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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Canadian Market: Ditch your morning java and smell the guayusa

Wednesday, September 10, 2014 > 09:51:19

(Globe & Mail)

Many food products come at a hefty environmental and social price. Coffee and cacao, now household staples, are linked to deforestation in Brazil, and cacao farming in Côte d’Ivoire is associated with child labour. Quinoa has become so popular that the Bolivian farmers who grow it can’t afford to eat it.

With its production and marketing of a new kind of herbal tea, a Brooklyn-based company is attempting to sidestep these ethical pitfalls.

On paper, earthy and slightly sweet-tasting guayusa sounds guilt-free. Made with the leaves of a South American holly tree, this elixir is packed with antioxidants and is said to dispense energy (it has about as much caffeine as a cup of coffee) that lasts hours without any jittery side effects. In addition, Runa, the company that has a monopoly on guayusa exports, has created a business model that aims to preserve the rainforest and empower the Kichwa communities that live there.

Runa started out selling loose-leaf guayusa, but now the five-year-old company also offers infusers, cold, bottled tea and highly concentrated “Clean Energy” drinks. Its revenue jumped from $800,000 in 2012 to $2.5-million last year.

“We hope to be the Kleenex of Guayusa,” says Dan MacCombie, who co-founded Runa with Tyler Gage months after they graduated from Brown University in Rhode Island.

Gage learned about guayusa from the Kichwa, an indigenous group that lives in Ecuador, Peru and Bolivia, while doing linguistic research in the Ecuadorean Amazon. MacCombie, who was studying marine biology, decided to switch careers when the business plan the two friends made for a school assignment starting winning awards.

Around 2,500 Kichwa families grow guayusa for Runa, with women often taking the lead of production. “Since the beginning, people have increased their income by 10 per cent from guayusa,” says Eliot Logan-Hines, executive director of the Runa Foundation, a non-profit arm of the company. It isn’t a huge amount of money, but farmers can also tap into the company’s fair-trade fund to use for community development. Last year, the fund reached $44,000. Runa also offers a guaranteed minimum price – 35 cents per pound of fresh leaves – that will protect farmers from falling prices if there is a guayusa surplus.

The company doesn’t want guayusa to become the community’s sole source of income because it’s more sustainable to diversify. When farmers rely on a single cash crop, as is often the case with coffee, cacao and even guayusa’s leafy cousin, yerba mate, it leads to deforestation.

And diversifying also provides income year-round. The guayusa tree grows in a chakra, or forest garden, as part of a layered ecosystem that stacks plants such as yucca, corn, cacao and guayusa underneath the shade of big canopy trees. Tending a chakra allows money to come in at different times of the year while also enabling families to live off the land.

Runa is planning a big expansion in Canada, working with a major grocery chain that it says it can’t yet name. The company has around 30 employees in seven U.S. cities, in addition to 30 or so who work in Ecuador. This summer, it started shipping to Canada via e-commerce giant Amazon.com Inc.

“We think that guayusa has a huge opportunity to be the next coffee,” says Runa co-CEO MacCombie. Although the leaves are certified organic, fair trade and non-GMO, the company is thinking bigger than the health food store. “We don’t want to be another niche, natural, organic product,” he says.

Guayusa is the kind of thing that experts say Canadians want.

Harry Balzer, a U.S. expert on consumer eating habits and vice-president of NPD Group, a consumer marketing research firm, says that new products are more likely to carve out a permanent place in our diets if they are a replacement for something familiar. “The things that you tend to try are the things that you already know, they are just new versions of the same things.… [Guayusa] has a high likelihood of people trying it,” he says, adding that Runa is capitalizing on popular buzz words like caffeine, tea and energy.

The average Canadian consumer has around eight different types of tea in the cupboard from a variety of brands, according to research from the Tea Association of Canada. Louise Roberge, the association’s president, had never heard of guayusa, but says that there has been a lot of change in the tea industry in the past decade: No one was thinking about green tea in 2000 but now 25 per cent of the tea consumed in Canada is green. “Canada is certainly all about specialty tea,” says Roberge.

One of Runa’s largest wholesale customers of guayusa is Montreal-based David’s Tea, where the product is doing well in stores.

“I think everyone is surprised when they drink straight guayusa how smooth it is, whether it’s hot or cold. A lot of people ask me, is it sweetened? And I’m like, no, that’s just how the leaf tastes,” says Sarah Segal, who is on the board of directors for David’s Tea.

“It’s in our top teas. It’s a consistent seller. It’s been doing great,” she says.

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