AB InBev to invest R610m in raising hop production

SABMILLER and Anheuser-Busch InBev’s (AB InBev’s) R610-million investment in the agricultural sector is set to turn South African Breweries Hop Farms (SABHF) into a net exporter and grow production by 250 tons annually.

The global brewer announced yesterday it was committed to investing R610m by 2021 in raising hop production, creating employment and upskilling workers by investing in research and development.

The AB InBev Hops Network workshop, an annual event held with global brewers and innovation teams, is under way in George, one of only four places in the southern hemisphere where hops have been successfully cultivated since 1935.

Cultivation

The aim of the Hops Network is to introduce South African varieties to the AB InBev craftbeer industry and innovation department.

There are 424 hectares of hops under cultivation in the southern Cape.

SABHF and contracted private growers harvest less than 1 percent of the world’s production of 855 tons a year. Of this, about 735 tons are for SAB and the local craft-beer industry, while 120 tons are exported to the rest of Africa, primarily for SAB beers.

AB InBev supplies the local market with more than 20 tons of hops annually.

John Rogers, AB InBev Africa’s director of raw material procurement and agricultural development, said the company would support smallholder farmers by financing 800 new emerging farmers and 20 new commercial farmers to produce hops, barley and maize, with the aim of creating 2 600 jobs in the agricultural supply chain.

AB InBev would offer incentivised pricing structures and preferential loans for emerging farmers.

“AB InBev will use our global experience to help enhance agriculture and enterprise development in South Africa, building on SAB’s current programmes to promote black entrepreneurs and enterprise development, with a particular focus on agriculture and agro-processing.”

Although hops is a labour-intensive crop and expensive to grow, SAB has plans to help emerging farmers cross the barriers to entry.

The company was increasing its investment in research and development, offering incentivised pricing structures and preferential loans for emerging farmers, as well as long-term contracts of up to 10 years to buy their hops.