Why Heineken is developing a sustainable strategy for its sourcing operations
The sustainability strategy for Heineken is called Brewing a Better World, and the critical part is sourcing locally. Through this, Heineken is supporting the sustainable development of agricultural supply globally. It depends on a supply chain that is responsible and transparent to grow its sustainable business and risk management. Heineken, a large buyer of crops, plays a role in protecting natural assets and biodiversity while feeding the population that is growing globally through productivity in agriculture. It eventually has a significant benefit to communities’ local economic impact.
How the sustainable strategy is beneficial to Heineken
The sustainable strategy helps Heineken to achieve its supply chain goals and business goals. To grow its business, increasing sustainable volumes of raw materials through the development of agricultural supply chains is crucial. It has supported farmers’ livelihoods through increased capacity of processing and ensuring better market accessibility. It also benefits by reducing duties related to imports and a sustainable raw material supply for its products. It has benefited the business to make a difference through focusing its efforts and ensuring positive contributions while limiting its negative impacts.
Challenges of implementing sustainable strategy in the developing world
The African region shows a prolonged development crisis with extreme levels of poverty accompanied by a high population. It shows there will be competition from the company for a limited number of raw materials. Moreover, implementing a sustainable sourcing strategy in these developing countries poses a challenge since the continent doesn’t have sufficient capacity to manage its resources, such as oil and minerals, sustainably. In addition, the continent’s climate is vulnerable, and the yield of crops will majorly show negative impacts in many scenarios. The poor infrastructure, such as poor road networks, will affect the sustainable sourcing strategy long term.
Tracing the supply chain can also become a challenge since many African businesses’ products are sourced from overseas. Other conditions such as the current illiteracy rates in these countries, low income per capita, intentions of developing countries’ governments in business platforms, high rates of corruption and bribery by government personnel with high ranks, and regional conflicts provide sustainable proof of the related risks of implementing sourcing strategy in the developing countries such as in Africa as compared to Europe which has a more stable politically and economically.
How Heineken can support the sustainable initiative in Africa
Heineken can use its business as a positive factor for change by helping communities prosper, hence promoting good for the business. It is committed to ensuring additional contribution to the lives of communities it works and sells its products. It can be through the creation of employment opportunities and purchasing of raw materials such as barley as the most significant contribution to the well-being of these communities both socially and economically. Payment of taxes responsibly is also an essential aspect of contributing to economies locally in supporting developing countries by complying with the relevant regulations concerning tax payment, directing its focus on these countries where it intends to foster a change by uniting its operating companies and inspiring brands as well as tackling the issues environmentally and socially in Africa.
Incurring Costs in Sustainable Initiative
In sustainable sourcing, corporations incur costs and take full responsibility for themselves and the environment since an organization applies this approach to procure products for its operations and ensure it does not negatively impact its business. Organizations have therefore recorded improvement significantly through sustainable sourcing practices.