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Argentina: Niche market in organic mate
The Tea & Coffee Trade Journal / August 2003

By Larry Luxner

BUENOS AIRES — Argentina's Establecimiento Las Marias is trying to crack the U.S. and European "radical organic market" with its new organic yerba mate.

Ever since its founding in 1924, Las Marias has been known as an exporter of tea and yerba mate — the traditional gauch concoction drunk by millions of people throughout Argentina, Brazil, Uruguay, Paraguay and Chile.

About four or five years ago, however, the company hit upon the idea of selling organic market to upscale, health-conscious consumers in the United States and Europe.

Among its selling points is the fact that yerba mate, gram for gram, has less caffeine than either coffee or tea, yet contains antioxidants and a variety of vitamins, minerals and amino acids that boost energy, fight fatigue and help lower cholesterol.

"Green tea has had tremendous growth in Europe because of its health benefits, and yerba mate is even healthier," said Javier Torres, foreign trade manager at Las Marias. He said that four or five U.S. companies already buy organic yerba mate in Argentina and package it in the States, but that his is the first company to export the finished product.

"We pack it here and seal it here," he said. "As a company, we assure this same taste every day of the year. Normally, if you harvest in summer and then harvest in winter, you'll have variations. We prepare a blend that we're ready sustain through time. If you don't like it, you'll never like it because there will never be a variation."

Three years ago, Torres and his marketing team redesigned the company's venerable La Merced brand to appeal to U.S. consumers.

"We wanted to express through packaging something that would give the image of South America," said the entrepreneur, whose English is fluent thanks to a year of high school in Michigan.

The result: an attractive new line of 100% organic yerba mate, available in six distinct flavors: original, chai, strawberry-vanilla, mint, lemon-ginger and mandarin-orange.

The packages retail in the United States for $5 per 20-bag box. Also available is a box containing a mate (drinking gourd) and bombilla (sipping straw) in fine alpaca silver for $10, as well as a gift box containing the mate, bombilla and a sampling of organic yerba mate for $15.

"Mate is like any other fusion, though it has some properties that make it an interesting drink, like the Indian rituals associated with it," said Torres. "Drinking it from the gourd, you get to live the experience."

The new product is similar to the yerba mate Las Marias produces for domestic, internal consumption, except that it is 100% organic. That means no pesticides, herbicides or fungicides were used to produce it, and that the final product itself is 100% natural, with no artificial colors, flavors or ingredients of any kind.

"Mate is like any other fusion, though it has some properties that make it an interesting drink, like the Indian rituals associated with it," said Torres. "Drinking it from the gourd, you get to live the experience."

The company's original distributor was a California company, Vini Imports Co. of Irwindale, though the account has since been taken over by Arizona-based Wisdom of the Earth.

"We recently launched into the radical organic market, in West Coast markets like Seattle, Portland and Southern California," said Torres. "These products are mainly sold in organic stores in the U.S., some of them mom-and-pop stores and some of them chains like Whole Foods. We're not limiting our business to the West Coast. It's just that they're more open to this type of product."

On the East Coast, La Merced organic yerba mate is available in Baltimore, Washington and a few other markets. In March, the company — along with 2,400 other manufacturers and retailers — exhibited its products at the 23rd Annual Natural Products Expo West convenion in Anaheim, Calif.

Torres concedes that organic yerba mate is a "niche product" that does not have mass appeal, and that chai and original are the most popular flavors. Las Marias does not sell organic yerba mate in the domestic market, but exports 100% of its production to the United States and various European markets like Sweden, Germany, Great Britain, Belgium, Holland and Finland.

"To break into this market, you need to invest a lot of money," he said, though he preferred not to specify how much his company has spent on the project so far.

Las Marias, which has 1,500 employees, owns around 1,300 hectares of tea plantations in the northern Argentine province of Corrientes. The company's annual sales have remained constant at around 130 million pesos. Before last year's devaluation, that was equivalent to $130 million. But now, that sum is worth only $50 million.

Torres says 70% of Las Marias' revenue derives from yerba mate, and the other 30% from conventional tea. But only 15% of the company's yerba mate is exported, because of the large internal market (as opposed to 40% of its tea).

"In the last few years, we have restructured our drying capacity, and now we have a fully integrated operation between field and drying, so we've reduced human contact with the product," he said, estimating that Las Marias produces around 4,000 tons a year.

While the company exports to Uruguay, Paraguay, Bolivia and a few other countries, one of its biggest export markets is the Middle East — mainly Syria, Lebanon and, to a lesser extent, the United Arab Emirates.

"Arab immigrants living here in the last century picked up the habit and brought it back to their countries, because mate, besides being a tasty product that boosts your energy, also brings back memories of sharing time with your loved ones," said Torres. "That's what makes it special. This fits in very well with Arab traditions."

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