKEN N.V. At the time, Timoney was operating as the CEO and managing director of HEINEKEN Ireland.
“Maggie is a competitive and energetic leader who is known for inspiring teams, operationalizing plans and mobilizing organizations to deliver business results,” said Marc Busain, HEINEKEN Americas region president, in a statement at the time of the announcement. “She understands the challenges and opportunities that exist within the U.S. market and she has the right mix of strategic vision, people leadership and grit to ignite future growth for HEINEKEN USA.”
Shortly after the announcement of Timoney’s appointment with HEINEKEN USA, many mainstream news outlets were quick to pinpoint that she was the first woman to lead a major U.S. brewery. Although Timoney recognizes that this is a talking point, she notes that her gender will not be the legacy in which she’s associated.
“At the end of the day, I will be judged on results not gender,” she says. “I did not get this job because I am a woman. I got this job because I have left previous companies in a better place for having been there and that is what my job is today. I am a CEO that happens to be a woman, not a CEO because I am a woman.”
Although Timoney’s most recent stint was her five-year tenure at HEINEKEN Ireland, her career within the HEINEKEN family dates back 20 years, which helped prepare her for where she is today.
“I started with HEINEKEN in January 1998,” Timoney says. “It is not only my tenure as CEO of the Irish business that has helped me prepare for this role, but it is linked to so many experiences that I have had leading up to where I am today. Specifically, as CEO of HEINEKEN Ireland, I spent five years in a highly competitive market.
“Having worked across the globe, in the Netherlands, Canada, multiple times in the U.S. and Ireland, the learnings from leading different types of teams in a variety of cultures has diversified my skillset and honed my leadership skills,” she continues. “In my global role in Amsterdam I was fortunate to have the opportunity to be exposed to different cultures through working in many countries and markets; from Kazakhstan to Kenya. As a result, I learned and have an appreciation for the diversity of cultures and the beauty they bring.”
Although Timoney worked a good deal of her career abroad, her appointment with HEINEKEN Ireland actually marked a return home as she is a Ballina, Ireland native.
“One of the most interesting challenges for me was going back ‘home’ to Ireland, as I had only ever worked abroad and not in Ireland,” Timoney says. “For me, it was more the challenge of being away from Ireland for so long, and then showing up in my home country and leading the company. I felt somewhat American because I had worked in the U.S. for so long. Now I think I use this to my advantage; the team would often ask ‘which Maggie will show up today’ Irish Maggie or American Maggie.”
Although Timoney’s global career took her away from Ireland, the true challenge was addressing the competitive beer market for the European Republic country.
“A second challenge was bridging the gap between HEINEKEN (as the No. 2 player), and our No. 1 competitor who sold not only beer but wine and spirits too,” she explains. “There was a good stretch of runway between us. It forced us to think differently and embark on a growth agenda. We really played to win, worked hard every day to increase our share and decrease that runway to our competitor.”
Among the ways that Timoney and HEINEKEN Ireland accomplished this was entering new categories, such as hard cider, while growing brand share in the market.
“Well, we entered the cider category with Orchard Thieves in 2015 and ended up taking a nice piece of that market,” she says. “And, we have been able to continue to grow in both beer and cider without cannibalizing any of our brands. Also, developing and working hard on a culture that is both innovative and exciting not only in what we do but how we do it. I am equally proud of the results and the culture that helped drive that performance.”
A personal accomplishment that Timoney is proud to discuss is one that she shares with her family as a whole. “Beyond Ireland, I consider moving to different countries with my family, adjusting quickly, adapting both personally and professionally in different parts of the world as an accomplishment,” she says. “These have been wonderful experiences that have helped shaped me in to who I am today.”
Timoney also credits the leaders before her for helping her grow into the fair, direct, open and fun person whom she is today.
“I have worked with some great leaders, and I have worked with some not so great leaders,” she says. “You learn from both experiences. I remember a former HEINEKEN boss who took a chance on me and trusted me in different roles. In doing so, I was stretched, shaped and made to think differently to get results. With that experience came confidence. My advice would be to take chances on people early by giving them opportunities to learn and grow.”
As Timoney approaches her one-year mark since returning to HEINEKEN USA, she highlights that innovation has been a key focus for the import brewer this year.
“To kick off 2019, we released three innovations which have become new additions to our portfolio,” she says. “In January this year, we launched Heineken 0.0, an alcohol-free beer for people who want a beer for moments when they don’t want alcohol. Dos Equis Mexican Pale Ale (MPA), is a twist on a traditional Pale Ale that delivers a hint of spicy heat on the finish. Thirdly, Tecate Titanium, at 7.5 percent [alcohol by volume] (ABV), answers the more recent demand for higher ABV products.”
As Timoney and HEINEKEN USA look toward strengthening the import brewer’s position in the United States, the company elaborates how it is able to pinpoint the need states of the U.S. beer consumer and how fast it is able to turn those trends into products.
“Although HEINEKEN is a global company, we think and act like a small, nimble player and jump on market opportunities quickly,” said Jenna Behrer, vice president of innovation and activation for HEINEKEN USA. “We keep a close eye on emerging consumer trends and believe firmly that a market can be developed if you have the right product at the right time that meets a consumer need. We ask ourselves, what are the incremental drinking occasions when consumers are currently not drinking beer and what can we innovate to change that? These are opportunity spaces.”
Behrer adds that the innovations from the company are aligned to merge consumer trends with consumer need states.
“We identify ‘white space’ in the market and innovate in a way that fills that space with products for which we know there is (or will be) a consumer demand,” she states. “Will this address new consumer needs that aren’t already being addressed in the market? If so, then it adds value. We honor our legacy as a brewer and execute in a way that provides mutual benefit to our trade partners and ultimately the end user.”
As Timoney mentioned, HEINEKEN USA latest collection of innovations that hit the U.S. market are Tecate Titanium, Dos Equis Mexican Pale Ale (MPA) and Heineken 0.0.
One of the most headline-catching innovations was the release of Heineken 0.0. Behrer notes that traditional beer markets such as Denmark and Spain have seen growth within the non-alcohol beer segment, and the brewer expects that will be the case with the United States as well.
“This trend is arriving in the U.S, and we’re getting out early with a premium product to satisfy consumers who appreciate beer taste and want a beer for occasions when they don’t necessarily want to consume alcohol,” she says. “Heineken 0.0 is not a substitute for beer with alcohol; it’s an incremental opportunity. There are plenty of non-alcohol beers currently in the market, although few are premium and most fall short of authentic beer taste.
“Heineken’s Master Brewers created the new zero alcohol beer using only natural ingredients, resulting in a beer brewed for beer lovers, by beer lovers,” Behrer continues. “Heineken 0.0 disrupts the category and offers a new take on how people drink and enjoy beer, bringing for the first time a great beer taste to the non-alcohol space. This opens a world of opportunity for people to come together and enjoy a beverage that expands the drinking occasion.”
Identifying drinking occasions for a non-alcohol beer was vital in understanding the need state for the product in the United States. “What we’ve seen in markets outside the U.S. is that non-alcohol beer is being consumed during an incremental consumption occasion, say, 3 p.m. on a Saturday, when otherwise seltzers and sodas would be the beverages of choice,” Behrer says. “Now, beer drinkers can drink beer instead. This same opportunity and need is emerging in the U.S.”
Another valuable tool was identifying the consumer group that would embrace a non-alcohol beer, which Behrer notes is male and female millennial consumers aged 21-35. “While this same demographic is looking for higher ABV products, they are also looking for non-alcohol products,” she says. While non- or low-alcohol beer has historically skewed older, we are bringing Heineken 0.0 to a new generation for new occasions.
“We believe Heineken 0.0 will really revitalize the [non-alcohol beer] segment. Younger consumers will pay more attention to it and its credibility will grow,” Behrer continues. “Unlike existing non-alcoholic beers which are usually merchandised in a separate section in-store, we position Heineken 0.0 next to Heineken Lager where shoppers go to find premium imported beers.”
The other side of the beer spectrum is HEINEKEN USA’s Tecate Titanium. “Tecate Titanium delivers a bold yet refreshing taste that packs a punch,” Behrer says. “Its distinct aroma and flavor are the result of an obsessive and tireless brewing process that results in the high alcohol content but great drinkability.”
Featuring its 7.5 percent ABV, the new brew is an amalgamation of Mexican beer and higher ABV trends. “There is no brand that currently occupies this space,” Behrer says. “We saw this as a gap in the market where most of the high ABV options are non-beers, domestic beers, or hoppy crafts.”
Behrer adds that HEINEKEN USA develops products based on four need states and Tecate Titanium meets two of the four. “Me Time, which we define as enjoying a beer by yourself or with a significant other to relax and unwind; and Just Hanging Out, which is simply meeting up with or having a few close friends over to socialize over drinks,” she explains.
Designed with single-serve convenience in mind, Tecate Titanium is packaged in 24-ounce aluminum cans, which is what consumers are buying that segment, Behrer explains.
The growing influence of Mexican beer also played a hand in HEINEKEN USA’s other big innovation for 2019. Dos Equis Mexican Pale Ale (MPA) rolled out in early Q1 in Texas with later plans to expand to other Sun Belt states. However, the new brew got its first interaction with consumers as part of an incubator program within the on-premise channel.
“We developed Dos Equis MPA in collaboration with the sports bar distribution channel, as an interesante twist on a traditional and popular beer style. Beer drinkers who are looking for a bit of heat absolutely love it,” Behrer says. “With the use of citrus hops and peppers, MPA takes the Pale Ale brewing process and adds a Mexican twist that delivers its fresh, spicy taste. The sports bar channel is a playground for Mexican Import enthusiasts as well as craft drinkers to experiment with new brews. MPA offers us a perfect opportunity to engage with beer lovers who are looking for an interesting play on tradition.”
Behrer notes that Dos Equis MPA was developed with the Just Hanging Out occasion in mind. “We see an opportunity to gain share among IPA consumers who are gathering with friends and family and want a familiar style with an interesting flavor twist,” she says.
Given the success of Dos Equis MPA, Behrer says the incubator program could player a larger role in the import brewer’s future. “Brands are discovered and built on-premise,” she says. “With this insight we were able to quickly gain trial of a few different versions and monitor consumer reaction that lead us to the recipe we’re using currently. It was a very helpful process that gave us the opportunity to get both the product and brand positioning just right.”
As HEINEKEN USA looks to the future, the team remains optimistic about the innovations it created to pave its latest path.
“We think Heineken 0.0 is the start of something exciting,” Behrer says. “It gives us the opportunity to look beyond beer and other traditional segments, and beyond me-too products. Our innovation will always address unserved needs in the market in ways that will surprise and delight but are also grounded in what consumers want now and what they’ll want in the future.” BI