Guayaki and the Rainforest: The Business of Giving and Receiving
May 19, 2010
By Bette Mc Donnell
“Each person that drinks two servings per day of Guayakí Yerba Mate helps protect approximately one acre of rainforest every year,” says Chris Mann, CEO of Guayaki. The mate (pronounced “mah-tay”) tree is native to the South American Atlantic forest, is environmentally sustainable in the long term, and provides more income per acre than cattle or agricultural products such as corn, soy, or wheat. Backed by the power of this knowledge, Guayaki’s founders articulated their company’s mission as: To steward and restore 200,000 acres of South American Atlantic rainforest and create over 1,000 living wage jobs by 2020.
The path to this vision began in 1996 when Alex Pryor, from Argentina, and David Karr, from California, met as students at Cal Poly San Luis Obispo, California. Alex had come to the U.S. to study food science and, knowing the energizing and rejuvenating effects of mate, believed that many would one day come to appreciate his country’s national drink. At the same time, he identified a convergence of themes—people were discovering a) green tea’s healthful properties, b) hearing more about the destruction of the rainforest, and c) learning more about the plight of the native forest peoples. The synchronicity of the meeting and the similarity of both men’s approach to life resulted in the launch of Guayaki that very same year. David and Alex were quickly joined by Michael Newton, Chris Mann, and Steven Karr, who make up the founding Semillas (Seed) group. Their primary purpose was to create a market for yerba mate in the U.S. while preserving the rainforest.
Preserving the company’s mission and values was of paramount importance when seeking capital to help finance Guayaki’s growth. For this reason, Chris Mann turned to RSF. “At its heart, Guayaki is a set of deep relationships grounded in our work to leverage business as a vehicle for driving social justice and rainforest restoration. RSF’s support of values-aligned organizations provides a strong foundation for us both to learn and grow together,” Chris says.
In 2009, the RSF Mezzanine Fund, L.P. provided mission-aligned growth capital to the company which provides a market rate of return for RSF’s Limited Partners through a revenue participation agreement. The patient capital allows the company to grow without requiring a liquidity event such as a company sale or an Initial Public Offering. As a result, the company is assured that its mission and values will not be compromised. “Guayaki is a leading example of how a for-profit enterprise can make the world a better place to live. Chris and his team embrace world-class sustainability principles throughout the entire organization, making Guayaki’s mission and management’s intentions completely aligned with RSF’s values and a pleasure for us to serve,” says Joe Avenatti, Managing Director, RSF Capital Management.
The company has pioneered an innovative business model, Market Driven Restoration, that links customers’ purchases to its partner farming communities in the rainforests of Argentina, Paraguay, and Brazil, where indigenous communities are engaged in sustainable agriculture and reforestation projects. The farmers harvest the yerba mate, generating a renewable income stream that enables their communities to improve their lives and restore their lands. Guayaki works closely with them, and encourages the cultivation of the plants under the native rainforest trees. It also provides technical advice on how to create nurseries, and helps with managing the organic growing process from cultivation through harvest with the final result being Guayaki’s purchase of their harvests—all at fair trade prices.
It’s fitting that nature’s bountiful supply of this health-giving tree provides the means for sustaining livelihoods and the means with which to bring the forests back into balance.
For more information about Guayaki, visit www.guayaki.com.
Bette Mc Donnell is Editorial Manager at RSF Social Finance.
- Published by Bette McDonnell
- Categories: Blog, Ecological Stewardship, Food & Agriculture, Lending
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