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SAB tackles alien vegetation as part of its efforts to conserve water

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In commemoration of World Water Day 2024, the South African Breweries has highlighted the adverse impact that alien vegetation has on water security for farmers, businesses and local communities in South Africa. Water scarcity remains a challenge for South Africa.

According to a report the country has half the average global rainfall and is projected to have a 17% water deficit by 2030.

To mitigate water scarcity, the national response has attempted to maintain healthy catchment areas. One such area is Outeniqua, which is located just outside George. George is the only area in Africa that is suitable for growing hops, which is a key ingredient that SAB uses to make beer. However, the spread of alien vegetation in Outeniqua has made water conservation a challenge.  According to a report, alien vegetation is projected to reduce water run-off by 45% and use up to 60% of available water during dry seasons and droughts.

The rapid spread of alien vegetation therefore poses a significant risk to local economies, the beer production value chain, and all the livelihoods that depend on it. Invasive species compete for vital water resources, endangering the delicate balance supporting hops growth. Moreover, these alien species heighten the risk of wildfires, increasing the probability by 300% in the area.

This presented a unique opportunity for SAB to ensure that not only is water conserved in the area, but to also provide a solution to this problem.

In partnership with the World Wide Fund, the brewer has been able to not only contribute to ecological preservation, but to ensure that it drives economic resilience and well-being in the communities in which it operates.

Through the decade long partnership, SAB has ensured that there has been a removal of alien infestation from over 2000 hectares and a restoration of diverse indigenous vegetation and ecosystems.

Vice President for Corporate Affairs at SAB, Zoleka Lisa said, “For us, it is as much about protecting the production of hops as it is about the livelihoods that depend on agriculture in this unique region”. 

As a result of this partnership, a total of 10 billion litres of water has been released by clearing invasive alien plants and restoring indigenous vegetation.

“Through this project, we have not only been able to contribute to water conservation efforts, but we have seen a significant reduction in the risk of intense wildfires, protecting local communities and ecosystems”, Lisa said.

Through initiatives such as this, SAB and WWF have conserved vital water sources and catalysed biodiversity restoration efforts in the region.

“The enduring commitment to environmental stewardship in Outeniqua has yielded remarkable progress, marked by effective management strategies that have curbed the spread of invasive plants and delivered promising outcomes.

The collaboration between SAB and WWF exemplifies a commitment to water stewardship that transcends corporate boundaries. By integrating water conservation efforts into SAB's corporate strategy, we not only advance ecological preservation but also foster economic resilience and well-being within communities. This partnership stands as a testament to the transformative power of collective action in safeguarding our planet's most precious resource for future generations.

South African Breweries (SAB) records top-line performance

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In an announcement today (29 February), the South African Breweries (SAB) reported double-digit top-and high-single-digit bottom-line growth with record high full-year volumes for its financial year (FY) 01 January 2023 – 31 December 2023.

For the Full Year in 2023, revenue for SAB grew by the mid-teens with low-teens revenue per hl growth and a mid-single digit increase in volume. EBITDA grew by high-single digits, as top-line growth was partially offset by anticipated transactional FX and commodity cost headwinds.

Commenting on the results, CEO Richard Rivett-Carnac said, “Driven by commercial focus and the consistent execution of our strategy, the momentum of our business continued in FY23. Our portfolio delivered another strong performance in 2023 across all categories, gaining share of both beer and total alcohol according to our estimates, and we increased the overall Brand Power of both our beer and beyond beer portfolios.

Our core beer portfolio continued to outperform, with our global brands growing volumes by more than 30%, driven by Corona and Stella Artois. In Beyond Beer, our portfolio grew volumes by high-single digits led by Flying Fish and Brutal Fruit.

SAB AND MOLETELE COMMUNITY PARTNERSHIP BEARS FRUIT IN LIME FARMING PARTNERSHIP

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A lack of local supply of limes was affecting South African Breweries’ Corona beer’s authentic drinking ritual. The solution was a novel opportunity to invest in lime farming and in boosting local production, emerging farmers and their communities were significantly empowered.

SAB’s Corona beer is inherently linked to lime - a wedge of the citrus is traditionally served as part of the drinking ritual. Yet, as the beer became popular in the country, it encountered a severe shortage of limes. The business saw an opportunity to address that issue in a truly meaningful way that delivered value to people, the business, and the environment.

While limes are grown in South Africa, other citrus fruits are far more profitable. Of the over 90,000 hectares of citrus orchards in the country, less than 10% of the land is dedicated to limes. As a result, consumers either end up paying for expensive imported limes or they substitute them with lemons, which present a vastly different flavour profile. The opportunity, therefore, was to increase local production of limes to ensure that they were available to consumers, and at a lower cost than the imported crop.

The solution was a partnership between SAB, the Moletele Communal Property Association (Moletele Community) and Komati Fruit Group, in an exemplary Community Private Partnership (CPP), to establish and run a farming operation that would ensure reliable local production of limes. The Moletele Community made available one of their farms, Richmond Kopano Farm about 25km from Hoedspruit, which was on lease to the Komati Fruit Group. The CPP, which was entered into in 2020, saw SAB provide financial support to the tune of R19million, while Komati Fruit Group brought in farming expertise and skills development, and the Moletele Community contributed the land. All parties to the tripartite partnership are equally and actively involved, and that dedication has made Moletele Corona Limes, as the fruit is called, not only a reality, but also a benchmark for lime farming in South Africa.

Speaking at the launch, Minister of Agriculture, Land Reform and Rural Development, Ms. Thokozile Didiza highlighted that, "The Corona Moletele Limes project exemplifies the power of collaboration between private entities, communities, and the government, showcasing what can be achieved when we are all united for a common goal. This collaboration sets a positive precedent for future community-private partnerships in agriculture, showing a great potential to drive sustainable economic development. Stakeholders involved in the Moletele Limes project express optimism about scaling up successful initiatives to benefit communities, which is heartening. As government, we are encouraging similar collaborations across the agricultural sector, with equal impact on the farming industry as well as communities at large. It is a sure way to build a more resilient, self-sufficient, and prosperous agricultural landscape for South Africa."

“This partnership is a purpose-driven intervention that truly exemplifies the beer economy in action and shows the unique power of beer to propel South Africa forward. In our commitment to invest in local industries that are connected to our supply chain, we are anchored in the farming fraternity, especially emerging farmers. Moletele Corona Limes are born out of that charge, and the fruit of this partnership has elevated the production of limes in South Africa, ensuring an all-year supply of the crop. Equally important is the positive change that this intervention has brought to the community of Moletele, from dividends that go to the beneficiary families to job creation, skills development and skills transference,” said Zoleka Lisa, Vice President of Corporate Affairs at SAB.

As an active partner in the production of Moletele Corona Limes, SAB has an offtake agreement in the CPP to buy a guaranteed number of limes. The remainder of the crop is either sold locally or exported. This setup in the partnership ensures that the Corona Moletele Limes have a ready market in SAB, guaranteeing revenue with every harvest. To date, a three-phase planting plan has totaled the tree population to 34,092 lime trees in the 60-hectare farm.

The farm uses an innovative split-block technique where across six production blocks, the farm mimics different seasons to keep the trees flowering at different times, and for much longer. Various crop husbandry interventions used include overhead netting, manipulation irrigation and soil water regulation, creating a highly controlled environment.

The first full harvest in 2023 produced over 1.1 million limes. All the proceeds from the sales of Moletele Corona Limes go back to the 1,615 families that make up the Moletele Community. Further, the workforce that tends to the farm are from the community, with 12 people employed directly, and with indirect employment, both full-time and part-time, supporting up to 55 households.

“This partnership with SAB and Komati Fruit Group is bearing fruit, thanks to the commitment of all the three parties involved. Our livelihoods have been bettered, profits are coming in and we are doing all this sustainably. We have become the largest lime producer in the country – this project is indeed our future!” said Albert Thabane, Chairman of Moletele CPA.

“As the Moletele Community, we are proud to be custodians of this land and we believe that strategic partnerships such as this are critical for the profitable use and longevity of our farming operations. And longevity is an important consideration because we envision a future where this precious heritage, the entire Moletele land, is passed on to future generations,” continued Thabane.

“Moletele Corona Limes tell an incredible story of will and partnership between communities and the private sector. The production has added an additional excess of 60% of landmass to land previously dedicated to lime production in South Africa. These limes tell the story of partnership, growth, empowerment, and our unyielding commitment to this country. And importantly, thanks to Moletele Corona Limes, Corona lovers have the best quality fruit for the well-loved drinking ritual, all year long. This is a win-win for everyone,” concluded Lisa.

SAB has been investing in agriculture in South Africa for many decades with a strong footprint in barley production. In 2020, South Africa produced only 60% of SAB’s barley requirements and due to several successful partnerships in agriculture, the country’s produce has swelled to an excess of 20% of the requirement. Due to these partnerships, many emerging farmers have grown to become commercial farmers.

Entrepreneur Empowerment through SAB Retail Academy Launch

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Entrepreneurship is a key proof point of inclusivity. We meet entrepreneurs where they are today and work with them to get to where they want to be tomorrow Innovation and entrepreneurship part of the DNA at the South African Breweries (SAB), and its latest venture to empower just above 4500 retailers with business skills, is one such example. Launched during entrepreneurship month, the Retail Academy aims to empower retailers with skills, knowledge and tools to help their businesses thrive and operate as sustainable ventures.

The Academy is a digital platform where retailers will be completing business development training, including lessons in strategy, sales, operations, and finance among others. These skills are set to empower them and sustain their businesses for the long run. An additional feature of the academy is to train retailers on the importance of growing their businesses responsibly. This academy will further support retailers with material that will assist the operational areas of their businesses.

Barbara Copelovici, Director: Entrepreneurship and ESG at SAB said, “In recognition of entrepreneurship month, SAB reiterates its commitment to driving inclusive growth across our communities. We do so by focusing on upskilling women and youth entrepreneurs who are then equipped to make a meaningful contribution to the communities they operate in”

Although this academy is facilitated through the use of the BEES platform, it will be powered by SAB Sharp. This forms part of the ongoing Responsible Retailer Programme (RTP) where outlets are trained and audited in accordance with legal requirements and global principles based on responsible trading.

The pilot programme of the academy is currently being rolled out to over 4 500 retailers and this offering will be available to more retailers in 2024. To participate you need to be a licensed retailer currently trading with SAB and need to fall within the BEES regulatory standards set out for retailers.

Copelovici adds, “Through various programmes, SAB established entrepreneurship as a key priority that seeks to support social innovators, farmers, retailers and SMEs by driving growth through several empowerment interventions. The Retailer Academy is one such initiative that we are certain will make a huge difference in the lives of the entrepreneurs we partner with. In a country with an unfathomable unemployment rate, we have to do all we can to assist entrepreneurs to build successful and sustainable businesses.”

The overall goal of SAB’s entrepreneurship programmes is to support 35 000 small businesses and entrepreneurs by 2025, this includes support provided to women-owned businesses in townships and rural areas, farmers, retailers, and entrepreneurs.