The MCN’s Rachel Andersen caught up with Tyler on October 21, 2014 to hear about Runa’s growth since being a part of the 2011 cohort.
“We built a supply chain entirely from scratch in the middle of the Amazon so we had to go through all the heavy lifting of immense amounts of R&D, bureaucracy, and export/ import processing procedures to get this product to market. “
2014 Interview
About Runa:
Runa is a Brooklyn-based social enterprise that makes beverages brewed with the guayusa (pronounced “gwhy-you-sa”) “super leaf” and improves the livelihoods of Amazonian farming families through its supply chain. When brewed, guayusa has as much caffeine as a cup of coffee, double the antioxidants of leading green tea products, and a smooth, clean taste. Co-founders Tyler Gage and Dan MacCombie entered the Sustainable Business Plan Competition in 2011 and finished in second place. They left with cash awards, pro bono professional service prizes, and new relationships with their mentors.
Runa by the numbers:
- Runa has 25 employees in the US and almost 40 in Ecuador.
- You can find Runa products in 7,000 stores nationwide in the US.
- Runa has helped farmers plant about a million trees to date.
- Runa supports over 3,000 farming families.
- Runa has purchased almost one million pounds of fresh guayusa leaves from their network of farmers.
- Since producing for Runa, farmers have had an average increase of 25% of annual income.
- Runa’s sales growth rate is on track to almost triple sales in 2014 over sales in 2013.
What problem are you trying to solve?
The problem we are trying to solve is the lack of value of the tropical rainforest and native culture in today’s world. What we are trying to do is improve, in real economic terms, the value of the rainforest, of its resources, and the native traditions related to it. Basically, we are trying to find a role for these products and the rainforest in today’s world.
What is your solution to this problem?
Our solution is to use business as a way to bring native Amazonian products that are sustainably produced in the rainforest to the market. We use markets to gain consumer appreciation, consumer demand, and consumer dollars, driving the sustainable production of these goods, and thereby creating economic incentive to promote rainforest conservation and cultural preservation.
What significant challenges have you faced and how have you tackled them?
We built a supply chain entirely from scratch in the middle of the Amazon so we had to go through all the heavy lifting of immense amounts of R&D, bureaucracy, and export/ import processing procedures to get this product to market. As an entirely new product, it has provided a tremendous amount of room for innovation and also meant that we needed to fill in gaps. We’ve had to not only look at building an entirely new supply chain, but look at it through the Runa lens which is the value chain. We need to make sure that we are creating value and social impact for all the stakeholders involved and just the diversity of factors we have to constantly consider and evaluate is a big challenge.
Do you foresee any supply or production problems considering guayusa grows in a limited geographic area?
Not so much. It’s one of the nice things about Runa’s business model is that the sales really do create the social impact. The way that we grow the business and the way we get more guyausa is we plant more trees and work with more farmers. To date, we have helped farmers plant about a million trees and we are expanding into new provinces of Ecuador, to new farming communities, to new indigenous groups and taking a very proactive approach to building the supply.
What are some recent successes or milestones you have accomplished that you would like to share with us?
We are on track to purchase almost one million pounds of fresh guayusa leaves from the farmers. To think that 5 years ago there was zero pounds of guayusa being produced and bought, and then to go to about a million pounds is something that we are really proud of.
For brand milestones, we launched in Safeway a couple months ago and that’s a great milestone for us. Our products are not only are doing well in the Whole Foods and Dean and Deluca’s of the world but we are reaching more of a mainstream feel of the brand and the product. It’s really exciting because it shows a lot of growth to date, but even more importantly, it shows scalability and the potential of what we could do with the product.
How does Runa measure social impact?
Our primary metric is around the income created for farmers. We measure total dollars generated for families and the percentage of income that has been increased as a result of Runa’s business. We really believe that if you can drive sustainable income in the farmers’ pockets, that’s the most transparent, efficient, and sustainable way to create real impact. For us, it’s really about helping the farmers create a living for their families, and for their communities, so that they can earn the resources that they need to then invest in their own development.
Our goal is to have the income [of farmers who we buy from and their families] increase from 50 to 100%, as the guayusa trees that farmers have planted become productive. We are well on track to reach that goal and the current percentage is around 25% increase in income.
How is the line of Clean Energy drinks doing compared to the Runa tea beverages and bottles?
While the bottles are the majority of our business, the Clean Energy drinks are definitely gaining market share and starting to perform well but they are much newer. We have had them in the market for a little bit more than a year and we are seeing a lot of interest from consumers who want a clean energy drink that doesn’t have all the artificial ingredients [that are found in a lot] of the main stream players.
Can you tell me about RunaTribe and the role it plays in the overall business?
RunaTribe is one of the most fun parts of our marketing and our brand development. It’s our crew of athletes, artists, and innovators who live the clean energy lifestyle, and who embody the spirit of what it means to live fully alive through their heart, their work, and their sport. They range from people like a dogsled musher up in Alaska to rock climbers, skateboarders, and graffiti artists. We also have some big name nature enthusiasts like Channing Tatum and Kanye’s producer who love the product and are very active as RunaTribe members in that they help us share about the brand and our mission.
Have you remained connected with any of the mentors whom you met through the WJF/ MCN Sustainable Business Plan Competition?
We’ve stayed in touch with a lot of people. Our general strategy is that we have always honored the community based traditions of guayusa in the Amazon. It is a central part of how the communities come together between tribes and generations to share stories and dreams, and connect on many levels about what it means to be human. We have always taken that very seriously; it’s a very important part of what Runa means so we are constantly doing everything we can to share stories. For us, it’s about working with other entrepreneurs and other innovators to learn at every stage. We were college kids that started the company and we didn’t know a whole lot. That mindset of not knowing leads us into more and more spaces of collaboration and collective learning.
What is next for Runa?
More growth! We are trying to share guayusa with more and more people and to do more work to support the farmers. We are in a great place because we’ve got a great product and a great story. We just keep working hard, and staying caffeinated on guayusa as we get the product out there more.