How a 160-Year-Old Startup Uses AI: The Heineken Company’s Ronald den Elzen

**Sam Ransbotham** (0:01)
Stay tuned after the episode as Shervin and I discuss the key points from today's guest.

**Shervin Khodabandeh** (0:08)
A 160-year-old global brewing company still operates like a startup today. How does this help them put customers first in over 80 markets? Find out on today's episode.

**Ronald den Elzen** (0:21)
I am Ronald Den Elzen from The Heineken Company, and you're listening to Me, Myself, and AI.

**Sam Ransbotham** (0:28)
Welcome to Me, Myself, and AI, a podcast on artificial intelligence and business. Each episode, we introduce you to someone innovating with AI. I'm Sam Ransbotham, Professor of Analytics at Boston College. I'm also the AI and Business Strategy guest editor at MIT Sloan Management Review.

**Shervin Khodabandeh** (0:47)
I'm Shervin Khodabandeh, senior partner with BCG and one of the leaders of our AI business. Together, MIT Smr and BCG have been researching and publishing on AI since 2017, interviewing hundreds of practitioners and surveying thousands of companies on what it takes to build and to deploy and scale AI capabilities and really transform the way organizations operate.
Hi, everyone. Today, Sam and I are excited to be talking with Ronald den Elzen, Chief Technology and Digital Officer at Heineken Group. Ronald, welcome to the show and thank you for taking the time to talk to us.

**Ronald den Elzen** (1:27)
Thank you for having me. It's a pleasure.

**Shervin Khodabandeh** (1:29)
Heineken is such a big brand and I think most people listening to us know Heineken. I know you've been there as Chief Technology and Digital Officer, previously as President and CEO of Heineken USA. How would you describe the company?

**Ronald den Elzen** (1:44)
I've been here now for 30 years and look, I would jokingly say Heineken is a 160-year-old startup. We started here in Amsterdam, so born in Amsterdam and raised by the world. Our brands are sold in over 190 countries in the world, and we have large production facilities, breweries, or big sales organization in 80 markets in the world. So we're basically omnipresent. Yes, we are the Heineken Company, but in many markets we have local brands like Berra Moretti in Italy, Cruz Campo in Spain, Tiger in Southeast Asia, Tecate in Mexico. So we are a large global company with a global footprint from North America to Europe, but also available in South Africa, Nigeria, Haiti, Brazil, Indonesia, and many other markets in the world.

**Shervin Khodabandeh** (2:38)
Why did you say a startup?

**Ronald den Elzen** (2:40)
Well, we are still a family controlled company.
And I think in the DNA of Heineken and all our management across the world, many more people, you can feel that. You can feel this entrepreneurship. You can feel the can-do mentality. We have quite senior leadership in our operating markets across the globe. And that entrepreneurship, that can-do mentality, that agility to react very quickly to local circumstances, yeah, is part of our DNA. And I find that entrepreneurship is something of a startup companies. That, by the way, has downsides as well, because it feels like we have 80 startups, and balancing that with global scale, that is one of the challenges we have.

**Shervin Khodabandeh** (3:22)
You've been a big proponent of AI and analytics in general, I know. Tell us what you're excited about.

**Ronald den Elzen** (3:28)
Why I like AI is, I, believe it or not, once graduated in 95, trying to predict the stock market with neural networks. I was not very successful, but there's always been something in me that loves data, that loves these forecasts, and it loves analytics, that loves the structure of data. Also, my current job, which is much broader than just AI, I really find these exciting times.

**Sam Ransbotham** (3:55)
What are some examples of ways that you're using artificial intelligence?

**Ronald den Elzen** (3:59)
There's, I think, a broad array in Heineken where we are using, sometimes with big value AI and sometimes more proof of concepts. We now live in an era where 95 percent of what we talk about is gen AI, but truth be told, 95 percent of where Heineken gets its value from, and also a large part of where we invest in is classical analytical AI, machine learning model, predictive analytics, etc.
But if I split the two, then we are doing quite a bit on these more predictive models around, of course, revenue management, the optimization of promotions, consumer promotions in grocery stores, business to business, trade promotions. We do quite a bit. As you can imagine, a company like Heineken, there's a lot of advertising and promotion. So advertising, marketing mix, commercial mix optimization, sales execution. So what, next best actions, product recommendation. So a lot on the commerce side, because that is where we need to win and want to win and need to be competitive. There's of course a large cost base in manufacturing and logistics. And by the way, machine learning is a fairly good tool to optimize logistic movements of trucks and even truck loading, truck movements and truck load, but also manufacturing. Where more and more we use data with IoT. We take data out of our machines in every brewery we have across the globe, and try to analyze this and predict behavior of machines and of course optimize the output. So a lot, I would say across the entire value chain, from consumers to customer engagements, to machine optimization, to truck. That's where we need the value is that we can measure, we can track, and we can drive.