Leo Van Munching – The Story of the US Heineken Mogul

We don’t need Heineken. We have tap water already.

That was the reaction from beer connoisseurs in Belgium when Heineken launched a venture in their neighbouring country.

Regardless of what you think of the taste, Heineken is a fascinating company for anyone interested in marketing and sales. Among other things, they had a sales agent who was quite out of the ordinary.

How an independent sales agent took the American beer market by storm and got one of the world’s leading beer brands by the balls.

When prohibition ended in the United States in 1933, several European beer producers were ready to conquer the world’s fastest-growing market. None of them succeeded as well as Heineken, and much of the credit belongs to the legendary sales agent Leo Van Munching. Munching had several weeks to convince Pieter Feith, Heineken’s export manager, that he was the right man for the job, as the two of them happened to be crossing to New York on the same boat. By the end of the voyage Munching had, through his own company (VMCO), secured exclusive rights to the US market for Heineken.

Sales ploys in New York

In December 1933, Leo went ashore in New York. Along with his family, he brought 50 crates of Heineken and a contract that gave him a monopoly on the American market.

Leo started selling and marketing the Dutch beer to Manhattan’s trendiest bars and restaurants straight away. His strategy was to position Heineken as beer’s answer to champagne: if you were out of champagne, you could always order a Heineken.

“If you were out of champagne, you could always order a Heineken.”

One of his most famous ploys was to walk into a restaurant, loudly order a Heineken, then act even louder and more appalled when the so-called fine establishment did not stock the pride of the Netherlands. Shortly afterwards, one of his salespeople would pay that same restaurant a visit.

Leo roped his wife into the act too. They would dress up in their finest and book a table at New York’s most exclusive restaurants, making sure the whole room knew they were celebrating something momentous. When the time came to raise their glasses, they called not for champagne, but for Heineken. Nobody knows how many fictional engagements Leo and his wife toasted over the years, but every one of them was celebrated with a Heineken in hand.

World War 2 and other obstacles

There were major challenges too, given the turbulent period in world history. When the Netherlands was occupied in 1940, an export ban was introduced that cut off the supply of Dutch beer. Van Munching immediately began importing from Heineken’s factory in Indonesia, but shortly afterwards Japan closed off that route as well.

The postwar years brought their own challenges, including another brief Dutch export ban, but these were only minor speed bumps in Van Munching’s quest to dominate the US beer market.

He had already built a national distribution network across the United States. He knew every bartender of importance in New York, and if one of them was unhappy he would buy a few rounds to smooth things over. He even ran sales contests between the bartenders, giving them an extra incentive to push Heineken.

Some competitors were simply steamrollered. The sales agent Amstel sent to the United States gave up after just a few months, finding it hopeless to compete with Leo Van Munching and Heineken’s status “over there”. A few years later Heineken bought its Dutch rival outright.

Contract negotiations

In 1960, the contract between VMCO and Heineken was due to expire, and Van Munching headed for Amsterdam to renegotiate. By then the USA accounted for the majority of Heineken’s exports, and Van Munching was known as the company’s unofficial fifth board member.

When Van Munching arrived in Amsterdam, the red carpet was literally rolled out in front of the entrance to the headquarters.

There were factions inside Heineken who wanted more control over the US market and a significant ownership stake in VMCO. Van Munching would not hear of it, and the Dutch beer giant dropped every one of its demands.

The agreement he walked away with was unique in Heineken’s history: VMCO was guaranteed exclusive rights to the world’s largest beer market for the lifetimes of both Van Munching and his son. Deals like that are rare, and the law on what an exclusive agency agreement actually gives an agent is worth knowing if you ever negotiate one.

The new contract gave Leo fresh motivation, and Heineken kept on growing in the US.

In 1960 they sold around a million cans of Heineken. By 1975 that figure had grown sevenfold, and Heineken accounted for 35% of all beer imports into the US. The company could now claim, officially and justifiably, to be the biggest foreign beer brand in America.

In large part thanks to one salesman, sales agent and businessman: Leo Van Munching.

Leo Van Munching died in 1990. Eight months later, Heineken bought VMCO and regained full control of its US operations. Heineken still holds a strong position in the American market, though it has since been overtaken by Corona as the most imported beer in the US.

---

This article draws mainly on “The Heineken Story” by Barbara Smit, a highly recommended read full of stories about how Heineken became one of the world’s beer giants.