When Guayaki launched in 1996, it sought to educate mainstream consumers about the clean and natural benefits of plant-based energy with its line of yerba mate drinks. Now, 25 years later, they may be catching on.
In recent months, the yerba mate category has seen an influx of attention and innovation from startups and strategics alike, including new product launches from Honest Tea, Steaz, Perrier, publicly traded energy drink GURU, and alcoholic tea seltzer brand Kové — and that’s only since March. The rush of new products arrives amidst double-digit growth for yerba mate beverages and rising consumer interest in energy drinks, plant-based products and better-for-you beverages.
According to SPINS, ready-to-drink yerba mate drinks grew 20.8% to $93.2 million in the 52-week period ending May 16, up from $77.1 million last year. Broken down by channel, the bulk of the growth has come from expansion into MULO (excluding convenience) where the category is up 28.1% to $62.8 million, while sales in natural were up 7.9% to $30.3 million.
Comparatively, yerba mate is still a drop in the bucket compared to the broader $15.2 billion U.S. energy drink category, up 14.4% for the 52-week period ending June 5, per Nielsen. However, natural energy drinks have begun making headways to become a more sizable share of the category; according to a 2020 report from ingredient supplier Doehler, around 15% of new energy drinks launched globally in 2019 claimed to be “natural,” a 17% year-over-year increase. More recently, plant-based energy has received mainstream attention as Molson Coors Beverage Company partnered with actor Dwayne Johnson to launch ZOA nationwide this winter.
Yerba mate is also increasingly becoming a way for natural channel brands to expand their reach into convenience and conventional, such as the relaunch of Brew Dr’s Uplift line which has given the kombucha-maker a new conversation starter with buyers as it grows its distribution footprint.
Answering questions via email, Guayaki co-founder David Karr told BevNET that there has been a “large uptick” in consumer awareness of yerba mate over the past five years, particularly beyond the brand’s West Coast homebase where the category has historically been the strongest.
“It’s been amazing to watch the conventional channels and mainstream consumers pick up on emerging natural brands … that are healthier and responsibly produced,” Karr said. “The next generation of consumers are looking to vote with their dollar by supporting brands that are changing the way business is done for the environment and social impact.”
While there is no shortage of sources for clean energy on the market, Euromonitor senior consultant of beverages Matthew Barry, however, believes yerba mate’s recent growth might not necessarily be the result of a sudden thirst for the South American plant among U.S. shoppers, but rather the beneficiary of the broader plant-based and better-for-you trends.
“Anecdotally, I think it is a small part of the overall trend,” Barry said. “What makes yerba mate better than guarana or guayusa or green coffee extract or anything else? I think what it has is the story of its original consumption, which is the South American [history] and all that, but I don’t know how much that story really resonates among American consumers.”
Clean Energy
Within yerba mate, category pioneer Guayaki remains the dominant player. According to IRI, which also tracks convenience, the company grew sales of its canned and bottled teas 28.2% to $66 million in the 52-week period ending March 21, while its canned yerba mate drinks were up 26.6% to $37.4 million. Among canned and bottled tea drinks, the next largest yerba mate producer was Yachak, which saw sales decline 10.4% to $20.5 million in the period.
As yerba mate has benefitted from a surge in energy drink sales, brands are now bringing in experts from the category to lead their next stages of growth. Within the past year both Guayaki and CLEAN Cause tapped former Red Bull executives to lead their companies. In April, Guayaki hired former Red Bull North America CEO Stefan Kozak as its CEO and in October 2020, CLEAN Cause named Chad Peffer, a 21-year Red Bull veteran who last served as EVP of sales and distribution, as its president and chief commercial officer.
“Functional drinks have been around for 25 plus years and, as energy drinks did 22 years ago, you see other up and coming categories like yerba mate, like kombucha, pull from other categories and create subcategories,” Peffer told BevNET. “So it’s nothing necessarily new. But I do think the better-for-you trend is just escalating.”
Todd Bondy, CFO for CLEAN Cause, added that although yerba mate could ultimately live as a subcategory of energy, it’s too soon to tell whether it will be part of the broader umbrella of caffeinated beverages or if it could eventually evolve into a standalone category.
“I think with the broader trend of clean energy, over time, you may see a blurring of the lines,” Bondy said. “Right now consumer awareness of yerba mate is growing, but it’s still incredibly low relative to what it could be. And it’ll be interesting to see, over time, just how clean energy as a category becomes more what people are focused on. And I think having a natural source of caffeine is really the defining trait along with a clean label.”
Functional Opportunities
In 2019, Brew Dr Kombucha launched Uplift, a caffeinated kombucha product brewed from yerba mate and guayusa. The product rolled out during a period when the brand was seeking to expand in convenience stores, but by March, it had spun out Uplift out into an organic yerba mate energy drink line with added probiotics. The new Uplift features Blood Orange Lemon, Blueberry Raspberry and Mango Passionfruit flavors; each 16 oz. can contains 150 mg of natural caffeine and retails for $2.99.
Matt Thomas, founder and CEO of Brew Dr, said he anticipates yerba mate continuing to grow double digits year-over-year, but he acknowledged that it is still largely confined to the West Coast and compared the category’s trajectory to the growth and eventual mainstreaming of kombucha.
“It’s kind of like kombucha about 10 years ago,” Thomas said. “It’s very much the West side of the country that is drinking yerba mate a lot more than the rest of the country, which was the same for kombucha early in its life. I think it’ll just take longer for certain chains to pick it up, for certain parts of the country to become aware of it, but I almost expect it to follow a kind of similar trajectory that kombucha has. And kombucha still has plenty of room to go.”
For Brew Dr, Uplift gives the company an important shelf stable entry in its portfolio and, similar to Steaz, Thomas sees it as an opportunity to expand the brand into new channels and parts of the store it has been unable to penetrate in the past. While kombucha has been carving out space in the convenience channel for several years, he said a yerba mate gives Brew Dr “another reason” to be in the space.
While Barry believes the sudden spike in interest in yerba mate may be fleeting, he suggested the entrance of The Coca-Cola Company into the space via Honest could be one possible catalyst for bringing that wave to shore.
Announced in April, Honest Yerba Mate is an organic, Fair Trade certified line available in Peach Mango Green Tea, Strawberry Pomegranate Match and Lemon Ginger Black Tea flavors. Each 16 oz. can contains 13 grams of sugar and 60 calories. Although Barry noted that the line is positioned closer to a tea than an energy drink, the extension gives the Honest brand a caffeinated offering that can broaden its use occasions and expand its shelf space. The launch of Honest Yerba Mate will also move the category deeper into the conventional channel, potentially breaking down barriers that smaller brands can follow through.
“If it’s going onto the Coke trucks, then in my mind that takes yerba mate to new places,” Barry said.