Heineken challenge to close the distribution gap in China

A Bernstein analyst argues that Heineken still does not succeed to get its distribution right in China. He sees this as the biggest challenge for the new CEO, Dolf van den Brink. The analyst is basing his arguments on a survey made by Bernstein that shows Heineken distribution in the key premium restaurants channel limited to Chengdu, Hangzhou and Shenyang, all three being strongholds of China Resources Enterprise (Heineken joint venture partner in China) and should therefore represent the “lowest hanging fruits” for the company. Nevertheless, Heineken penetration seems to be behind its competitors – in Hangzhou, the region with the highest penetration for
Heineken, 45% of restaurants list the brand, while AB InBev is mentioned 55% of the time and Snow, China Resource beer, is mentioned 65% of the time. In the other regions the situation is worse.

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