SEATTLE, Washington — While the world’s major alcoholic beverage companies are consolidating around the world, they are also investing locally in emerging markets. Investments by Anheuser-Busch InBev (AB InBev), Diageo and Heineken, among others, include sourcing from local, smallholder farmers and working with them to improve farming techniques. In this way, brewers advance the U.N. Sustainable Development Goals.
The latest major consolidation brought together AB InBev and SABMiller, the world’s first and second-largest brewers respectively. While the sheer size of the acquisition — the third largest in history — has captured headlines and global attention, the deal is also significant for developing countries.
Through the deal, AB InBev gains greater access to developing regions in China, South America and Africa, where SABMiller already has a stronger presence. Developing countries will likely see greater investment, including in local agriculture, continuing a sustainability trend set by international producers like Diageo, Heineken, and SABMiller and AB InBev themselves.
As brewers advance the U.N. Sustainable Development Goals (SDGs), AB InBev has identified six of the SDGs as core to its business: ending hunger, gender equality, affordable and clean energy, industry innovation and infrastructure, reduced inequalities, and peace, justice and strong institutions. It also has a commitment to clean water, and “to reduce our overall water use and risk, reduce agricultural runoff, increase access to clean drinking water and preserve the natural watersheds that sustain us.”
SABMiller’s work in advancing the SDGs includes partnering with local farmers in Uganda through its Nile Breweries subsidiary to produce beer from local raw materials which fit local demand. So far, 20,000 farmers have benefited from this initiative with sustainable incomes.
For its part, Heineken is working with smallholder farmers in developing countries to improve yields and compete against imported crops. Heineken has increased incomes for farmers this way and contributed to the alleviation of poverty and increased food security.
One example is sorghum farming in Haiti, where Heineken has helped to improve the lives of 18,000 farmers. The brewer led an alliance that trained smallholder farmers in modern agricultural techniques. The techniques addressed improving poor soil quality, effective seed germination and efficient harvest yields.
Heineken has recently entered into a memorandum of understanding with USAID to extend the program to three regions of Haiti. Heineken’s local brewer, BRANA, is investing $3.4 million in the program and USAID is contributing $1.7 million. Since the beginning of the program, farmers have increased sorghum yields by 100 percent and doubled their incomes.
Diageo, brewer of the global brand Guinness, has been working closely with farmers in Africa for decades. The investment in local farmers is important to the company because Africa is Diageo’s largest region by volume for beer. In 2015, it met its goal of sourcing 70 percent of agriculture materials used in African brewing operations locally. Now it is aiming for 80 percent by 2020.
For example, Diageo’s Meta Abo Brewery in Ethiopia now has a network of 6,000 smallholder farmers, who supply half of the total raw materials to the brewery. Diageo’s goal is to have them supply 100 percent of cereal raw materials by 2017. Each farmer gets a comprehensive production package, including seeds, fertilizer, training, crop insurance and mechanization. Because of this program, farmers have increased yields, improved income and are better able to support their families.
These global brewers demonstrate good, egalitarian practices for advancing the U.N. Sustainable Development Goals, by integrating those goals into their ways of doing business. This is beneficial for the companies, and critical for the success and prosperity of local farmers, now and into the future.
– Robert Cornet