Tiger Brands boosts procurement from black women-owned enterprises

Tiger Brands, the largest food producer in South Africa, is making strides in boosting procurement from black women-owned enterprises as part of its diversity program. The company is actively working to increase the R4.2 billion it spends annually in procurement from black-owned enterprises, particularly those owned by black women. In a recent interview with CNBC Africa, Litha Kutha, Director of Enterprise Supplier Development at Tiger Brands, discussed the company's efforts to support smallholder farmers through its aggregator agricultural program. The program aims to address the challenge of scale disparity between large food manufacturers like Tiger Brands and smallholder farmers who struggle to supply at scale. Kutha explained that Tiger Brands has set up a Black industrialist program in the agriculture industry, which involves partnering with Black farmers who aggregate the volumes of smallholder farmers. By consolidating the farmers' volumes, Tiger Brands can source supplies at scale. The company provides financial support to the aggregators, who in turn lend to the smallholder farmers for input finance, enabling them to plant crops for Tiger Brands. Additionally, Tiger Brands offers off-take contracts to the aggregators, who then distribute them to the smallholder farmers based on their scale. The company also provides grants to the aggregators for training programs to enhance the technical and agronomy skills of the farmers. This comprehensive approach allows Tiger Brands to expand its reach to more outgrowers and small farmers while ensuring the supply chain operates efficiently. The two-tier pricing system implemented by Tiger Brands ensures that both the aggregators and the farmers receive competitive prices that enable profitability and sustainability. The company focuses on empowering black women and youth through its program, with a mandate to include 40% black women and 30% black youth among the outgrowers. Since its inception two years ago, the aggregator program has already enrolled 140 farmers, four aggregators, and 70 women participants. The program has facilitated procurement of approximately R300 million, benefiting smallholder farmers who would not typically engage with a company like Tiger Brands due to scale limitations. Looking ahead, Tiger Brands has set a target of channeling R1 billion through the aggregators to support black smallholder farmers. The company acknowledges the financing gap and seeks strategic partners in the private sector and government to bridge the funding needs. With plans to secure R700 million in collaboration, Tiger Brands aims to achieve its ambitious goal of empowering black farmers in South Africa. Kutha emphasized the importance of financial inclusion and expressed confidence in reaching the target, having already achieved 30% of the goal within two years.