Developing smallholder supply chains and strengthening livelihoods
In Uganda, agriculture is a critical source of income where more than a third of the population lives on less than 1.90 USD a day. Nile Breweries Limited (NBL) pioneered the development of Eagle Lager by sourcing locally, helping to create a secure income stream for more than 20,000 smallholder farmers in Uganda. It has also helped grow NBL’s market share 25% since it was created in 2002. Eagle brands now account for 66% of NBL’s total sales volumes.
In 2016, we partnered with International Institute of Tropical Agriculture (IITA) to study the impact of our programs in Uganda. This study found the total household income of farmers in NBL’s supply chain is more than double compared to a control group. Approximately 80% of farmers said their quality of life had improved since joining the NBL initiative. However, there are still a number of challenges in smallholder supply chains, including low yields, gaps in skills and communication and weak availability of agribusiness services and financing.
We partnered with TechnoServe in 2016 to help us map key opportunities to optimize our supply chains and enhance our social impact on farming communities. In 2017, we plan to advance our partnership with TechnoServe to help us improve the skills for our supply chain aggregators, train 2,000 farmers through their Farmer Field School model, and focus on empowering women and youth through these initiatives.
TechnoServe commentary on our partnership
TechnoServe, a non-profit founded in 1968, works to harness the power of the private sector to help people lift themselves out of poverty. We view the private sector as a key enabler and much needed partner in addressing some of the largest social, economic and environmental challenges facing current and future generations.
Across its emerging market operations, AB InBev has developed compelling initiatives -- ranging from the creation of new beers using locally-sourced materials from smallholders, to supporting small retailers in its distribution network to improve their businesses -- that create value for society, its customers and its business. In 2016, we partnered with AB InBev to further improve two of its existing flagship programs – local sourcing of sorghum and barley in Uganda, and cassava in Mozambique (previously SABMiller businesses). By identifying innovative opportunities to improve farmer livelihoods and increase security of supply, the partnership demonstrated AB InBev’s commitment to creating sustainable “win-win” outcomes for AB InBev’s local businesses and the communities in which they operate.
As the world’s largest brewer, AB InBev has the opportunity, the resources and a clear business rationale to reach many more people in poverty with programs that create value for both the business and society. In the future, we would like to see AB InBev replicate the best of these "win-win" programs across its global footprint. In doing so, AB InBev should pursue quantifiable commercial and social impact, such as income improvements and value chain strengthening to achieve tangible outcomes for small enterprises in its supply chain and distribution networks.