The Heineken Story: The remarkably refreshing tale of the beer that conquered the world

Prologue

On a drab winter’s day several years ago, the head office of the Franzen Hey & Veltman (FHV) advertising agency just outside Amsterdam was in a state of unusual agitation. Two of the agency’s directors, Giep Franzen and Tejo Hollander, were peering nervously out from the hallway through the drizzling rain, watching an unusual convoy glide up to the entrance.

At the back of the middle vehicle, a huge armoured Bentley, sat Alfred ‘Freddy’ Heineken, the man who held the Heineken beer empire in his hands. His limousine was sandwiched between the heavy cars of the ‘boys’ who accompanied the brewer ever since he had been kidnapped in 1983. The previous day three of them had thoroughly inspected the FHV building, searching the room where Freddy was to view two proposed adverts and even checking the projector for potential firing devices.

The team at FHV had prepared the forthcoming pitch down to the last detail. They didn’t waste much time on introductory presentations because they knew that Freddy couldn’t be bothered to listen to them. On the eve of such nerve-racking events, it was the guest list that topped the agenda. ‘From experience, we knew that Freddy liked to make a show of his power by taking shocking decisions. And the bigger the audience, the more irrepressible the urge’, one of them explained. ‘So the trick was to keep the invitation list as short as possible.’

Although many hard-boiled entrepreneurs walked through the agency’s corridors, Freddy’s twice-yearly visits always made the ad-men jittery. They esteemed the mercurial tycoon highly for his instinct for advertising and his creativity. ‘It never ceased to amaze us. Inevitably and instantly, he always picked the best lines’, said Marlies Ponsioen, a former Heineken account manager at FHV. But Freddy’s disciples also knew that his unpredictable mood swings could be devastating.

Allan van Rijn, the man who directed FHV’s Heineken adverts at the time, knew precisely how Freddy and his ad-men operated. He explained that in preparation for Freddy’s visits ‘the receptionists all had their hair done, the mess was cleaned up and the managers wore their best three-piece suits. After all, their mortgages were at stake. Then Freddy stepped out of his limo with a crumpled suit and he walked straight through all this bullshit.’

Freddy himself liked to recall that his legendary affinity with advertising was inspired by a school trip to the Philips lighting and electronics group in Eindhoven. ‘They didn’t sell light bulbs; they sold light’, he explained. Since he returned from an eye-opening two-year traineeship in the United States in his early twenties, the grandson of Heineken’s founder had meticulously constructed the brand’s identity so that it appealed to consumers throughout the world.

As planned, the diminutive tycoon arrived early in the afternoon. After a couple of handshakes in the hallway, he was ushered into the plain meeting room on the first floor of the FHV offices, which had a projector concealed behind a one-way mirror on one side and a screen on the other side.

As the lights went out and the curtains were drawn, all those present turned discreetly to Freddy Heineken and anxiously scrutinised the deep grooves in his bulldog-like face. The slightest tension on his lips, the merest hint of a frown – even the way he puffed at his seemingly never-ending ultra-light cigarette – could be an omen of a forthcoming disaster. After all, Heineken was one of the most avidly watched accounts in advertising, and Freddy ruled over it with the tyrannical edge that characterised his entire leadership.

Since he had regained his family’s majority share in Heineken in his mid-twenties, Freddy ruled over an efficient brewing group that made a crisp lager. This he transformed into a brewing group with an unrivalled international scope, all the while keeping watch in an almost paranoid fashion over the sprawling business, and the brand’s reputation in particular.

Few outside the Netherlands realised that Heineken was the name not just of a beer but also of the uncrowned king of the Netherlands – an extravagant yet utterly ordinary billionaire, who could be both irresistibly charming and outrageously vulgar. Reviled by some, he was hailed by others for turning a relatively bland beer into an iconic global brand.

Freddy had a few strict rules for success. Only in the United Kingdom did Heineken deviate from its recipe – in more ways than one. Yet even there Freddy Heineken was much lauded for supporting a whimsical advertising campaign that became iconic and placed Heineken at the forefront of the Lager Revolution.

FHV and Heineken’s advertising staff had spent about three months and 1.2 million guilders on the commercials to be screened by the magnate. Replicating an earlier concept, they consisted of short, fast-cut film fragments accompanied with fitting soundbites – for instance, there was a glass of beer that whooshed across a bar to the sound of a roaring engine.

‘Again, Mr Heineken?’ Franzen inquired gently when the reel stopped. Because normally, when Freddy liked the commercials, he smiled contentedly and asked to watch them again. But this time the chairman looked hideously under-whelmed. ‘Not funny at all’, he grumbled – and that, in Heineken’s vocabulary, was tantamount to a death sentence. ‘It was like a volcano erupting in our faces’, said one of the participants. ‘There was stunned silence. All of us turned white. We knew it would have been completely pointless to protest.’

The shocked ad-men only found out several weeks later what it was that had offended Freddy: a short sequence with two dogs smooching under bar stools. It was meant to be a little edgy, but in retrospect even the director acknowledged that Heineken had been right. ‘Before the presentation Freddy had probably had a drink in a bar in Amsterdam with Joe Bloggs’, said Van Rijn. ‘He knew the guy who handled the projector at the agency even better than the directors. That way he could tell, without fail, how the general public would react.’ As often in such cases, the dust quickly settled. The shot with the drooling dogs was edited out, and the adverts were used. Again Freddy Heineken had got his way, and with the briefest of comments.

Over the previous years Heineken had made headlines for reasons ranging from his eye-catching billionaire toys and adventures to his royal friendships and spectacular kidnapping. But when it came to his company, Heineken proved relentless and utterly consistent. He was the man behind the extraordinary story of Heineken, made of adventurous deals, clever marketing and just the right amount of froth.

1

All or Nothing!

Alfred ‘Freddy’ Heineken, the Dutchman who built up the brand after the Second World War, often acknowledged that his fortune started with his family name. Had there been a computer program to think up ideal beer brands, it might well have come up with ‘Heineken’. Like many other popular beers, the name has three syllables, sounds friendly and has a Germanic ring to it that brings to mind ancestral brewing traditions. Small wonder, since the Dutch beer’s name is German.

The name can be traced back to Bremen, the Hanseatic port city in northern Germany. Well established in the town, the Heinekens boasted their own coat of arms, split by a vertical line with a lily on the right-hand side and an open hand on the left. But in the eighteenth century several Heinekens settled in the Dutch Republic, a country famed for its prolific trade as well as its progressive attitude to science and religion. Two generations later, the immigrants had made it to Amsterdam, where they ran a prosperous and very Dutch business: Gerard Adriaan Heineken, the brewery’s founder, was the son of a butter and cheese trader.

In the mid-nineteenth century, when Gerard was growing up, Amsterdam appeared to be in a state of advanced decay. Crumbling houses and the overwhelming stench that rose from the canals spoke to the decline of a city that, just two centuries earlier, had been one of the most buoyant ports in Europe. Since then, the sea trade that had made Amsterdam rich had been taken over by the English and the French. Fuelled by the Industrial Revolution, England, Germany and the United States underwent huge economic expansion that left the Netherlands behind. The four Anglo-Dutch wars between 1652 and 1684 had drained finances and further undermined Amsterdam’s influence. Almost half of the city’s people were registered as indigent and destitute.

The Heinekens lived in relative comfort. The cheese trade had been deftly built up by Gerard’s grandfather and expanded with equal drive by his father, Cornelis Heineken. The household became even more affluent when Cornelis married Anna Geertruida van der Paauw. A plump widow, she brought to the marriage two children and the fortune amassed by her previous husband’s family in West Indies plantations.

Cornelis and Anna went on to have four children. Their second, Gerard, born in 1841, was their first son. At this time epidemics ravaged Dutch towns, and only three of the family’s children made it to adulthood. They were brought up to honour hard work, and Gerard grew into an industrious young man, ‘with a sense of adventure and a good heart’. When his father passed away in 1862, Gerard, then just twenty-one, could easily have spent the rest of his days living from the family fortune. Instead, he left the cheese trade to other family members and searched for a way to make his own name. In June 1863 he spotted a brewery for sale not far from the family home. Gerard quickly organised a meeting with two of the brewery’s directors, and that same evening he wrote an urgent letter to his mother asking for her financial assistance.

Den Hoyberch (The Haystack) had once been a prominent brewery – among the largest in the Dutch Republic – but it had been in sharp decline for several decades. Gerard knew little about brewing, but he was certain that he could revive the Haystack’s fortunes. So he proposed taking over the brewery entirely. ‘All! Or nothing! Otherwise it would be a waste of time!’ he wrote to his mother.

Anna Geertruida had her own reasons to provide her son with financial support. Towards the middle of the nineteenth century gin had become the Dutch drink of choice (as it had in London). It was causing unsightly spectacles in Amsterdam and misery for hundreds of Dutch families. Every Sunday morning, as she set off to church, Anna Geertruida had to negotiate the gin-soaked drunkards who stumbled around the streets swearing. If her son managed to produce a clean and reliable beer, he might encourage drinkers to relinquish their destructive liquor.

With his mother’s support, Gerard Heineken pursued negotiations for the takeover of The Haystack. The brewery was formally registered as Heineken’s property on 15 February 1864, when Gerard established Heineken & Co.

Gerard Heineken’s faith in the prospects of The Haystack pointed to remarkable optimism, because the brewery was in a parlous state and brewing was often an unrewarding business. The production of beer required substantial financial investments, while at the same time the chemical processes involved were little understood, making the results unpredictable.

The Haystack dated back to June 1592 – a time when beer was the people’s drink, used to wash down breakfast, lunch and dinner. Relatively cheap, in the Netherlands beer was not only drunk by adults at a rate of about 300 litres a year, but also by children (the country’s budget included tax revenues based on consumption of 155 litres per year for each child less than eight years old). This had much to do with the insalubrity of medieval water: it was pumped from the ports and canals, which also functioned as open sewers. Brewing methods were not especially clean either, but the heating process eliminated at least some of the germs. In those days, there were scores of tiny breweries in brewing towns such as Gouda and Delft.

In the seventeenth century, however, hundreds of such family outfits ran dry, as former beer drinkers switched to wine. ‘Even the brewers drank wine when they congregated to discuss the downfall of their business’, one historian lamented. This decline accelerated towards the end of the seventeenth century, when the Dutch discovered jenever, a sort of gin, as well as coffee and tea. While distilleries sprang up, hundreds of breweries like The Haystack drowned.

Gerard must have inherited some of the family’s trading acumen. He had barely settled in his office before he sent out scores of letters to clients and relations. Brimming with self-confidence, Heineken not only pledged to supply a clean and safe brew but also promised to take back any batches that turned sour. Almost instantly, Gerard’s beer started spreading like yeast gone wild. Just twelve months after the takeover, annual sales of The Haystack’s beers had roughly doubled to 5,000 barrels.

Gerard was exporting a few batches to France and the Dutch East Indies, the Dutch colony that would become Indonesia, but he chiefly strove to establish Heineken’s reputation in the Dutch beer market. A forward-looking young man, he was particularly interested in new techniques that would allow his workers more control over the brewing process. The invention of the thermometer in 1714 and of the hydrometer (a device for measuring a liquid’s relative density) in 1780 had made brewing more scientific, and brewing was industrialised in the second half of the nineteenth century, with steam power used to heat mixtures of malt, water and hops.

Gerard was eager to use all of these technical advances in a much larger brewing plant that would be able to produce a greater volume of beer as well as house these novelties. Less than two years after he acquired The Haystack, the fearless brewer acquired a plot of land in the outskirts of Amsterdam (now the Stadhouderskade, in central Amsterdam, where the Heineken museum stands).

When the Heineken brewery was inaugurated in 1867, workers predicted the demise of hard liquor: ‘No longer shall intoxicating spirits be our people’s drink. No, Holland’s beer shall always accompany our dishes, either large or small.’ The imposing red-brick building was geared towards a fast-growing market. The use of a star on the labels of beers made by Heineken probably dates back to that year, when Gerard opened an establishment called De Vijfhoek (‘The Pentagon’), with a star hung above the entrance.

As Gerard still lacked brewing expertise, he recruited a German head brewer, who joined Heineken & Co. in 1869. Wilhelm Feltmann Jr stirred the brew with stubborn dedication, but he could be equally intransigent with his colleagues. In a letter to Feltmann, Gerard even expressed the hope ‘that you will moderate your short temper and not throw any employees out of the window’. Feltmann’s impulsive attitude later triggered explosive conflicts in Heineken’s board, but the improvements brought about by the German brewer bolstered sales and proved invaluable. Gerard was equally relentless when it came to sales.

It was at this time, while he was working hard to establish the brewery, that Gerard met Lady Marie Tindal, the descendant of a long line of military officers originating from Scotland. Mary, as she liked to be known, owed her title to her grandfather on her father’s side. A man of Scottish origin, Ralph Dundas Tindal was elevated to the rank of Baron de l’Empire on the back of military services rendered to Napoleon. Mary’s father, Willem Frederik Tindal, was a cavalry major and a prominent member of the royal entourage. The young woman grew up playing with the princes. However, her father’s friendship with Queen Sophie, the spouse of King Willem III, cast dishonour on the entire family when an inquiry found that the two had been a little too close.

Her father fled to Mexico, leaving Mary behind in Amsterdam. Since her mother had passed away a year earlier, the fifteen-year-old Mary was left alone to take care of five younger siblings. They were taken in by childless cousins and sent to boarding-school. Mary then moved in with her guardian, Willem van der Vliet, becoming a lady companion to him and his wife.

It was probably there that Gerard met this pretty young woman with a will of her own. Van der Vliet was against the marriage, so Mary travelled all the way to southern France to get approval from her father, who had settled there after his return from Mexico. Gerard and Mary’s wedding, in April 1871, was lavishly celebrated in The Pentagon, a pavilion in the fields behind the brewery.

Like their British counterparts, Dutch breweries at the time mostly sold dark and cloudy, ale-type beers. They were known as top-fermented beers because they fermented at the top of the brewing vessel, forming bubbles and thick foam. The problem was that this exposed the brew to all sorts of microscopic organisms, which could spoil it entirely. Bavarian monks worked out that, if they fermented at colder temperatures, some of the yeast sank to the bottom of the vessel. It took much longer than top-fermenting, but the beer was lighter and more consistent. This lengthy maturation inspired the English name ‘lager’ for this sort of beer: lagern is German for ‘to store’.

The bottom-fermenting beers rapidly spread around Bavaria in the second half of the nineteenth century, and they were avidly tried by Dutch drinkers as well. The growing thirst for ‘Beiersch bier’ became embarrassingly evident during an international fair held in Amsterdam in 1869. The stand erected by Heineken & Co. was almost deserted, while visitors were queuing up to taste the clear Bavarian beer served up by a competing Dutch brewer. Sensing that bottom-fermenting beer was more than a passing fad, Gerard immediately sent Feltmann to investigate bottom-fermentation in his home country. A few months later Heineken switched to lager-brewing.

It was around the same time that Gerard Heineken started turning out a beer that bore his name. Scores of guests tasted the brew in February 1870 in The Pentagon, the pavilion often used by Heineken for parties and receptions. A reporter described it as ‘a full-bodied, clear, particularly tasty drink that appeared to combine the good qualities of Viennese beer and Belgian beer’.

The Bavarian ‘lager’ made by Heineken and other brewers was still quite dark. Just a few years later the Bohemians staked their own claim to brewing fame with a much lighter take on bottom-fermenting beers. It came out of Plzeň (Pilsen), a small town in Bohemia, using pale malting techniques and lager yeast smuggled from Bavaria, along with local water and hops. ‘Pilsner’ was just as stable as Bavarian beer, but much lighter in shade and with a crisp taste. It’s this beer that Britons call ‘lager’, but Europeans more accurately describe it as ‘pilsner’.

Demand for the beer surged, but Heineken struggled to deliver, leaving a gap in the market that De Amstel rose to fill in 1872. Two years earlier three wealthy families had started building a huge brewery on the banks of the River Amstel. It dwarfed the Heineken brewery, which could be spotted in the distance. Once the Amstel barrels started rolling out, competition suddenly heated up in the Dutch beer market. Amstel had enormous capacity, and it deployed unusually aggressive tactics to secure sales.

To hold its own, Heineken & Co. urgently needed another brewery. Since Heineken was unable to finance the construction alone, he struck a deal with Willem Baartz, the man behind the competing d’Oranjeboom brewery in Rotterdam. The friendly rivals struck a partnership that would enable Heineken to build its own brewery in Rotterdam. Heineken was the largest shareholder, with 166 shares, amounting to about 70 per cent of the capital; Baartz held 20 per cent, and his friend Hubertus Hoijer had 6 per cent. The company was formally established in January 1873 as Heineken’s Bierbrouwerij Maatschappij (HBM) N.V.

As Gerard had predicted, sinking yeast turned the Dutch beer industry on its head. This was because it required large-scale investments that only the brewers with good financial resources could afford. One of the difficulties of lager production was that it required cool storage. While the Germans could ‘lager’ their beer in caves, the Dutch had to build cellars and keep their beer cool with ice. In harsh winters, ice could be harvested from the Amsterdam canals, but in milder seasons they had to have ice blocks shipped all the way from Norway at considerable cost.

Always on the look-out for new inventions and scientific developments that might prove useful, Heineken and Feltmann found the solution to this problem: an artificial ice-making machine invented by the German engineer Carl von Linde. Heineken bought one of the first prototypes in 1880. Producing about 1,000 kilos of ice per hour, this not only cooled Heineken’s beer but also enabled HBM to run a lucrative ice trade. But the real breakthrough in modern brewing came with the discovery of pure yeast. Until then, many batches of beer had to be thrown away because they were affected by ‘diseases’ that caused bitterness or acidity – seemingly at random.

The French bacteriologist Louis Pasteur was crucial to this discovery. Pasteur had made his name by explaining how diseases such as rabies and chicken cholera spread, and by developing the first vaccines. But when France got embroiled in a war with Prussia in 1870, it seems that Pasteur decided to undermine Germany’s brewing industry by producing detailed studies on beer and sharing the outcome with all brewers – except the Germans.

Pasteur persuaded the managers at the Whitbread brewery in Chiswell Street, London, to buy a microscope and settled down to study the micro-organisms at work in the brewing vessels. He wanted to explain the hitherto mysterious brewing process and investigate the damage caused by bacteria. Published in 1876 in Etudes sur la bière, the Frenchman’s findings amounted to a huge breakthrough. They explained fermentation as a process in which yeast cells split sugar into alcohol and carbon dioxide, and provided advice on destroying bacteria in fermenting beer. This enabled brewers to avoid random spoilage and extended the shelf life of their beer, thereby allowing it to be shipped much further.

The Carlsberg laboratory in Denmark built on these discoveries to carry out equally important research for the entire brewing industry, and it was Christian Hansen, head of the Carlsberg laboratory, who isolated the first single-cell lager yeast culture. Based on Pasteur’s findings, the scientist identified and removed ‘bad’ yeast cells that caused beer to spoil. Heineken was among the few brewers sufficiently rich to open their own laboratory, in Rotterdam. It was the second brewery known to cultivate its own strain of pure yeast. Hartog Elion, one of Pasteur’s disciples, was hired to create the irreplaceable ingredient of the Dutch beer: Heineken’s A-yeast.

Heineken’s effervescent sales and Gerard’s involvement in many organisations, ranging from soup kitchens to artistic societies, turned him into a prominent citizen of the Dutch capital. His group of friends were among the enterprising men who invested in the city, funding bold constructions and canals. They contributed to many influential projects, supporting economic as well as social progress.

The Heinekens started building a sumptuous mansion opposite the breweries, Villa Heineken, complete with a winter garden and a huge wine cellar. But the brewer was apparently less fortunate in his marriage, which long failed to produce any children. The couple became the target of pernicious rumours suggesting that Mary was rather too close to Julius Petersen, a friend of the Heineken family. A former jockey, this short and stocky man was one of the pillars of Amsterdam society at the time. ‘Piet’ was admired for his intelligence, and was particularly eloquent on the topics of music and horse-racing, the latter being one of Mary’s favourite occupations. Gerard, Julius and Mary spent many evenings together and even travelled to Brussels together to celebrate the couple’s wedding anniversary.

Mary Heineken-Tindal and Julius Petersen’s closeness became a subject of yet more malicious whispers in Amsterdam after the arrival of Henry Pierre in April 1886, about fifteen years into the Heinekens’ marriage. For several years Gerard managed to keep them out of print, but in 1890 they appeared in a venomous pamphlet, Achter de Schermen (‘Behind the Scenes’):

A few years ago Piet received warmest congratulations from his friends. After fifteen years of marriage his friend Mary had given birth to a healthy boy. Our friend’s joy and pride knew no bounds. On the other hand, it is rumoured that some people saw Mr Heineken that day and did not recognise him. It was whispered that the man himself, when he looked in the mirror, discovered an enormous pair of horns on his forehead.

The scandal that erupted didn’t end Gerard’s friendship with Petersen, nor did it affect his beer business. Heineken was still thriving when his leadership abruptly came to an end on 18 March 1893. That morning, at eleven o’clock, Heineken was preparing to address the company’s shareholders ‘when he suddenly collapsed, without letting out the slightest sound’, as one reporter noted. He was fifty-one years old.

The convoy of horse-drawn carriages that brought Gerard Heineken to his final resting place, the Zorgvlied cemetery in Amsterdam, was watched by ‘hundreds of people’. Heineken was praised as a pioneering industrialist, as well as a generous sponsor of the arts.

Feltmann, who made an emotional speech at Heineken’s graveside, quickly recovered his wits. He apparently courted Heineken’s widow, Marie Tindal, in an attempt to persuade her to sell her majority in HBM, and set his son up as a potential successor. The widow, however, had a will of her own. Although Feltmann remained technically in charge of the breweries after Gerard’s death, Lady Tindal proved a tough opponent. Both feared and respected, she became known at the breweries as ‘Her Majesty’. Far from selling out, she demanded that the directors surrender their own shares, so that she could redeem shares pledged by her late husband as collateral for his debts. Heineken remained a family affair.

The rumours about Henry Pierre Heineken’s paternity resurfaced predictably enough less than two years later, in January 1895, when his mother married Julius Petersen. As Henry Pierre grew up, some pointed to a ‘striking physical resemblance’ between Henry Pierre and his stepfather. ‘Gerard Adriaan was a tall, slender gentleman with sharp features, while Henry Pierre inherited Petersen’s square face and stout allure’, said a former Heinekeen employee. The boy was close to the man he called ‘Father’, and particularly enjoyed the mornings they spent playing the piano together with four hands.

Mary Tindal resolutely backed Petersen by appointing him as a director and later chairman of HBM, although he had no track record in brewing or any business other than horse-racing. Meanwhile she ran the household with the same authority she had displayed in the brewery. Henry Pierre was educated the military way and made to stand to attention at the dinner table. If she ever dreamed of turning the boy into an army general, however, Mary was quickly disillusioned. When his stepfather died in 1904, Henry Pierre enrolled in chemistry studies. He obtained his doctorate in July 1914 and joined the Heineken breweries three months later.

Over the next three years the impatience of this dapper heir, with his thin moustache and slicked-back hair, triggered a clash of generations within HBM’s management board. The old guard first attempted to restrict Henry Pierre’s influence by confining him to the laboratory. To impose his will, Heineken sometimes resorted to unorthodox negotiating tactics. When the master brewer opposed the modernisation of the brewery’s steam boilers, for example, Henry Pierre summoned a group of directors and locked the door behind them. Sliding the key in his pocket, he coolly declared that he would only release them when his proposal was approved. Eventually, Henry Pierre triumphed. Both the master brewer and the company’s chairman departed in 1917, allowing Heineken to jump into the saddle.

At a time when brewing still required a mixture of human and scientific input, Henry Pierre’s interest in chemistry was quite practical. The quality of the beer had been recognised beyond the Netherlands, earning a Diplôme de Grand Prix at the World’s Fair in Paris in 1889 (something still mentioned on Heineken labels).

Yet even Heineken could not uphold the quality of its beer when war broke out. By 1917 it had become so tricky to import barley from central Europe that Heineken was forced to brew with rice, sugar and tapioca flour. In a fit of despair, Henry Pierre even ordered tests using flour from tulip and hyacinth bulbs. In these devastating years Heineken’s production more than halved, from 429,000 hectolitres (each hectolitre equalling 100 litres) in 1916 to 182,000 three years later. Yet Heineken recovered swiftly. The signing of the armistice ushered in an era of almost effortless, unbridled growth: in 1921 it recorded profits of some 2 million guilders and it paid about 28 per cent of all Dutch beer levies – a reliable indication of its market share. Two years later the company was undeniably the Dutch market leader, with an output of 498,000 hectolitres.

Throughout the 1920s Heineken tightened its grip on the Dutch beer market through a string of small takeovers and careful investments in property. At the same time, the company started working on