We have learnt that Africa can help us.
The Dutch giant, the world's third-largest brewer, is stepping up its initiatives on the continent. One priority is local production of the crops needed to make its beers, an effective way of fostering inclusive growth while supporting its business model.
Many people still believe that Africa needs help. We have learnt that Africa can help us.
For over 100 years, HEINEKEN has been resolutely turned towards Africa, where it opened its first brewery in 1923. Today the continent accounts for nearly 15% of its global turnover.
Between 2007 and 2013, the group invested €2.5 billion to strengthen its positions, with two goals: boosting sales of local and international brands (Heineken®, Primus, Star, etc.) and increasing its industrial capacity. Its 45 African breweries' output rose from 23.5 million hectolitres in 2009 to 30.1 million in 2013.
Nigeria, HEINEKEN's leading African market, is a striking example. In January 2011, it acquired stakes in five local brewers, boosting its production capacity by a third. Seven months later, it acquired two breweries in Ethiopia, Africa's second-most populous country.
In early 2013, it started building a third production site near Addis Ababa. "Our priority is to be as close to African consumers as possible," says HEINEKEN Africa and Middle East President Siep Hiemstra. "To succeed, we have to grow faster than our markets. That's why the group is investing more in Africa than in any other part of the world."
A win-win partnership
Today HEINEKEN operates in 23 countries all across the continent. It directly employs 15,000 people and supports over one million indirect jobs. The brewer seeks to have a positive impact on the communities in which it operates. One example is its partnerships with civil society to promote the responsible consumption of alcohol. Another is the Heineken Africa Foundation, which backs the development of health infrastructure and access to medical care. HEINEKEN also works with farming communities: it has set the strategic goal of sourcing 60% of its agricultural raw materials from African growers by 2020.
In the organisation of the HEINEKEN Group, the Africa Middle East region accounted for
30.1million hectolitres in 2013
14.1% of global volumes
Key brands - Heineken®, Primus, Star, Mützig, Amstel ...
Strong positions: number 1 or 2 on 17 markets
An impact on over 100,00 African farmers
The group already has strong experience in this area. In 1989, it started replacing imported malted barley in Nigeria with locally grown sorghum, a high-yield variety developed in partnership with that country's agronomical research institutes. The experience was reproduced in Burundi. After a slow start, in 2014 HEINEKEN launched Nyongera, the first locally produced, 100% sorghum beer, which is a big success.
In 2008, a major rice-growing programme began in the Democratic Republic of Congo. Tens of thousands of farmers are now involved in this country brimming with natural wealth—the country boasts 80 million hectares of arable land. Thanks to this programme, rice output soared by 62% from 2009 to 2012 in the eight regions where the project is underway and farmers' average income has skyrocketed: for example by 323% in Kinshasa!
These programmes benefit not just HEINEKEN, which secures its supply of agricultural raw materials, reduces its vulnerability to market ups and downs and cuts its shipping costs, but also local producers, who develop their knowledge, boost their fields' profitability and increase the income from their harvests. That raises their standard of living, which provides them with food security, enables them to improve their homes and send their children to school, etc.
Picking up the pace
Public-private partnerships (PPPs) between HEINEKEN, the Dutch government and EUCORD (the European Cooperative for Rural Development) have made these results possible. The experience was so successful that several other NGOs have joined them in the CREATE (Community Revenue Enhancement through Agricultural Technology Extension) programme, set up in 2013 to support the local production of maize in Rwanda, sorghum in Sierra Leone and hops in Ethiopia.
Over 6,000 Ethiopian farmers are involved in CREATE, a figure that should rise to 20,000 by 2017. Since June 2014, a new public-private partnership in Nigeria has been underway for the growing of local manioc.
So far, 10 local crop-sourcing initiatives, including six PPPs with the Dutch government, are underway in eight African countries (South Africa, Burundi, Egypt, Ethiopia, Nigeria, Rwanda, DRC and Sierra Leone). They involve over 100,000 African farmers, which means they have a positive influence on the quality of life for around 600,000 people.
In 2013, 45.6%, or 200,000 tonnes, of the various agricultural raw materials HEINEKEN used in its African breweries were of local origin. At that rate, the goal of sourcing 60% of its grain in Africa by 2020 is an achievable one.