By Simon Zekaria
LONDON--Dutch brewing giant Heineken NV (HEIA.AE) hopes to reach untapped audiences in emerging markets through its sponsorship of the Olympic Games this summer, as well as driving share gains in the U.K.
Heineken's sponsorship and marketing chief, Hans Erik Tuijt, told Dow Jones Newswires that the Olympics present an opportunity for the company to align itself with a global event.
"In big cities, where big events are, we want to be part of the conversation," he said.
The world's No. 3 brewer by sales is a sponsor for the Olympics for the first time this year, with sole branding for its flagship premium lager.
While the Olympics typically attracts domestic tourists, analysts expect this year's games to draw more foreign visitors than usual, including from India, China and Russia, as well as being broadcast around the world.
Global brewers are increasingly pushing into emerging markets to cash in on rising incomes and a growing desire for Western brands. But debt-stricken Western Europe remains Heineken's core market, generating 35% of its operating profit in the region, compared with 8% for Anheuser-Busch InBev NV (ABI.BT) and about 1% for SABMiller PLC (SAB.LN), according to Sanford Bernstein.
Heineken and rival Carlsberg A/S (CARL-A.KO), which generates 50% of its operating profit in Western Europe, are seen as over-exposed to the region, where a dire economic situation is pressuring consumer spending, according to analysts.
But the brewer is also aiming to rebuild its brand in the U.K., which, alongside Germany, is Europe's main beer-drinking market. In February, Heineken said its fiscal-year U.K. beer volumes slipped 2.8%, even as it made share gains. Beer volumes in Western Europe fell 1.8% in the first quarter.
"We are still re-branding Heineken in the U.K. That takes time," Mr. Tuijt said.
Amsterdam-based Heineken sponsors other blue-riband sporting events including the UEFA Champions League, Europe's highly lucrative club soccer competition, which also has a huge global appeal.
Mr. Tuijt said Heineken only has eyes for club soccer, even if the UEFA European Championships and FIFA World Cup, each running on alternate four-year cycles, also attract huge audiences.
The larger roster of sponsors, as well as the limited frequency and duration of the competitions dilutes impact and makes it difficult to stand out, he noted.
"For the [European Championships], if you ask consumers in the U.K. who is the sponsor and ask someone in Germany or Spain you would get different answers. If you ask people around the world who is the sponsor of the Champions League, 52% of beer drinkers say it is Heineken, which is a massive number."
Write to Simon Zekaria at firstname.lastname@example.org
(END) Dow Jones Newswires
June 22, 2012 06:17 ET (10:17 GMT)
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