Published : Aug. 6, 2012 - 19:55
Local chief says Dutch brewer aims to appeal to specific tastes of Korean consumersIn a market where products quickly fall in and out of favor, Heineken Korea has kept its foothold by keeping things fresh and interesting.
“Our strategy is to keep (consumers) excited about the brand,” said the multinational beer company’s local division head, Jan Arie Smit, in a recent interview with The Korea Herald in Seoul.
The Dutch beer brewer has operations in around 178 countries, according to its official website. In addition to its representative brand, Heineken, it has an expansive brand portfolio that includes Amstel, Dos Equis, as well as joint ventures with other breweries, such as Asia Pacific Breweries and others.
According to Smit, who serves as the general manager of Heineken Korea, the domestic premium beer market is small compared to other countries.
“The premium beer market in Korea is (about) 4.5 percent, (but) on average in other countries it’s about 15 percent,” the Dutch businessman said.
So in this small marketplace, local and international brands jockey for space, according to Smit.
“Especially during the past five to 10 years, (top sellers are) always changing, and brands are coming and going,” he said.
Currently, Heineken Korea does not operate a brewery in the country, nor does it have any plans to build one in the near future, because the volume sold in Korea “is not enough to warrant” building one, he said. So the company currently acts mostly as an importer and distributor in the Korean marketplace.
But the Netherlands-based brewer has been in Korea for approximately the past 30 years, and has managed to retain its customer base, unlike some one-hit wonders, due to its focus on marketing campaigns and active pursuit of sponsorships, according to Smit.
These include the recent electronic music dance festival “Heineken Sensation 2012” as well as other cooperative measures with other companies and brands, Smit said.
“We’re busy planning general (themed) marketing campaigns such as James Bond, and other platforms suited to our brand,” he said.
Heineken Korea is especially interested in pursuing long-term sponsorship relations, so some of the previous campaigns may return next year, according to Smit.
These campaigns must tap into the Korean mindset of looking for innovative, new, and exciting elements, he said.
Paying attention to product design can help appeal to Korean consumers as well, according to Smit. The company, for example, introduced limited edition bottles last year that were very popular with the consumer set, the beer executive said.
Domestic consumers these days look for special “experiences,” when choosing beers, Smit said.
Jan Arie Smit. (Kim Myung-sub/The Korea Herald)
In the past, Koreans tended to drink a lot of beer at bars and restaurants, due to the culture of going out frequently for dinner, according to Smit.
“In (my native) Europe, I would go out for dinner maybe twice a month. But (from my personal observation) it seems like Koreans go out about four to five times a week,” he said.
In these scenarios, women also play a large role in affecting beer consumption trends at bars, according to Smit.
“The women (consumers) are the trendsetters. They are decisive in their choice of beer for men,” he said.
So when a couple is at a bar, he explained, the male customer tends to order and drink whatever his girlfriend or wife orders.
But these beer consumption styles are changing somewhat, because Koreans are taking more of an interest in cooking, the general manager said.
So right now consumers are looking to pair beers with special cuisines that they prepare at home, according to Smit.
On the other side of the spectrum, there is a growing trend toward beer consumption outdoors, he said.
This applies to camping grounds and sites, so “the 5L keg is a fast-growing product in Korea,” Smit said.
Smit said that Heineken Korea also keeps an eye on appealing to the specific taste buds of Korean consumers by keeping the right product portfolio.
Heineken Dark Larger, for example, has a distinctive taste, so it is not very popular in many countries. But Koreans respond positively to the product, so “Korea is (currently) one of the only countries in the world where it is sold,” he said.
The Dutch are travelers, and this travel-oriented mindset helped the company expand its business from its small beginnings in 1873 to become one of the premiere international brewers in the world, Smit said.
The Dutch beer executive, who is currently the sole foreigner at the branch’s local headquarters in Daechi-dong, southern Seoul, said that he tries to keep this open mindset while at work every day.
“I’ll most likely stay another two years or so, but I think Heineken Korea doesn’t particularly need a foreign general manager (any more),” Smit said.
From his perspective, the Korean workforce is becoming well-equipped to handle business operations for foreign companies as well.
It can also be cheaper to have a local CEO if they have the right qualifications, Smit said.
But for now Smit plans to stay put in Seoul, as the workplace culture that he was first drawn to is still present at the Korean office.
When he first started his career at Heineken’s Dutch headquarters about 13 years ago, “what I felt at the time was that I really liked the people culture at the office,” Smit said.
People at the office had a positive mindset and there was a culture of trust, so “I (thought) I would love to work hard for (this company),” he said.
He has been working at Heineken International B.V.’s divisions ever since.
By Renee Park (
renee@heraldcorp.com)