Stefan Orlowski: delivering the Heineken story

Heineken UK MD Stefan Orlowski talks to Phil Mellows about the importance of keeping beer vibrant and interesting for consumers and why the pub is such a crucial arena for his brands.

Some strange involuntary spasm must have contorted my face into an expression of stunned disbelief for an instant. Stefan Orlowski looks almost offended. "Heineken is a family company," he insists. "I can identify all those people."

Technically, he is, of course, correct. For the pub trade, though, it seems a stretch to compare Heineken UK, the local arm of a vast international corporation, with the British family brewers he admires.

Orlowski, who has been managing director of Heineken UK, the brewery formerly known as Scottish & Newcastle, since the middle of last year, is certainly a global man. Born in Australia, he spent much of his career playing a key role in developing the post-Communist East European brewing industry — an experience that, along with a sharp commercial sense, has shaped much of his attitude.

"I started in beer because I saw the opportunities," he says. "I was a commercial lawyer in Australia when the curtain came down in Eastern Europe. I went there on holiday and I saw some fantastic opportunities, then bumped into some private investors who invited me to work with them there.

"I went over with one suitcase and stayed for 18 months. And here I am, still in Europe nearly 20 years later. It's been fantastic fun.

"Eastern Europe is a very competitive environment," he continues. "In Western Europe the market has been established a long time and things change very slowly. In the east, if you don't make decisions quickly, the world races past you.

"The pace is slowing now, the industry is more professional and developed, but in those days it was about the speed of doing things, your timing. It was great because you could see the fruits of your labour almost straight away, whereas here you're never quite sure what impact you've made.

"The East Europeans were young, they had energy and passion. The early '90s were maverick years. There was an entrepreneurial spirit. That's what I got out of it."

So the UK must seem a bit of a come-down, the chill-out room after the rave. Was it Orlowski's decision to come here?

"When you get to a certain position in a big company it's never entirely your decision, but I'm finding myself very happy to be in the UK. It's been very challenging. It was a big acquisition for Heineken and I relish that sort of stuff. I've not lived in the UK before, but I've worked to some extent on acquisitions and integration, and I'm familiar with the issues and challenges they raise. So it's not new to me. There have been no enormous surprises.

"It's part of the beauty of the experiences I've had, living in different cultures, and what's fantastic and unique about the UK is that beer and pubs have been around so long — they've been part of the fabric of society for a very long time. That's special.

"It means there's a lot of public debate on issues and the level of media attention given to the industry is unlike that in any other country."

It's questionable, for instance, whether the hike in cider duty in the latest Budget would have generated a similar public reaction anywhere else.

At the mention of the Budget, Orlowski looks slightly dismayed.

"The continuation of the duty escalator was disappointing. There's a definite imbalance between industry and Government. Beer and cider have been a part of society for a long time and it's established that the Government will reap a significant revenue from them.

"But it's not infinite. There's a point where there's not enough left to sustain the industry and it declines, then the tax revenue will decline too. If that kind of trend is established it's very difficult to reverse.

"The industry has changed radically over the past 20 years. We have to keep consumers interested in our brands. We have to keep asking ourselves, are we doing the right thing? Are we keeping the category vibrant? And we have to have the revenue to spend — it's simple."

That revenue is also squeezed by the tight profit margins currently available to big lager brewers. But Orlowski does not want to be distracted by any quick solutions to that. Heineken UK has to keep a focus on brand-building.

"What's fundamental in the category is that we keep beer vibrant and interesting for consumers. That's a story about brands, not commodities, and it's within our gift to address that, to make sure the consumer gets the right experience from our brands.

There are so many other things people are doing we have to grab their attention.

"While I'm in this job I want to make sure our brands are recognised as the most vibrant and interesting in our category, that in people's minds it's Heineken that's leading the industry. That means giving the greatest added value. We've got the brands, but we can do even better with them.

"Brands don't exist in a vacuum. The important thing is you have to work with customers to make them happen."

That's why, despite the migration of beer volumes from the on-trade to the off-trade, and despite the various crises threatening the trade, the pub for Orlowski is a crucial arena for his brands. Apologising for slipping into marketing jargon, he describes it as a "consumer touch point".

"The on-trade consumer experience remains a very important aspect of the whole category story. It generates interest in the category. It's what makes it social and engaging and exciting, and we must never lose that. The on-trade will continue to be fundamentally important to telling category stories."

The "story" here is a tale of a quality experience for pub customers when they pick up a glass of beer.

"Consumers today look for high retail standards. Wherever they are, they recognise what's good and what isn't. So we have to make sure retail standards in pubs are continually upgraded and consistently delivered.

"There are some fantastic operators who are very successful, and there are poor operators who are challenged — and some of those businesses will not survive. It's a truth: when the going gets tough the tough get going. The good operator focuses on the right consumer offer for that pub and its customers."

There's a tendency to fetishise choice, but that may not always work, at least when it comes to beer in pubs. "You often see a massive choice on the bar, and that may be appropriate — but not always. Pubs can be over-tapped. There's too much variety and it's not clearly saying to the customer what the place is about."

On top of its brands, Orlowski believes that, more than anything else, what Heineken can bring to pubs is quality of serve — that elusive perfect pint.

"There are those who understand that less than we do, I think. Quality is not always at the optimum. We're improving, but every now and then you get a bad pint. We have to be out there in the pubs spending time with licensees and staff to make sure they know what a great pint looks like.

"It's about cleanliness, glassware… The time and effort we've taken to create the new Foster's glass has been quite extraordinary. But we have to deliver the right experience, and that's also in the interests of our trade customers who want their customers to come back again, paying more for that experience because they know they're not going to replicate it at home."

Whether it's a family firm or not, Heineken is a big company, and Orlowski has his work cut out reaching down into the nitty-gritty of the way the beer he produces is experienced by the man and woman in the pub. Understanding the importance of that, though, is a good place to start.

My kind of pub​

"What is it that makes a pub good? It's an experience you can't replicate at home. Heineken used to talk about delivering a feeling. That's a social atmosphere, plus great products and attentive service.

"It's whatever makes people feel good."

Key dates​

• 1992: After qualifying as a barrister specialising in commercial law in Melbourn