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SABMiller Enterprise Farming

Challenge

Encourage enterprise in local supply chains

Problem

Large business makes use of global sourcing of commodity raw materials to reduce costs. However, in some cases local sourcing can have considerable benefits, such as increased quality, reduced distribution costs and local economic stimulus (of potential customers).

Products such as beer tend to be regionally produced and differ in taste between cultures and communities. Engaging with those communities can bring significant benefits to the business.

Solution

The major brewer SABMiller has an Enterprise Development programme. In Africa, India and Latin America, this is run as the Farming Better Futures programme. The aim is to generate inclusive growth by encouraging the local sourcing of agricultural raw materials from smallholder and commercial farmers.

Working with over 30,000 smallholder farmers the programme seeks to establish local sourcing programmes. For example, in India SABMiller aims to source all barley from local producers within the next five years. The operation is tailored to the community and driven by enterprise rather than charity. Establishing a barley supply chain from scratch has led to over 4,000 rural workers having a regular income for themselves and their families by generating and selling surplus crops.

During 2012 SABMiller invested US$4.7 million in programmes to support entrepreneurs around the world, awarding grants and microfinancing to over 100 businesses, and providing training to more than 1,000 entrepreneurs.

Benefits

Develop local skills
Stimulate local economies to become customers
Develop resilient and diverse supply chains
Encourage enterprise and demonstrate that business growth and sustainable development can be mutually reinforcing rather than in conflict
SABMiller’s commitment to increasing the local sourcing of raw materials to 50% over the next two years will raise the number of direct farming jobs supported by their operations from about 100,000 today to 150,000 (INSEAD research)

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