South African Breweries (SAB) says there is room to add more small scale farmers into its network and it is open to partnerships with the government.
The beer producer has invested heavily in the agricultural industry through a number of initiatives. As a result, 95% of its raw material is sourced locally.
SAB CEO Richard Rivett-Carnac said the group had invested in emerging farmers over the years but some of them fell away. However, SAB is open to more discussions with the government to “identify the right farmers to build them into commercial farmers”.
This can be achieved through access to land and funding — both of which the government can assist with — as well as skills development and offtake agreements, which SAB can provide, he said. “We believe that is the natural next step and will be working with the government to try to understand how we do that meaningfully,” he said.
Rivett-Carnac was speaking on the sidelines of the annual SAB State of the Beer Economy event at the Caledon Farm Research & Development Facility in the Western Cape.
He said SAB’s prioritisation of local sourcing for brewing ingredients has led to a 60% increase in local barley production since 2017, with 324,000 tonnes produced in 2023, contributing R1.4bn to GDP across four provinces — the Western Cape, Northern Cape, North West and Limpopo.
We believe that is the natural next step and will be working with the government to try to understand how we do that meaningfully
The development and agro-processing of nine hop varieties for local and international markets saw 409ha cultivated in the George region of the Western Cape. The sourcing of 230,000 tonnes of non-GMO maize farmed locally for local beer production contributed R754m to national GDP.
The beer sector supports 38,000 households within the agricultural industry.
Agriculture minister John Steenhuisen said SAB and the entire beer sector are integral to the agricultural sector, and are “the quintessential example of how a well established value chain can be the rising tide that lifts all boats in a particular sector”.
He said growth and jobs were essential to move the country forward. “How we provide real transformation and assistance for farmers in the sector has to be predicated on three key words: viability, sustainability and profitability. Without those three key aspects, we’re not going to be able to grow the sector.”
Steenhuisen said the country had a successful agriculture sector that not only provides food security to the population, but also exports South African products around the world, and “it’s these partnerships that the department is going to be seeking across all commodities”, he said.
As part of its support for small farmers, SAB has been working with FarmSol Holdings as its implementing partner for the emerging farmer support programme since 2018. SAB has provided production funding to FarmSol members, enabling farmers to plant 70,000ha of green crops over the years. Some farmers have diversified into other crops and are now supplying canola and sunflower oil.
Since it was established in 2016, FarmSol has worked with close to 1,900 farmers. FarmSol Holdings MD Aron Kole said funding remained one of the key challenges for emerging farmers. “Once you unlock production funding, there’s another element of mentorship and training. That is one of the most important things. We have a team of mentors who are supporting farmers to make sure they become successful.”
Kole said the partnership with SAB was essential to driving transformation in South African agriculture. “Through these collaborations, we help developing farmers to supply high-quality raw materials to the industry and assist in developing these farmers into sustainable, future-ready enterprises. This partnership improves farmers’ yields and access to commercial supply chains, while enabling the food and beverage sectors to source premium quality materials from a diverse network of local farmers.”
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