Alex Pryor: Market-Driven Restoration

Alejandro Litovsky

April 15, 2010

Guayaki is a company pioneering an agricultural production model in balance with the forest in South America. It produces mate, the South American tea leaves, by harvesting below the forest canopy. The model proposes a business alternative to deforestation, while providing growth and jobs in local communities.

In this interview in March 2010, Colin Ma, an intern with the Pathways to Scale program who is completing his MBA at the London Business School, talks to Alex Pryor, co-founder of Guayaki about how his ‘market-driven restoration’ model can scale-back the logic of deforestation. See the Biosphere Economy for more information on this area of work at Volans.

As of 2010, as much as 95% of the South American Atlantic Rainforest has been deforested. Guayaki is committed to bucking this trend with the sustainable harvesting of yerba mate – the chief ingredient of a cherished South American beverage – and its ‘Market Driven Restoration’ model.

Guayak’s ‘Market Driven Restoration’ model centers on the natural cultivation of yerba mate under the shade of rainforest canopies. By developing a market for yerba mate grown under rainforest shade, Guayaki has effectively been incentivizing the

conservation and restoration of the rainforest with its business model. The value that Guayaki extracts via the model has proven to be sustainable and beneficial to consumers, the environment, and natives whose livelihoods depend on the rainforest. Combining this model with the efficiently carbon-negative production and distribution process with which Guayaki executes its strategy, Guayki has clearly set a new standard for achieving success as a business that has the environment’s interests at its core.

Colin: What inspired you to launch Guayaki?

Alex: Growing up in South America, I saw the destruction of the rainforest and the environment firsthand. While studying in California, I was exposed to new ideas on doing something positive for the environment. It was also during this time that I came across “triple bottom line” business models or concepts such as “natural capitalism”, and learned about how business can be instrumental in bringing positive environmental and social change. It all came together when I introduced to my friends in California yerba mate and realized that it can be the focal point of a business opportunity that internalizes possibilities for positive environmental and social change.

Colin: What are the inner workings of Guayaki’s ‘Market Driven Restoration’ model?

Alex: The model incentivizes natives who rely on the rainforest for income to c

ultivate yerba mate under the shade of native rainforest trees. With the harvested yerba mate, Guayaki produces its brand of yerba-mate beverage products and then sells them to international markets. When income in the form of a living wage is distributed to the native growers, the natives are effectively introduced to a renewable income stream that is more attractive than alternative and unsustainable income streams that involve practices that destroy rainforests.

Instead of harvesting the rainforest through destructive means such as logging or cattle grazing, natives now see value in preserving and even reforesting the rainforest given the rainforest’s existence provides sustainable economic value in the form of Guayaki’s yerba-mate products.

Colin: What is the impact that Guayaki wants to create?

Alex: Looking ahead, Guayaki is aiming to steward and restore 200,000 acres of the South American Atlantic Rainforest and create over 1,000 living-wage jobs by 2020. Focusing on both social and environmental impact will continue to be the core of our mission.

Colin: How can Guayki and its mission achieve scale?

Alex: Achieving scalability will take time. It takes time to partner with natives and help them understand what we are trying to accomplish and their roles in the process. It takes time to identify the right mix of components that should be included in developing a productive ecosystem that only consists of natural components. And of course, it takes time for the rainforest to grow back!

Understanding these points is critical for us in developing a scalability strategy that is consistent with our values. In many ways, the best way to scale our mission is to continue to stay true to our values and achieve lasting success that would inspire others to replicate our model in this or other product spaces. It is important not to compromise the underpinnings of our mission for the sake of scaling our business.