Ecuador is home to what’s considered to be the most biologically diverse forest on the planet. In stark contrast, Ecuador’s GDP relies heavily on petroleum mining and extraction, and deforestation abounds in the region. Over 3% of the Ecuadorian Amazon is deforested each year, and the oil industry has left a long legacy of exploitation and destruction in the area.
So how did three young Brown University graduates — really young — class of 2008 — get involved with building a new sustainable business in Ecuador that’s heavily focused on fair trade and reforestation?
Ask Tyler Gage, president of Runa Amazon Guayusa.
“I’ve been working in the Amazon on and off for the last 5 years.” Gage tells me via Skype from Ecuador as he explains his seemingly roundabout path to becoming an entrepreneur. “I started doing ethnolinguistic research and then I started working in the indigenous communities and doing community development projects.”
“I would spend all night with these communities and the shamans would tell amazing stories, and then at sunrise you would hear a chainsaw cutting down hardwood trees so they could get money to feed their family and send their kids to school,” recalls Gage, who was a creative writing major with no intention of going into business.
But that buzzing in his ear sparked something: “I became very passionate about fair trade and how we can use business as a tool to support sustainable development.” Gage started working with fair trade cacao, but found it unfulfilling based on cacao’s roots in African slave trade.
Sustainable development at sunrise
Then, a few years ago, one of the indigenous Rainforest communities –- the Kichwa — invited Gage to participate in its daily ritual of drinking guayusa (pronounced why-YOU-suh) — a caffeinated beverage made from the leaves of an Amazonian holly tree. Guayusa grows almost exclusively in the upper Amazon region of Ecuador – where the Andes Mountains meet the Amazon Rainforest. Every morning at dawn, native Kichwa communities come together to drink guayusa from gourds dipped into a large clay pot brewing over a fire – and to share stories, dreams, and songs. It’s what the Kichwa call being runa.
Gage became steeped not just in the feeling of wellness brought on by the guayusa, but in the rich Kichwa culture. “I was like ‘Man, it has this great flavor and energy but no one’s ever built a market mechanism to bring it out commercially,’” Gage recalls. So he went back to Brown and wrote a business plan with his two best friends — Charlie Harding and Dan MacCombie, and the idea for Runa Amazon Guayusa was born.
To catch a glimpse of the guayusa ritual take a look at this video:
How to be runa and run a business
“Runa in Kichwa means ‘fully living human being’ and so for us to be able to carry the Kichwa people’s cultural identity and heritage in the product is one of the greatest impacts,” Gage explains. “There’s something really unique about working with the Kichwa groups. They say to be runa is to know the Rainforest, is to know the songs and stories of their ancestors, and to be runa is to know other cultures,” he continues. “These communities have dealt with a long history of exploitation and not so nice foreigners having their own visions of indigenous development. So that’s a big impact for us to use a consumer product as a way of teaching about cultural exchange and about the Kichwa’s cultural heritage, and really proving to them that their legacy and cultural heritage has a place and has value in the modern world.”
Today Runa works with about 800 farmers in 90 indigenous communities in Ecuador, harvesting leaves from guayusa trees, which grow in the shade under the Rainforest’s canopy. Just four months ago Runa inaugurated “the world’s first guayusa factory” as Gage likes to call it, in the small jungle town of Archidona. Another, much larger factory is in the offing, designed to run off of 100% renewable energy. “We’re designing it to be 100% biogas and then being able to sell that energy back to the grid,” says Gage. “We’re working with local governments to set up that system.” The new factory will be able to process 25,000 pounds of dried tea a month – about 12 times what Runa is currently processing. “One of the biggest bottlenecks of the business is that we have hundreds of farmers who want to sell guayusa to us but we have very limited processing capacity,” Gage explains.
“What’s interesting about guayusa is that all of these families have anywhere from about three to 15 of these guayusa plants growing in their forest gardens. The way they traditionally do agriculture to you or me looks like the forest but it’s actually a cultivation strategy for diverse plants. They have their starchy roots, their bananas, their plantains, their medicinal plants, the whole deal,” Gage says. “They often joke ‘What the heck am I going to do with these guayusa trees that are 15 meters tall that my grandfather planted 30 years ago?’ What’s nice about our system is that there is actually already a large existing supply. We go to the individual family farms, they harvest from their individual trees, and we buy it directly from the farms.” Runa pays fair trade prices to hundreds of indigenous farm families, and that alone has succeeded in raising their income by over 25% a month, Gage claims. When I ask how he was initially welcomed into the communities, Gage refers back to the Kichwa’s interest in other cultures, and how that translates into an interest in business.
“As much as they are indigenous, they live in the Rainforest, they have their traditions, they’re very keen to know what markets are about and how to do business. Whenever we go into communities, we talk about how to grow cuttings, about the nurseries, organic certification, fair trade, and they’re like ‘That’s great, but what’s your market like? How are you selling this stuff, and who are you selling it to?’ And they’re very keen on what it take to create a good business and what you need to be successful.”
Using guayusa for reforestation
Gage is the only American in Runa’s team of 25 on the ground in Ecuador. His co-founders are stateside: MacCombie is based at company headquarters in Providence, RI and Harding is in San Francisco. Local agronomists, the majority of whom are indigenous (in fact the director in one of the provinces in which Runa works is the president of the indigenous federation), go out and train the farm families in how to implement agroforestry systems. Just last month Runa received USDA organic certification for several hundred of its farmers.
And that’s where Gage’s reforestation piece comes in. Runa has reforested about a quarter of a million trees in the Amazon since 2009. “We’re reforesting deforested lands with guayusa,” Gage tells me. “The cool characteristic of the plant is that it needs shade to grown – so we grow it in what we call agroforestry systems where we plant food crops, guayusa, fruit trees, and hardwood trees on lands which have been farmed with corn or cows, as a way of recuperating the land and turning it back into a mixed use forest and agricultural system.” In fact. USAID recently granted Runa $250,000 to reforest 1,200 acres over the next 18 months with about 1,000 farm families.
Runa runs both its for profit business and a foundation arm. “Everything that’s related to buying processing, selling, marketing and exporting tea is run by our for profit business. The base of that comes from our farm associations, recognizing that in that process is really what generates the social benefit.”
Fair trade certification leads to a social premium fund for farmers
Gage expects full fair trade certification by late fall. “As a fair trade organization we pay an additional 15% of everything we buy from the farmers to a social premium fund. And that fund is managed and executed by the farmers themselves to implement other projects.”
Runa’s two foundations: Runa Foundation USA, and Fundacion Runa are set up to deal with that aspect of the business. “What the foundations are designed to do are to try and bring more value and more resources to those funds so that if the farmers say ‘Hey, we want to do an education program about health with our kids,’ they then have the resources to be able to design the program,” says Gage.
Runa already sells the communities affordable solar panels and water filters, and soon enough medical supplies, education materials and even reading glasses, and farmers can trade a portion of their guayusa harvest for these tools. “Most of what we’re doing now is setting up these structures to then be able to grown the social premium funds infinitely over the next 5 to 10 years,”
But the thing Gage and the Runa team never lose sight of is the company’s dedication to the cultural heritage of the communities it has partnered with. “From the Ecaudorian side and Runa as a development initiative, we are getting a lot of great support from the Ecuadorian government and agencies here, and a lot of what they’re interested in is that it is an emblematic Ecuadorian product that is pretty much only grown in the Ecuadorian Amazon,” says Gage. In fact, Runa was just named as a finalist for a $1.25 million grant from the Ministry of Production, and has high hopes it will win.
It takes three years for guayusa trees to produce income after they’re planted compared to 15 plus years for hardwood trees in the Amazon according to Gage. Runa’s goal is to plant over four million trees and bring its agroforestry model to over 6,000 farming families within five years, generating over $8 million a year in sustainable income for indigenous families.
“One of the big values for me is really seeing how Ecuador as a country is looking for new solutions, alternatives like guayusa, like other fair trade products, in a country whose GDP is very heavily based on oil extraction,” Gage says. “Obviously nothing’s going to compete on the scale of oil, but just showing there’s resources, there’s value, there’s interest in the cultural heritage and biodiversity, that’s a lot of the fun for us. And it’s cool to be part of the national dialogue around that.”
photo credit: Caroline Bennett