Heineken investors have reason to raise a glass at last, after the Dutch brewing multinational named JDE Peet’s boss Rafael Oliveira as its next chief executive and chairman.
Tuesday’s news was greeted by a 4.6% jump in Heineken’s share price on the Amsterdam exchange and a flurry of excitement from market analysts as the six-month search for Dolf van den Brink’s successor concluded.
Oliveira is set to join the company on 1 October from JDE Peet’s, where he has driven a swift turnaround over his 17-month tenure as CEO. Following its acquisition by Keurig Dr Pepper, he had been pinned for the top spot at the conglomerate’s planned Global Coffee Co spin-out.
Analysts’ positive reaction centred on this success, with parallels drawn between JDEP’s €500m cost-saving and productivity drive, and Heineken’s own €400m-€500m cost-cutting exercise, dubbed EverGreen 2030. The plans are set to reduce jobs by between 5,000 and 6,000 globally amid criticism over the company’s productivity and operational efficiency. Heineken’s share price has fallen 29% over the past five years.
Oliveira will be Heineken’s first-ever CEO to be appointed from outside its own ranks. His appointment was stamped with the approval of Heineken’s controlling family shareholder in a rare statement.
“[Oliveira is an] experienced fmcg leader with proven ability to simplify complex portfolios,” said Barclays analyst Laurence Whyatt. “He brings the strategic clarity, operational discipline, and capital markets credibility needed to accelerate Heineken’s EverGreen 2030 plan.
Within 100 days at JDEP, Oliveira had set out a plan for “decisive” cost-cutting action, including factory closures, organisational delayering and centralisation – Whyatt called the swift action the “strongest argument” supporting the appointment.
“The key takeaway is not the strategy itself, but the speed and clarity with which he imposed structure on a previously diffuse organisation.”
Oliveira may tweak the plan, but “don’t expect big changes”, according to Bernstein analyst Trevor Stirling. “From our perspective, delivering something that is 80% or 90% right is much more important than delaying in pursuit of perfection.”
Some analyst caution remained over the appointment, however, thanks to Oliveira’s relative inexperience in the top job. His appointment at JDEP was his first as a global CEO and followed 10 years at Kraft Heinz, where he worked his way up to president of the group’s international markets division.
But Stirling noted Oliveira’s long financial experience to back up his leadership credentials, adding Heineken had “definitely broken the mould” by appointing a former banker as CEO.
Prior to joining Kraft Heinz, Heinekein’s new chief worked for 10 years at Goldman Sachs; before that, he spent six years as a sell-side analyst in Brazil.
“There is much to like in Rafa’s background,” Stirling said. “We hope he is as successful as his better-known Spanish namesake.”
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