Farmers contracted to supply sorghum for beer making are struggling to meet high demand for the crop from the region’s biggest brewer, presenting an investment opportunity for producers in areas where the crop is planted.
Rose Mutuku, the managing director of Smart Logistics Solution— which is contracted by East Africa’s biggest brewer, EABL, to supply sorghum— said even increased acreage of the crop by farmers in semi-arid areas has not helped to meet demand.
“We are currently working to improve our production that is about a third of the demand of about 32,000 tonnes. We have producers in Eastern and Nyanza provinces and we are recruiting more by the day,” said Ms Mutuku.
East African Breweries (EABL) is currently scouting for farmers to produce the commodity on contract to reduce its reliance on the more costly barley to produce its non malted beer brand Senator Keg.
The brewer has said that it is keen to replicate the success of Senator brand by rolling out another low-cost brand, making reliable source of supply of sorghum critical.
In addition to Eastern Province, EABL has widened its contract offers to sorghum farmers in Narok, Baringo and Nakuru.
“The rush to produce sorghum is particularly catching on in the dryland areas where other crops such as maize have failed to perform well. Because of its fairly high tolerance to dry conditions, farmers in dry regions are now finding better use for their land,” said Ms Mutuku.
The firm argues that the cheaper sorghum-based beer will also allow it to capture a huge chunk of the bottom end of the market that has remained in the hands of illicit brewers.
This coincides with the new alcohol law has legalised traditional liquors that will now be subject to health standard controls.
“This new sorghum growing initiative in semi-arid areas is expected to impact the livelihood of farmers while providing us with affordable raw material,” Peter Ndegwa, the finance director at EABL told the Business Daily in an interview last month.
“Barley is a commercial crop and it tends to be influenced by international market dynamics as opposed to Sorghum which is more of a food crop,” he added.
Good rains over much of 2010 helped shield the brewer from the volatility of international prices thanks to a bumper barley harvest.
Ms Mutuku said a shift towards healthy foods was also driving demand for sorghum in the country.
Lack of a ready market for the crop has seen sorghum production in Kenya drop from 220 metric tonnes per year in 1980 to 130 metric tonnes in 2009, according to data by United States Department of Agriculture.