A Tree-Hugging Tea

Feb 23, 2011 // 1 comment // Categories: Business, Feature News.

As a college student in california in the early ’90s, Alex Pryor always kept some of his native Argentina with him. His link to home was a beverage made from the leaves of the yerba mate (mah-tay) tree that, cup for cup, provides more than half the caffeinated zap of coffee with fewer jitters and an abundance of antioxidants. As more of his college buddies cozied up to the drink, Pryor saw the glimmer of a business. But the lightbulb moment happened in Paraguay in 1995 when he first spotted a yerba mate tree growing in its ideal habitat–in the shade of a rain forest that happened to be owned by his godfather. Pryor struck a deal: if his godfather planted hardwood trees in the rain forest’s degraded areas and started growing mate along with them, Pryor would buy the output. The following year, he founded Guayakí with David Karr, a college friend and mate aficionado.

Guayakí’s pioneering work is making yerba mate mainstream and profitable while operating sustainably. Last year Guayakí sold 180 tons of the stuff in the North American market as loose-leaf mate, ready-to-drink bottled mate, tea bags and energy shots. With revenues growing 35% annually, sales of $12 million are projected for 2009. Increased demand has allowed Guayakí, headquartered in Sebastopol, Calif., to help restore 17,000 acres (6,800 hectares) of rain forest.

Pryor’s South American team partners with farmers, small businesses and indigenous tribes that own rain-forest property that has been partially deforested for commercial crop-growing. “Once the owners agree to partner, we provide technical advice on how to create nurseries, help them manage the organic growing process from cultivation through harvest and then buy what they produce,” says Pryor. The owners, in turn, must repopulate their rain forest with native hardwood trees–which restores the land to its original shaded, biodiverse state–and provide decent pay and working conditions.

That’s admirable, but there’s a competitive complication: “It’s no secret that agribusiness has been buying up swaths of South American rain forest,” says James Cooper, an assistant dean at California Western School of Law, whose specialty is Latin American development. Keeping one step ahead of cash-rich conglomerates isn’t Guayakí’s only headache. “The question of who legally owns rain forests is, for the most part, an unresolved issue,” says Christine Hunefeldt, director of the Center for Iberian and Latin American Studies at the University of California at San Diego. Two decades ago, she says, Brazil began selling off rain forest, mostly to foreign companies to develop, appropriating ancestral land in the process.

In contrast to this landgrab, says Hunefeldt, sustainable development can protect against land loss because there’s now proof of sustainable commercial endeavor. In June the Aché Guayakí, an indigenous tribe in eastern Paraguay, celebrated its first mate harvest. “The leaves were exceptional, and next month we’ll begin selling Aché’s Pride as a gift item online,” says Pierre Ferrari, vice president of marketing. Guayakí has also been paying a licensing fee to the 45 families that make up that community for use of the tribe’s name. “This was the first time the Aché Guayakí entered into a partnership with a for-profit enterprise,” says Karr. The tribe has plans to increase output. In the rain forest, as elsewhere, money talks.

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