The Dutch brewer — the world’s third-largest — is stepping up its development on the continent, aiming to grow grain locally with over 100,000 farmers in eight countries.
Since the mid-2000s, Heineken has been increasing its investment in Africa, where it began operating in 1923. The continent accounts for nearly 15% of its global turnover, up from 10% in 2010. Between 2005 and 2012, the group invested €2.2 billion to strengthen its positions and pursue a two-pronged strategy: boost sales of its top-end brands and increase its industrial capacity. The output of its 45 African breweries rose from 18.3 million hectolitres in 2007 to 27.4 million in 2013.
In the Heineken Group, the Africa Middle East region accounted for:
27.4 million hectolitres in 2013
14.1% of total production
Key brands – Heineken, Primus, Star, Mützig, Amstel…
Strong positions: number one or two on 18 markets
Nigeria, one of Heineken’s African strongholds and its biggest market on the continent, is a striking example. In January 2011 the Dutch giant bought 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. The group started building a new production site near Addis Ababa in 2012 and set up the Heineken East Africa Import Company in Kenya in 2012. “Our goal is to be as close to African consumers as possible,” says Heineken Africa and Middle East President Siep Hiemstra. “To achieve it, we have to outpace the market. That’s why the group is investing more in Africa than in any other part of the world.” Heineken has decided to invest €500 million in Africa in the next few years.
Developing African agriculture
Throughout the continent, the Dutch giant has 56 production sites, directly employs 15,000 people and is involved in many activities in the service of people, especially partnerships with civil society to fight alcoholism and through the Heineken Africa Foundation, which helps to build healthcare facilities. Heineken also works hand in hand with farming communities: the brewer has set the strategic goal of sourcing 60% of its grain from African growers by 2020.
Heineken already has strong experience in this area. In 1989 the group started replacing imported malt in Nigeria with a locally grown, high-yield variety of sorghum developed in partnership with that country’s agronomical research institutes. The experience was reproduced in Burundi in the mid-1990s. After a weak start, a partnership with the Netherlands’ Ministry of Foreign Affairs spurred a rise in production. In 2008 Heineken launched a major rice-growing programme in the Democratic Republic of Congo. Tens of thousands of farmers are now involved in this country brimming with natural wealth, including 80 million hectares of arable land. Rice production rose by 62% from 2009 to 2012 and farmers’ average income by 323%!
Picking up the pace
A partnership between Heineken and the public sector led to progress in the DRC. The Dutch government and the European Cooperative for Rural Development (EUCORD), an NGO, teamed up for Congolese rice. The experience was so successful that the partners convinced several other NGOs to join them in setting up a programme in 2013 called CREATE (Community Revenue Enhancement through Agricultural Technology Extension), which helps to boost the output of maize in Rwanda, sorghum in Sierra Leone and hops in Ethiopia. Since June 2014 a new public-private partnership with Psaltry, a local company, and 2SCALE, a Dutch NGO, has helped Nigerian farmers increase manioc production.
So far, 11 initiatives to improve local agriculture are under way in eight African countries (South Africa, Burundi, Egypt, Ethiopia, Nigeria, Rwanda, DRC and Sierra Leone). They involve some 100,000 farmers, improving quality of life for around 600,000 people. In 2013, 45.6%, or 200,000 tonnes, of the various grains Heineken used in its African breweries were locally grown. At that rate, the goal of sourcing 60% of its grain in Africa by 2020 is realistic.
Source: The Africa Report