Developing a sustainable
local supply chain
The Millennium Development Goals were
adopted in 2000 by all the world's governments
as a 'blueprint for building a better world in
the 21st century' and to seek to promote the
reduction of poverty and environmental
sustainability, among others. All UN member
states have pledged to meet these goals
by 2015. Heineken has also committed itself
to contribute to these goals as part of its
Sub-Saharan Africa is a region in which Heineken
operates and to which it has demonstrated
a long-standing commitment as an employer.
In this context, Heineken has developed projects
to alleviate poverty among the millions of poor
smallholders in Sub-Saharan Africa.
One of these projects was to develop a sustainable
local supply chain for the local subsidiary of
Heineken in Sierra Leone, Sierra Leone Breweries
Ltd, that would help local sorghum farmers
compete against imported grains. It has the
advantage of a shorter supply chain, diversification
of sources and hence reducing risk, the saving
of scarce foreign currencies and the stimulation
of the local economy. The competitiveness
of the local sorghum sector could be increased.
The second major goal was to raise farmers'
income derived from sorghum and hence
Previous projects to increase productivity were
typically supply-driven and lacked a clear demand
pull. Key to the success of this project is a
demand-led approach and the identification of
stakeholders in the value chain that directly trade
with consumer groups.
This project - supported by the Common Fund
For Commodities (CFC) - introduced better
production technologies, facilitated secure access
to markets, organised farmers in order to reduce
transaction costs and facilitated access to credit.
The project has also introduced best agricultural
practices among farmers.
Hence, the average income per family increased
and Heineken has adopted an Africa-wide strategy
to procure at least 60 per cent of their raw
materials from local sources. This project
demonstrates that building a local supply chain
is a multi-step process where the confidence of
the stakeholders along the commodity value chain
Heineken N.V. Annual Report 2010