Guinness Nigeria, inclusive raw materials supply chain
Guinness Nigeria is an African company operating three brewing facilities in three states across Nigeria for the production of alcoholic and non-alcoholic drinks. Currently, maize and sorghum constitute 80% of the company's agricultural raw material input. Both crops are sourced locally through a third party sourcing model. This means Guinness Nigeria has contractual relationships with dealers and uppliers who aggregate the grains from the farmers, process, store and then supply to Guinness Nigeria.
Acknowledging increasing demand for the raw materials by competitors and other related sectors, Guinness Nigeria aims to increase the guarantee of its supply chain by moving away from the current sourcing model to a more strategic partnership approach involving multiple stakeholders across the entire value chain. The company intends to build strategic partnerships with banks, agricultural NGOs, donor agencies and research organisations and to leverage these partnerships to mitigate some of the challenges that currently affect the sorghum value chain.
Guinness Nigeria will provide support to various stakeholders along the value chain. Support to farmers and millers within this inclusive sourcing ecosystem is based on three key elements:
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To tackle some of the challenges existing in the sorghum value chain such as access to finance, Guinness Nigeria will cascade the visibility and control it has of stocks with millers by supporting its suppliers to arrange subcontracts with farmer groups.
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Skills development has been recognised as another critical factor to help farmers increase yields. Partnerships with development organisations and NGOs to raise awareness e.g. on the right use of the seeds and seed inputs.
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By closer collaboration with millers Guinness Nigeria aims to facilitate the uptake of new technologies such as warehousing and transportation, and identify better market intelligence solutions.
The impacts of this inclusive business venture will be to fully integrate and develop smallholder farmers into the Guinness supply chain. Given the volume of its procurement Guinness Nigeria estimates that this sourcing model has the potential to benefit about 6,000 poor subsistence farmers and rural traders in the long term.