EcoTeas team: Stefan, Brendan and Joseph

Joseph Chermesino - EcoTeas

March 2010

A conversation about the beginnings of a grass-roots company with an unique ethos, the growing popularity of yerba mate and why it may be the next big thing.

Yerba mate is quite an obscure concept for the average consumer, yet is continuously gaining in popularity. What are some of the features of yerba mate and how does it differ from the usual varieties of tea?

Botanically speaking, yerba mate is not related to Camellia sinensis (Asian tea) at all. A member of the holly family, yerba mate is known to botanists as Ilex paraguariensis. It grows as a small understory tree in the subtropical forests of eastern Paraguay, northern Argentina, and southern Brazil.

Yerba mate has a rich history of use by the indigenous Guarani people of the region. The Guarani first developed the method of pouring hot water over dried yerba mate leaves in a hollow gourd and sipping the infusion through a filter-tipped bamboo straw called a bombilla (bom-bee-ya). European colonists learned to drink mate from the Guarani in the 16th century. For millions of South Americans, sharing yerba mate with a bombilla 'traditional-style' has come to symbolize hospitality, friendship, and cultural identity.

Although yerba mate is technically an herbal tea or tisane, it does contain caffeine. The level of caffeine varies greatly depending on the method of preparation. A brewed cup of yerba mate contains slightly less caffeine than a typical cup of black tea. However, these levels increase dramatically when yerba mate is prepared 'traditional-style' with a bombilla.

It's important to note that yerba mate contains a medley of the three forms of caffeine found in coffee, green tea, and chocolate (caffeine, theophyllene, and theobromine, respectively). In addition, yerba mate supplies abundant B vitamins and minerals. Many people find the stimulation from mate less edgy and more physical than coffee or tea. Partly due to its appetite-suppressant qualities, yerba mate is often touted as a weight-loss aid.

Yerba mate is a rich source of antioxidants. The ORAC value of a cup of EcoTeas mate is 60% higher than an average cup of green tea.

The taste of yerba mate has been described as bitter or smoky. Some people find it objectionable, especially at first. However, brewing mate requires a bit of skill. To brew good mate, avoid using boiling water (170F / 75C is perfect), moisten the herb with cool water first, and steep for no longer than five minutes. When these instructions are followed, mate tastes great. The flavor is like green tea with gumption. Also, EcoTeas yerba mate is dried with warm air instead of the usual smoke, and this imparts a cleaner unsmoked flavor that many people prefer at first taste.

EcoTeas is a grassroots company on a niche market. How did you get into this business and what were some of the key steps in your company's development in recent years?

We started EcoTeas in the kitchen of a small house in Ashland, Oregon back in March of 2000. It was originally Stefan Schachter's idea to found a company to spread the availability of organically grown yerba mate in the US. He had learned about the tea while volunteering in Paraguay as a teenager.

Early on, he enlisted the help of long-time friends Brendan Girard and myself. Brendan was a social worker at the time, and I was a high-school English teacher. We shared a passion for organic gardening and healthy living. We blended teas in our back yard and served mate at regional farmers' markets and music festivals. In June of 2000, we acquired our first wholesale account in a local grocery store. We soon found ourselves traveling up and down the west coast of the U.S. promoting our brand in natural food stores.

The next leap forward came when we formed an exclusive partnership with the Kraus family farm in Misiones, Argentina. Their unique 'unsmoked' yerba mate was simply the best we'd ever tasted. It had a vibrant flavor and a rich, mellow body. The Kraus farm invested in us in the form of two full container loads of yerba mate, which was enough raw material to launch what turned out to be our top-selling product, a one-pound bag of pure leaf yerba.

We had witnessed the success of the loose-tea format in Argentine grocery stores, but even we were taken aback by the incredible success of this product in North America. The US tea market is largely driven by tea bags, but our loose one-pounder now ranks consistently among the top-selling tea products in the natural products industry nationwide. We still encounter skeptics in the industry who don't believe that our loose tea can succeed in their stores, but a brief glance at the numbers usually changes their minds. By streamlining our operation and maintaining focus, we've been able to offer a unique combination of value and quality that really appeals to the natural food shopper.

We've recently been pleased to achieve official recognition for our fair trade business practices. Swiss-based IMO (Institute for Marketecology) visited our farm, audited our books, and granted us their 'Fair for Life' status. We consider this a key achievement as we seek to keep pace with the evolving natural tea market. The USDA organic label has lost some of its luster in recent years, so we knew we needed to provide our customers with additional assurances that our tea is grown in a way that is sustainable and responsible. 'Fair for Life' was a great opportunity to do just that.

As you have pointed out, a major trend in the tea industry is convenience, with tea bags and ready-to-drink beverages dominating the market. Is yerba mate suited for this role and, alternatively, how can the category evolve to satisfy this need?

Actually, yerba mate is an ideal ingredient for the ready-to-drink energy beverage category. It is unique among stimulants for its 'triple-punch' of nutrition, antioxidants, and balanced physical stimulation. In the current functional beverage environment, it's only a matter of time before yerba mate awareness explodes in this country the way it has in South America.

Rather than getting into the complex business of selling bottled teas, we made a conscious decision from the beginning to become active in the supply business. To meet this need, we currently maintain a large quantity of 40-pound bags of our signature pure-leaf, unsmoked yerba mate in a warehouse in California. We also import full container loads of yerba mate of a variety of cuts, ages, and drying/roasting methods and ship directly to manufacturing plants.

Beverage manufacturers choose our yerba mate supply for a host of reasons. Our pure leaf cut is not only potent, it is also very clean and dust-free. Meanwhile, our unsmoked taste is versatile and neutral. We are also 100% certified organic, fair trade, and kosher. We have an active reforestation program creating shade and protecting biodiversity, and of course we give our customers full access to this positive marketing story. At this point we have a decade of experience importing yerba mate from Argentina.

As the category evolves to include the bigger players, we'd love to maintain the association that yerba mate has with organic agriculture, fair trade, and rainforest restoration. Like chocolate and coffee, yerba mate can be grown in so many ways, from small subsistence plots to huge mechanized operations with lots of agricultural chemicals. Unlike those two major commodities, yerba mate has acquired a reputation from the outset in our country as an ecological tea. As awareness of yerba mate continues to expand, we intend to do all we can to keep yerba mate's product integrity intact.

The story behind EcoTeas is very inspiring. What are some of the features that distinguish EcoTeas from other players on the market and how do you foresee the company’s vision developing in the future in terms of business practices, product innovations, marketing and other initiatives?

Thanks for the encouraging words! In the day-to-day grind of running a business, it can be easy to forget all the grace we've received along the way.

As far as what distinguishes EcoTeas, I believe we have a unique combination of common traits. For instance, lots of companies sell organic and fair trade teas. Likewise, many companies focus on providing high-quality loose teas. There are also quite a few tea companies that aim to attract customers through everyday low pricing. Some of these 'EDLP' brands may even state as an explicit point in their marketing plan that they want to be on people's shopping lists the same way that people buy eggs, milk, or bread. However, I don't know of too many other brands that combine all these traits into one product line the way we have. That's what makes us unique.

To elaborate, we would rather see our products in 10 shopping baskets than 100 gift baskets. Have you ever noticed how gift-oriented loose teas often migrate to the dark back corners of cupboards where they slowly go stale until they finally get thrown out when people move? I have no desire to see my own products languishing back there among the bamboo canisters of oolong and macha that sell for $20 an ounce! It's no wonder the market is dominated by tea bags and bottles when the alternatives are so expensive and obscure. We want to bring tea to the masses in a healthy, sustainable, affordable way.

Going forward, we want to do more of the same. We want to continue to increase the presence of our top-selling one-pounder. It's the kind of product that really ought to be everywhere coffee or tea is sold. We are systematically switching to compostable packaging for our entire product line. We are also excited to continue to supply the rest of the tea industry with yerba mate for all their tea bag and bottled beverage needs.

Sustainable practices are very important to EcoTeas. How do such initiatives tangibly contribute to improve the conditions of plantation workers and the environment?

This is a great question. I think about it a lot, actually. If fair trade certification doesn't produce tangible results for the workers and the environment, it's just a hollow logo affixed to the front of package labels. We're glad to finally achieve the certification, but we can't be complacent now that we have it.

First of all, the fair trade model provides farmers not only with a better price, but also a guaranteed price. Before they even start planting, farmers know exactly what they will be paid for their goods. Farmers working outside the fair trade model must often contend with fluctuating prices on the world market. This makes it very difficult to run a successful operation, pay employees, invest in the future, etc. With stabilized pricing, our farmers can turn their attention to growing the best yerba mate in the world.

We also provide our farmers with technical assistance for certifications and logistics. We have helped them acquire more land and expand their organic certification to this land. With our assistance they built a new warehouse to age their tea. Our farmers themselves have contributed to the construction of a local school and health clinic for their workers. Rather than treating our farmers like mere producers of an ingredient, we see the relationship as a long-term, mutually-beneficial collaboration. As they thrive, so do we.

A new innovation that arose through the certification process was the development of a special fair trade fund. A portion of the sale of each kilo of tea we purchase from our farmers goes directly into a special fund for the workers. The workers actually get to vote on how this fund will be used. For my part, I'm super curious to see how this fund bears fruit in the coming years!

The final piece of our fair trade puzzle is our reforestation program. We plant thousands of diverse native trees on our partner farm each year. These trees provide shade, protect soil, enhance biodiversity, and generate additional income through fruit and timber. We've experienced a steep learning curve about what, when, where, and how to plant, but we've had some great assistance from universities and NGO's along the way.

When you consider it from a broad perspective, fair trade is more than simply a cost of doing business in the natural marketplace. It's an investment in a superior product from an assured long-term source.

And from your company's perspective, how has the interest in Fair Trade and Organic products, which usually carry a heftier price tag, been impacted by the economic downturn?

I don't think anyone has really thrived in the recession, but the natural products industry has weathered it better than many other industries. In general, the economic downturn slowed the expansion of natural products into new demographics that have not traditionally enjoyed them. We saw fewer new store openings. Foot traffic in existing stores seemed to slow a bit. Meanwhile, many of our supply customers grew cautious about launching new products. A major supply customer of ours actually went out of business due to their inability to find new sources of venture capital during the height of the crunch.

Fortunately, the recession didn't really hurt us among our core customers. Due to our pricing structure, product format, and explicit brand message, our products generally appeal to the segment of the natural market that is deeply committed to the organic lifestyle. These are not people who are exploring organic foods because they recently read an article about growth hormones in milk, for instance. Our core demographic is younger, more highly motivated, and less affluent to begin with than the new wave of natural shoppers. They hold a deep concern for the health of their bodies and the planet. They likely grew enthusiastic about natural foods while they were still adolescents or in college, and at this point natural foods are an integral component of their identity. The economy would have to get a lot worse for these folks to give up on organics.

Our sales actually stayed steady during the recession. We didn't grow as quickly as we had been growing, but the slow-down gave us a chance to catch our breath, tighten our business model, and get ready for the next big growth spurt.

Looking ahead, how do you see the Yerba Mate market evolving several years from now both domestically and internationally? What trends will drive the market?

I have no doubt that yerba mate is going to continue to expand in popularity in this country and beyond. It has so much going for it, and it appeals to so many different people for different reasons.

Yerba mate has been flying under the radar in the US for decades. It has gained a firm foothold in US college towns, urban centers, and other progressive bastions. In the coming months and years, ready to drink beverages are going to help yerba mate spread beyond this core into the suburbs. I bet we see it showing up as a stand-alone or flagship ingredient in bottled tea flavors from the major conventional brands in the next few years. Also, I foresee big growth in yerba mate powder used as an ingredient in supplements for weight loss and natural energy.

A lot of this initial growth is going to leave our EcoTeas brand behind, but we're excited to help supply the companies that do expand into these niches. And as the ready-to-drink and supplement sectors expand, we'll be there to provide high-quality loose yerba to the recently converted.

Combining his love of healthy living, travel, and organic agriculture, Stefan Schachter founded EcoTeas in the year 2000 in the kitchen of a small house in Ashland, Oregon. EcoTeas' winning formula of great price, superior quality, and unwavering commitment to organic agriculture and fair trade has propelled their one pound bag of yerba mate into the upper echelons of the US natural tea market. Year after year, it consistently ranks among the top-selling organic tea SKUs in the nation.

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