Budweiser, Jiangsu Nongken team up to boost malting barley output

With China pushing for closer cooperation among State-owned enterprises and private and foreign companies in accordance with the principles of marketization, Budweiser APAC, a regional unit of AB InBev, the world's biggest brewer by production volume, sealed a new cooperative deal with Jiangsu Nongken Group to boost malting barley output and better take part in the country's poverty alleviation campaign.

Taking advantage of China's land circulation-related policies in the rural areas for the first time, the partnership, with Jiangsu Nongken, the State-owned agricultural business company in eastern China's Jiangsu province, will involve local growers as one of contracting parties, so that they can access practical financial benefits and fully share the results of industrial development, said Jan Clysner, vice-president of procurement and sustainability at Budweiser APAC.

Budweiser plans to acquire 25,000 metric tons of barley on an annual basis from the long run, covering more than 3,000 hectares of farmland and benefiting between 4,000 and 5,000 local farmers and their families.

The partnership will further drive the standardized and scaled planting of local beer barley, thereby creating a benchmark for China's beer barley industrialization in deliveries including quality and output, he said.

By working with Jiangsu Nongken, Budweiser seeks to tap into the whole industry chain, starting from the source, realizing "from farm to table" food safety traceability, and fostering local beer brands with quality local ingredients.

This represents renewed cooperation after the two companies inked a strategic partnership agreement in 2016, confirming a series of in-depth collaboration in areas including breeding, crop management, agronomical technology innovation and barley management platforms.

Amid changing market demands, Budweiser and Jiangsu Nongken seek to continue jointly driving the high-quality development of the Chinese beer barley industry and to proactively explore new approaches to benefit local growers this year.

"Even though China is the world's largest beer producer, the country's beer products have been highly dependent on imported malting barley for a long period," said Clysner, adding coupled with the global market uncertainties occurring in recent years, it is imperative for the country to grow more malting barley to ensure the raw material supply in this sector.

Budweiser will continue to promote malting barley planting in China as well as the cultivation of new varieties for malting barley, provide technical support, and advance the order-based operational model to push the growth of the domestic malting business, he said.

In terms of climate and soil conditions, Jiangsu, especially in its northern part, is the most suitable region for the growth of malting barley. Its well-developed logistics network will also provide convenience for many of Budweiser's plants operating in the province.,

"Budweiser's contribution to the local economy has been evident for many years, and this strategic cooperation is undoubtedly the first in the beer industry. Under the new memorandum of understanding, local farmers are expected to become direct beneficiaries through a dual-earner model," said Hu Zhaohui, general manager of Jiangsu Nongken.