Empower the front lines
Business units and local teams interact closely with consumers, communities and other societal stakeholders in their day-to-day work. If empowered, they can become successful “intrapreneurs” who can spot high-potential social innovation opportunities relevant to day-to-day business.
Historically at SABMiller, innovation is driven at the country level, allowing teams to respond to local contexts and challenges. Geography can be a useful dimension for identifying social opportunities in a global company. A prime example is the “localization” of the brewing company’s supply chain in Africa, which began in Uganda in 2002 when a conversation between the regional Managing Director and Uganda’s Finance Minister unearthed a mutually beneficial opportunity: local sourcing of grains for brewing operations.
Such an initiative was attractive to SABMiller for several reasons. Sourcing more affordable raw materials locally helped reduce reliance on barley imports from Europe, thereby reducing costs. Sales growth was challenging in a static market, but creating a local supply chain and offering farmers an assured market helped strengthen the company’s relationship with local communities and created significant economic opportunities for the smallholder farmers themselves. Perhaps most importantly, such an initiative would build trust and a track record of partnership with the government, which was looking for ways to promote the inclusion and economic development of Ugandan farmers.
The SABMiller team and the Ministry of Agriculture jointly evaluated a number of Ugandan crops as brewing ingredients, with a local variant of sorghum proving the most viable. The company worked on modifying the brewing process in order to replace malted barley with sorghum, and the resulting new product – Eagle Lager – became highly successful, now accounting for over 50% of the sales of SABMiller’s Ugandan subsidiary, Nile Breweries. Given the local production, Nile Breweries also benefited from an excise rate of 30% for Eagle instead of the 60% levied on beer brewed from imported ingredients, reducing the retail price and offering a high-quality, affordable alternative to unregulated and dangerous illicitly produced local brews.
Subsequently, SABMiller businesses in other parts of Africa replicated the model using locally sourced sorghum, maize and cassava; today, local sourcing is a key part of SABMiller’s Africa growth strategy. To continue to incentivize and motivate business units, the company visibly showcases such activities through corporate recognitions, including the Mackay Awards, which highlight initiatives that grow the business while having social and environmental benefits. In addition, the Executive Committee and the Corporate Affairs team are mandated to ensure that regional teams are globally connected to enable successful innovations to be replicated across markets.
Home page image: REUTERS/Pichi Chuang