Consultancy spending Heineken rises to 179 million

Heineken’s global consultancy expenditure increased with 8% last year, reveals an analysis of Heineken’s financial results by Consultancy.uk. The brewery expended €179 million in 2014 on services from external consultants, up 64% compared to five years ago.

Since the outbreak of the financial crisis, the majority of businesses has structurally reduced expenditure on external consultants, either through paying lower fees, the upscaling of preferred supplier constructions and the deployment of internal personnel, whether or not under the direction of internal consultancy practices. Heineken, however, has shown itself to be one of the exceptions to the rule – the global brewery instead opened its pocket book to hire in ever more external advice. Only 2013 saw the brewer drop its spend on consultants, while in 2014 expenditure on external consultants grew by 8% to a total of €179 million. This means that since 2009 – when a total of €109 million was spent on external advisors and support – the yearly expenditure on consultants has grown by 64%.

2012 was a record year for expenditure on consultants – and saw Heineken giving out €191 million in external advice. While each year the brewer discloses in their annual report the value of expenditure on external advisors, which firms it has hired and how much each of these firms receives in fees is not disclosed.

The increase in consulting expenditure in 2014 is noteworthy. The brewery has in recent years sharpened its focus on reducing costs, in order to boost bottom-line profitability. This focus is reflected in the cost reductions achieved across a large number of operational areas. The biggest cost saving in 2014 came from travel costs, while considerable savings were also realised in repair and maintenance, distribution costs and resources.

Even with a focus on cost reduction, costs in five functional areas Heineken’s business were on the increase in 2014. The largest increase was found in telecom and office costs, followed by consulting expenditure. In packaging, transport and marketing and sales costs too were on the increase, however, none of these increases was not above 2%.