Guayaki Wants to Take Yerba Mate from Niche to 7-Eleven Staple

Yerba mate -- a caffeinated South American drink brewed like tea from the dried leaves of the mate plant -- is a niche product in North America. Guayaki wants to take it mainstream. The 40-employee Sebastopol, Calif., company is trying to prove that a beverage popular with Whole Foods customers can win over 7-Eleven and Kroger’s shoppers, too. Selling loose mate leaves and bottles and cans of the brew, 14-year-old Guayaki had $10 million in sales last year and is projecting $13 million in 2010. Few other beverage makers sell mate in the U.S. Two Coca-Cola brands recently entered the market: Honest Tea launched a mate line last year and Minute Maid started selling juices flavored with the herb in March.

Guayaki also wants to use its business to rescue the forests in Brazil, Argentina, and Paraguay, where mate is grown. To date, the company says it has restored 20,000 acres of forest. As part of the Clinton Global Initiative, it committed to restore 40,000 acres of the Atlantic Rainforest in southern Brazil and create living wage jobs for 250 families in the area’s indigenous Marrecas community. Now it’s seeking $1.5 million in grants and loans from the initiative’s partners to meet that goal in the next two years. Guayaki co-founders David Karr and Alex Pryor, both 39, spoke recently with Bloomberg.com’s John Tozzi about expanding their business and their social mission. Edited excerpts of their conversation follow.