Guayaki is an Argentine and US company that exports yerba mate, a kind of tea, to the US but its real aims are ‘social transformation and the environmental restoration of the rainforest’. Though it operates in classic non-profit territory, it’s a business, if an unusual one – one indicator Guayaki uses to measure its performance is the number of species of birds found in its growing areas. As Alex Pryor, its co-founder, explained to Alliance, his decision to use commercial means to achieve social and environmental ends stemmed partly from his qualms about the pure profit motive of business and his fear that foundation money sometimes comes from questionable sources.
He also feels that creating a business is more sustainable and more likely to foster independence in its beneficiaries.
In the rainforest areas of Paraguay, Argentina and Brazil, small communities living on the margins of national or state parks or private biological reserves are struggling to find an economic alternative to cutting down the remaining trees surrounding these conservation sites. Pryor, who, together with his university friend and co-founder David Karr, saw this first-hand as a student, had the idea of setting up a business to produce and market a product they could cultivate in these areas. If the company paid over the odds for the product – at 300 per cent above market rate, in fact – local growers would have the motivation and the means to restore or conserve the forest on their land, at the same time earning a living wage. He calls this process ‘market-driven restoration’. This creates benefits all round, he says: a higher standard of living for the growers, including improved education and health benefits, better working conditions, and a cleaner environment with rivers free from pesticides.
The product fixed on was yerba mate, a rainforest tea native to Paraguay, Argentina and Brazil which has a number of medicinal properties, which he decided to market in the US as an alternative to coffee. ‘After ten years,’ says Pryor, ‘we are having an impact in a 40-family community of Ache Guayaki Indians in Paraguay’. The company used their name as its brand name and is paying the Indians a royalty, teaching them how to grow yerba mate, and helping them ‘generate income so that they can sustain their livelihoods and build their communities’. Now, he says, ‘they’re the experts, teaching their neighbours how to cultivate it, selling the plants from their own nurseries, and tripling their income from what they receive as a royalty from Guayaki’.
In Argentina, Guayaki works with five growers, converting mate culture from sun-grown to shade-grown. The company is restoring the growing areas with 2,000 native species trees per hectare. ‘The farmers are realizing they can generate an income from a shade-grown yerba mate which has a lot less impact on the environment, which generates higher soil fertility, brings back the birds and generates a different livelihood for them,’ says Pryor.
Alex Pryor toyed with the idea of creating a non-profit but decided instead to start a business that would fulfil the same social and environmental goals but be sustained economically by demand for its product.
There’s a deeper reason, too, why he opted to create a business rather than a non-profit. ‘I was questioning the idea that the measurement of success is how much economic return you can bring to the business, regardless of how you conduct that business. You make your money and then, if you’re successful, you give some of it away. I was also aware that with foundations it is never very clear where the money has come from.’ He also felt that too often the supposed beneficiaries of foundation funding get very little of it, and that little creates a form of dependency. ‘Foundations seem to be donating constantly to the same projects and those projects never end up being sustainable in themselves.’
He sees a virtuous circle in which a small enterprise like Guayaki can help to make a big change. ‘As it scales up, the more products it will sell, the more small growers it will help, the more restoration will happen, the more trees will be planted. As long as the social and environmental indicators are sustained, the business will grow and sustain itself, and the environment and the social context will sustain itself as well.’
Other small businesses could get involved as well, he says. ‘We don’t want the people we work with to depend 100 per cent on Guayaki. We create bridges with other businesses, or we empower people to create their own businesses. That way, we help build the conditions for them to be able to do what they want, to really live their dreams.’