Heineken’s CEO on Leading a 150-Year-Old Company
Part III: Managing for the long term
Sustainability boils down to a very simple fact: If I continue to do things that I do today, will I exist tomorrow? Is what I’m doing sustainable? Don’t I use too much water and energy to make my beer? Do we not use the wrong source of water supply to grow our agricultural produce, which will lead us in 20 years’ time to problems and no supply at all in the area where we are?
In balancing the short, medium, and long term, I think you have to spot the opportunities and map them. And say, "Well, what do I have to do so that the next 3 years are going to be great years? What, from 5 to 10 years? And what could be in 20 or 30 years?"
And so when we went on the acquisition trail, as we have been doing over the past ten years, some countries we acquired business in, like Nigeria, where we added to our existing business, was on a perspective of short and medium term. When we acquired our Mexican operation, it was a short and medium term. When we acquired India, it was a long view, if you will.
When we invested recently in a country like Ethiopia, it’s a long view. It’s at the very early stage of its development, but we think that Ethiopia in 20 years’ time is going to be a force to reckon with in Africa. So we invested there. So the next ten years, returns will be minute. In the first three years, we’re going to lose money in Ethiopia. But 20 years from now, Ethiopia might be as big as Nigeria is today. That is how you have to think about geographies as well as brands.
People have to embrace a product. They take it in their body, so it’s a very intimate relationship they have with food and bev. Remember, olive oil took 25 years to make it to our kitchen tables in northern Europe. And sushi, which is raw fish—I think our grandparents would have looked in total disbelief that we eat it.
The same goes with when you go out and you’re going to sell cider on the rocks to Brazilians or Mexicans. But take a look at 20 or 30 years, and then come back. That’s what you have to do also when you lead a business which is 150 years old and still planning to go another 150 years.