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A collection of posts relevant to agricultural and environmental matters such as farming, agribusiness, water, sanitation, natural resource management, and sustainability.

Monday, December 17, 2012

Runa Wins WWF Switzerland Tropical Forest Challenge : The social enterprise has a taste tea and conservation

By Allison Langille

Runa derives its name from the Amazonian Kichwas, who refer to themselves as Runas, which means men. Runa's tea is grown by 2,000 indigenous families in the Ecuadorian Amazon. (Image credit: Runa)

 

Like many great businesses that are social by design, Runa was born out of experiencing a troubling consequence of global development first hand – in this case – deep in the Ecuadorian Amazon.

Runa Co-Founder Tyler Gage arrived in Ecuador in 2005 to support a Brown University research project focused on the intersection of indigenous mythology and environmental stewardship. When he arrived in this ecologically rich South American country, his ideas about the indigenous communities immediately changed.

Gage found that the communities he lived with did not lead the secluded and pristine life he had imagined. Instead, these communities depended on the rainforest for their livelihood and struggled hard to cope with the challenges that came with being a part of an industrialized world. “I lived with families who wanted to send their children to school and have access to medical services, but would resort to illegal logging or migrant labor to pay for these relatively expensive services,” Gage recalls.

With decreasing amounts of land and limited access to markets, these small rural farmers typically have no other option than to degrade the surrounding rainforest to make a living. By connecting more deeply with Ecuador’s indigenous communities and their way of life, Gage quickly noted that there was untapped income potential all throughout the rainforest.  The region was ripe with a broad variety of plants that the communities see as their ‘supermarket’ and ‘pharmacy’ – what was lacking was a clear link to international markets.

Fuelled by his passion to provide an alternative to deforestation and armed with a distinct idea – Gage set out to build a model on sustainable natural resource use.

While his idea was rooted in a cause, Gage took a steadfast business approach to designing a solution. By researching local rainforest-derived products he discerned that guayusa (pronounced “gwhy-you-sa”), a native holy species that grows throughout the Ecuadorian Amazon, had a unique mix of antioxidants and caffeine.  Guayusa naturally contains as much caffeine as coffee and double the antioxidants of green tea, with a distinctly smooth, clean taste.

After significant testing (using himself as the first test subject given his high caffeine sensitivity) and market research, Gage learned that there was a solid market for energy products and tea – of which guayusa was both.

As a result, Runa LLC and its Ecuadorian counterpart, Fundación Runa were officially born in 2008 by Gage and Co-Founder Dan MacCombie. They opportunistically leveraged a business plan competition at Brown University to launch their model and generate support. 

The result of the team’s meticulous business planning was a high-impact value chain for guayusa tea between Ecuador and the United States, utilizing a Fair Trade mechanism to unite and mutually reinforce the priorities of income generation and sustainable natural resource management.

To facilitate their supply, Runa partnered with farming families to grow guayusa in organic agroforestry systems. The company then created economic incentives for the appropriate management of natural resources by purchasing the guayusa at a guaranteed minimum price from the farmers.

“From the outset, Runa’s mission has been to create livelihoods for indigenous farmers in the Amazon forests without destroying them,” says Gage.

Like many social entrepreneurs driven by a clear cause, Runa’s market-based approach and commitment to creating a viable business model has resulted in a self-sustaining organization. Runa won USD $70,000 of business plan competition funding in the initial years to pilot and refine the business and then impressively secured US organic food giant, Whole Foods as their first retailer. The company has been on an upwardly mobile path since and now boast a network of 3,000 retailers and an international staff of more than 60 employees.

Keeping in line with Gage’s initial aspirations, Runa’s social mission has proved equally as viable. The company has increased the incomes of their 2,000 network farmers by at least 30% since inception, teaching them the building blocks of sustainable land management along the way.  Furthermore, Runa has helped these farmers plant over 200,000 trees to reforest degraded parts of the Amazon, and convert slash and burn farming plots into perennial forest gardens.

Yet, even with success come challenges.  The company remains comparatively small in comparison to their competitors and while looking for growth opportunities, they have battled for market awareness of their product and their role in forest conservation.  This is why Gage and the Runa team applied for the WWF Switzerland Tropical Forest Challenge.

The WWF Switzerland Tropical Forest Challenge was a global initiative that ran from May – September 2012 to source the best for-profit solutions around the world addressing the conservation of tropical forest biodiversity. The challenge generated 306 nominations, and 74 applications from Latin America, Africa, South East Asia and beyond.  These applications then generated more than 2,300 public votes and were further vetted by a panel of forest biodiversity, development and business experts. A separate panel of distinguished jury members evaluated the top-ranking applications to select the winner and finalists in each category.

Runa was selected as the winner in the company category for their inspiring work promoting sustainable tropical forest conservation in the Ecuadorian Amazon through guayusa tea.

“We are tremendously honoured to receive this award,” Gage said of the WWF Switzerland Tropical Forest Challenge win. “As entrepreneurs we tend to focus on what we are doing, but don’t stop to think about the role we are playing in changing global conditions. We hope our model can inspire other entrepreneurs to take up conservation solutions.”

Runa’s story is a lesson in responsiveness to clear market opportunities and working in service of a larger cause.  Having faced their share of challenges like most entrepreneurs, Runa’s model and structured business approach to addressing a clear environmental issue, like tropical forest degradation, has resulted in a financially sustainable model and, perhaps more importantly, proof that consumer dollars can act as a force for positive social change and forest conservation.

 

Allison Langille is the director of operations for Ennovent.

 

 

Related: Runa Tea's Low-Calorie, High-Impact Model: With revenues reaching $1M Runa is generating income for 2,000 farming families

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