By Chew Xiang

SOMEWHERE in the hidden fantasies of large swathes of the male population is the thought that, you know what, wouldn't it be really really cool to work for a brewery? You could have beer on tap, as much as you want, whenever you want. You could call a lunchtime tipple (or three) 'product research'. And right outside your office you'd have a beer counter with the bottled stuff chilled to a precise 3 degrees Centigrade and draught beer fresh and foaming from the keg.

As is the case at Heineken's Singapore office, where I met their global chief executive officer Jean-Francois van Boxmeer one rainy December day. They really do have a small bar with draught and bottled beer chilled to a precise 3 degrees Centigrade. But Mr van Boxmeer shatters a little of the fantasy. He is drinking coffee and water, to ward off the effects of a 13-hour flight from Amsterdam, where he is based, to Singapore, where he comes for regular board meetings with Fraser & Neave, Heineken's South-east Asian partner of almost eighty years.

Together, they own Asia Pacific Breweries, one of the largest in the region, and when he visits in early December, both companies have just wrapped up a complicated three way deal with Indian tycoon Vijay Mallya's United Breweries.

They have been at odds since Heineken took control of British brewer Scottish & Newcastle in a £4.7 billion deal two years ago. Buying Scottish & Newcastle gave Heineken a leadership position in the UK and much of Europe, but also a 37.5 per cent stake in United Breweries, India's largest beer producer. (It owns the Kingfisher brand and recently launched Kingfisher Airlines there.)

The Scottish & Newcastle deal didn't sit too well with UB, because APB was a big competitor in India. Lawsuits on both sides were filed but the dispute was finally resolved. Heineken would carve up its empire. APB was given controlling interests in Indonesia's Bintang beer, as well as a leading New Caledonian brewer. In return, Heineken bought over APB's interests in India and merged them with UB. 'It's a huge country but a rather small beer market - they consume only 1.3 litres per head per year, but it's also a promise of growth,' says Mr van Boxmeer.

Since we met in December, Heineken has again filled its shopping cart, this time buying the beer-making operations of Mexico's Femsa Cerveza in an all-share deal valued at US$7.7 billion. Femsa now becomes Heineken's second largest shareholder, with a one-fifth stake, but Heineken gets in return access to the rapidly growing Latin American beer market, maintaining its position among Hispanic beer drinkers in the US (and also some 150 million euros a year in cost savings).

Like many CEOs, he is careful not to dignify the competition by naming names but the past few years have seen a number of massive mergers and acquisitions in the beer industry - the biggest was the 2008 deal that saw InBev take over Anheuser-Busch for more than US$50 billion. Heineken teamed up with Carlsberg to buy Scottish & Newcastle and in 2005, a deal worth US$3.3 billion created Molson Coors through the merger of Molson and Coors, which then got together with SABMiller to form MillerCoors, which is a conglomeration of their US interests.

All that wheeling and dealing means that Heineken is not now among the biggest global brewers (the two biggest are Belgium-headquartered Anheuser-Busch InBev and London-based SABmiller, with Heineken and Carlsberg some way behind; the big four have half the global market for beer). But getting to the top is not its purpose, says Mr van Boxmeer. 'Our strategy is to remain in the top league. It's not to remain in the number one or number two. In the niche of premium international brands, we want to stay number one in the world. And in each market, we want to be number one or number two.'

He explains why this makes sense. The top brands have a lot of loyal followers, and so can command a premium. Beer tastes seldom shift drastically. It's better to be number one in a few profitable markets, than to be number three or four in dozens of unprofitable ones, he says. Europe still makes up the vast majority of the company's sales and is proving a reliable cash cow. 'To invest in a brewery, it's a very capital intensive process, they are not very different whether you build them in Vietnam or Seville (in Spain). You have to invest more than a year of your turnover in just stainless steel equipment. The difference is that the price in Spain is going to be twice as high, so the return on the invested capital is still very interesting,' Mr van Boxmeer says.

But the company needs to grow its margins and to do that it needs to bulk up its presence in emerging economies, a challenge Mr van Boxmeer has taken on since he was made CEO in 2005. In 2008, the last year for which full results are available, the company earned 209 million euros on sales of 14.3 billion euros (S$28 billion) - the revenue bit was 27 per cent higher than 2007, but profits were down almost 75 per cent. Beer consumption in the developed part of Western Europe is stagnating, he admits, and unfortunately that's just where Heineken is strongest. Besides the short term effects of a deep and dark recession (and even, he notes, the effects aren't uniform; Heineken's market share is climbing in France), the medium term worry is that 'population growth is working against you', he says. Beer drinking peaks between the age of 18 and 35, and the resident population of mature Europe is ageing rapidly.

Then, immigration to Europe is 'essentially Muslim, contrary to the United States, where the population growth is led by immigration, but it's Asian and Mexican, and there the uptake of beer is better than the western part of Europe,' he says, though for Heineken, the US hasn't been so rosy, with consumers there downtrading from the premium brands.

So finding (and making good on) promise of growth in the emerging markets is Mr van Boxmeer's main strategy. He is well suited to that, given that he spent the early part of his career at Heineken in Africa - he spent ten years there, in all - and then was sent to Poland, in the mid-nineties, just after the fall of communism created a huge new audience for beer.

'The business case in those ex-Soviet countries was very simple. These people once drank a lot of spirits, essentially vodka. In 10 years they shifted their consumption to beer. In the old generation beer was associated with a better future, it was a lighter drink, and so that was really a good time,' says Mr van Boxmeer.

Africa was also significant for him, but for different reasons. 'Looking back at my African experience, it has been a very rich experience on the managerial side, and also the human side. You learn a lot and that shapes you and professionally. I always say that Africa is very good training ground. It's like doing a PhD from Harvard Business School in a condensed way because in these emerging markets you will tend to have more responsibilities earlier on.'

That is invaluable, he says, and which could explain his enthusiasm for the emerging market strategy, though the more immediate impact, you sense, is on the way he manages his company.

'In Africa, we went through events which from time to time were very spectacular and violent, for sure, but that I don't think is what most shapes you. It's that from very young you have to command people. In the West, we are reluctant to give responsibilities to people early on. In Africa, by design, you immediately find yourself having to explain to 50 people what they have to do.

'And in every culture, if you don't motivate people by explaining why they have to do that and what is the reward of doing that, it's not going to work. Even in very hierarchical cultures where people respond to authority much more than in Europe - because in Europe people don't respond to authority any more - don't make the mistake that you never have to explain to people the 'why'.'

That's particularly important in the beer trade, because although we think of and hear of the big international brands (like Heineken), much of the company is actually about local brands, brewed where they are drunk, brands with sometimes decades of history and culture and traditions. That has to do, he says, with the fact that beer traditionally didn't travel well, until the advent of the refrigerator. Even now with advances in technology making it easy to transport beer (or to brew it where you need it) those in-built cultural preferences are hard to overcome. 'The Heineken brand in our company is less than 20 per cent the total volume, so more than 80 per cent is made from local brands. We have 230 of these brands across the world,' Mr van Boxmeer says.

But local brands require local expertise to handle. This means Heineken is extremely decentralised. Its country operations have a lot of leeway to plan their operations. 'The Heineken brand is rather centralised,' says Mr van Boxmeer, 'but all the other 230 brands are local treasures. They have to be managed and guided from their culture, where they belong. There is no way you can control the brand management of Tiger Beer from Los Angeles.'

The company takes a portfolio approach to its brands - it places them into markets, differentiated (largely) by price. In the UK, for instance, Tiger Beer - which is coffeeshop brew in Singapore - is marketed as a premium brand. 'It has exotic appeal and which has to be sustained with a premium price. The higher the price, the better it's going to be,' he chuckles. 'And it works well, I have to say. This is the opportunity of being a portfolio company.'

While Heineken occupies the prime space on the rack, the aim of the other 230 brands is to be among the top beers in their respective markets. 'What you're trying to do is to make your drink the drink of choice, and while you are there, to make your brand the brand of choice. And whether your brand is Heineken worldwide or Tiger in Singapore or Star in Nigeria or Christal in Chile, the beer brand has always to stay relevant, people have to love it,' he says. How do you ensure that? Lots of marketing dollars, for one, but also a conscious effort to put branding at the front of the company. 'You have a very intimate relationship with your beer. That is something that everybody at the company has to care for.'

He's keenly sensitive to the importance of a local touch. The way he describes it, his job as a CEO isn't really a management job, because there's no call for him to interfere in any or all of Heineken's many local partners and subsidiaries.

'The higher you go, the narrower your band of influence becomes. And what you have to become is the most predictable as possible,' Mr van Boxmeer says. 'You have to give people very clear directions where you want to go with the company, you have to tell one story, a clear story, that people can support.' And then, repeat that story to all and sundry, including journalists.

'I'm there to motivate people,' he says, which is the prime reason for his frequent travels to visit local Heineken outfits. It seems almost like a rock star lifestyle - to be shunted from city to city to give a performance, then be hustled back onto the plane for the next stop.

'I'm totally exhausted, because you go from one place to another, they prepare you a programme which leaves you five hours for sleeping,' he laughs. 'For the rest you have to do a lot, listen and remember the name of this, that or the other. When you leave, they will sleep for the next two weeks, and you got to go to the next city where they are fresh, they have prepared themselves for two weeks, they are going to use you, leaving you with 5 hours sleep then they put you on the plane and then send off again.'

He laughs again, because he realises he doesn't seem particularly tired, despite the long flight from Europe. 'I am physically tired but absolutely loaded in terms of battery and energy, there is an exchange of energy there that you have between your people and myself.'

He is clearly in great spirits, joshing some of the local staff, and later when having his picture taken for this newspaper, playing around with Heineken's signature draught kegs. What a performer.

This article was first published in The Business Times.