USA: Heineken to cut US workforce by 15%

The US division of beer giant Heineken has announced that it will be cutting its workforce by 15%, stating that the restructuring would “enable more efficient ways of working”, The Drinks Business reported on February 28.

As reported by Brewbound, spokesperson for Heineken USA, Bjorn Trowery, confirmed in a statement that the company was making job cuts.

He said: “We are modifying our sales team structure to align with our strategy and to enable more efficient ways of working.

“This will help Heineken USA be more cost effective, and allow us to reinvest behind our brands and business in the US. While change that impacts our people is always difficult, we believe these changes will better position Heineken USA for the future.”

Trowery also told the news site that Heineken was “actively” seeking “new opportunities” for those members of staff who are losing their roles.

In October last year, Heineken-owned brewer Lagunitas made over 100 employees redundant –12% of its workforce – in the wake of what it called a rapidly evolving and “more challenging” market.

Other big beer companies to have made cuts in recent months include AB InBev, MillerCoors, Constellation Brands and Pabst Brewing. Constellation Brands also recently confirmed rumours that will sell or discontinue up to 40% of its wine and spirits portfolio in order to focus on its “power brands” that retail for over $11.

Other American breweries that have made job cuts recently include Oregon-based Deschutes, the 10th largest craft brewer in America, which laid off 10% of its staff after planned growth failed to materialise.

According to recent figures released by US trade group the Distilled Spirits Council, in 2018, spirits continued to gain market share at the expense of beer and wine, rising by 0.7% to 37.4% of the total alcohol market. The trade group revealed that in the past 20 years, beer’s US market share has fallen from 56% to 45.5%, while spirits and wine have increased their reach, rising from 28.2% to 37.3% and from 15.8% to 17.2% respectively.

In spite of the job cuts, Heineken has made a number of acquisitions over the past year. In June 2018, London craft brewer Beavertown sold a minority stake in the business to Heineken for £40 million. In August the Dutch beer giant also confirmed rumours that it was to acquire a 40% stake in China Resources Enterprise, the parent company of China’s largest brewer, for HK$24.4 billion (US$3.1 billion).

Heineken has also been investing heavily in the low and no-alcohol sector with Lagunitas releasing a non-alcoholic sparkling water last year and Heineken 0.0 unveiled in 2017.

01 March, 2019