Digital transformation and merger integration lift consulting bill of Heineken
Heineken ramped up its central consulting spending by more than 20% in 2017, according to its latest financial statements. The firm has been seeking to reposition itself, as its competitors strengthened their arms via acquisition campaigns, as well as pushing for a digital transformation agenda to consolidate profits in the long-term.
Consultants involved with Heineken will be toasting the beer-brewing giant, after news emerged of a bumper year in consulting fees paid out by the company. Heineken has consistently sought the advice of the consulting sector amid a changing market, with advisory specialists aiding the firm in matters including the succession planning of what is still considered a ‘family business’, and a rejected takeover bid from SAB-Miller in 2014.
Heineken is the Dutch market leader in the beer industry, and remains one of the top three largest breweries in Europe, as well as a major exporter to the United States. However, after Britain’s high-ranking London-listed SAB-Miller, was the subject of a mega-deal merging two of beer’s Big Four – being purchased by Belgian brewing conglomerate Ab-InBev – Heineken has been keen to expand its own capacity, against heightened competition.
In order to do this, the famous brewery has upped its annual consulting spend to its highest rate since 2014, in a 21% boost on last year’s advisory bill. According to the company’s latest financial statements, Heineken spent €169 million on consulting industry expertise in 2017 – mainly for pushing its digital transformation agenda and for integration work following acquisitions of brewing company Lagunitas, Japanese brewery Kirin, and the Punch Taverns pub portfolio, among others.
The €169 million total averages out at the rough equivalent of €2,100 per employee being spent on consulting services. The current level of expenditure is comparable with 2011 and 2013 when €166 million was spent on advisory services – a bill with similar motives behind it, as Heineken spent a large sum on consultants when it took over Asia Pacific Breweries.
The climb in consulting spend is emphasised further as it comes on the back of a two year reduction in spending on external expertise at the group. Heineken’s consulting bill fell by the same margin that it has climbed this year, back in 2015. It spent a further 1% less last year, with €140 million being paid to management and technology consultancies, as well as independent consultants in 2016.
