Sustainable Change Management: A Case Study of Guayakí's Strategies

This case study examines Guayakí, an SME beverage company specializing in Yerba Mate, and its sustainable change management strategies. The company employs a market-driven restoration model, focusing on financial performance, social impact, and environmental value generation. Guayakí sources its raw materials from South America, emphasizing reforestation and fair wages for local farmers. The company utilizes various distribution channels, including direct distribution, wholesale partnerships, and direct-to-consumer sales. Guayakí's business model aligns with environmental stewardship, social justice, and economic viability, as demonstrated through its sustainable agricultural practices, premium market positioning, and commitment to the triple bottom line. Despite competition from companies like Eco Teas, Guayakí maintains a unique market position through the quality of its product and rainforest-grown plantations. The company faces challenges in maintaining growth rates and adapting to culture changes, but continues to innovate through ecological packaging and carbon credit sales. Desklib provides access to this case study and other resources to support student learning.

Running head: MANAGING SUSTAINABLE CHANGE
Managing Sustainable Change
Student’s Name
University Name
Author’s Name

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Executive Summary
Guayakí is an SME beverage manufacturing and distributing company. This report discusses
the change management and the sustainability strategies that the organisation have adopted in
its path of specialisation in selling a completely organic and rainforest grown product called
Yerba Mate. The product have a small target market. However, it is innovative and have a lot
of market scope. The herb Yerba Mate is a caffeine containing vegetation that is used by the
company to make a healthy substitute to beverages like tea and coffee. This report
emphasizes on the change management and sustainability strategies that the company have
applied for ensuring value generation towards the three bottom lines.

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Table of Contents
1. Introduction............................................................................................................................3
1.1 Overview of the Organisation and Product......................................................................3
2. Change Management Goals...................................................................................................4
2.1 Brief Production Description............................................................................................4
2.2 Change Management Strategy..........................................................................................4
2.2.1 Guayakí market..........................................................................................................4
2.3 Distribution Channels.......................................................................................................5
Direct Distribution..............................................................................................................5
Direct wholesale and partnership strategy..........................................................................6
D2C.....................................................................................................................................6
2.4 Business Models and Change Management theories.......................................................7
Environmental stewardship.................................................................................................7
Social Justice change Model...............................................................................................7
Economic Viability Theory................................................................................................8
2.5 Market Competition and Sustainable Change..................................................................8
Organisational Structure.....................................................................................................8
3. Leadership Management........................................................................................................9
3.1 Sustainability Metrics.......................................................................................................9
Upstream.............................................................................................................................9
Downstream......................................................................................................................10

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3.2 Innovations.....................................................................................................................11
3.2.1 High technology for Ecological packaging.............................................................11
3.2.2 Selling of Carbon Credits........................................................................................11
3.3 Challenges......................................................................................................................11
3.3.1 Maintain the Growth rate.........................................................................................11
3.3.1 Culture Changes.......................................................................................................12
Conclusion................................................................................................................................12
Reference List..........................................................................................................................13

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1. Introduction
1.1 Overview of the Organisation and Product
The organisation nourishes a motive of sustainable growth by delivering healthy alternative
pr4oducts to the customers by utilising the local resources of South America. Since the raw
material for the product have a limited availability in South America, the organisation have
partial monopoly over the product. Over the last few years the organisation have creditably
sustained in the macro environment of the beverage industry of South America by virtue of
their innovative change model termed as market driven restoration. The customers of yerba
Mate produces value towards the environment each time they purchase packets of the product
by encouraging the company to do effective reforestation in the Atlantic Forests and also
ensuring the empowerment of the local farmers. This is because only the specialised and the
experienced framers of the South can produce the plant for Yerba Mate (Adomßent et al.
2014). The organisation does not merely follow the bottom line approach. Rather the whole
business stratification depends on the three basic parameters, namely financial performance,
social impact and their environmental value generation.
Figure 1: the parameters of the Bottom Line Approach
(Source: Benn, Edwards & Williams, 2014)
financial
performance
social impact
environmental
value generation

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2. Change Management Goals
The Market driven restoration policy of the organisation helps them to ensure sustainability
by reforesting the South Atlantic forests, at the same time providing value to the native
people by allocating avenues for theme to earn living wages and in the end generating value
for the entire society by producing an energy drink producing from organic extracts.
(Godemann et al. 2014).
2.1 Brief Production Description
The company means to sell organic and fair trading Yerba Mate products. Among the
products of this particular extract are traditional Mate, Empower Mint, Spice Chai, Mate
Chocolatté, Pure Endurance and their Pure Heart products. Other important pr5oducts of the
company include loose mate, latte Concentrates, Bombillas and Bottled Ice Mate health
drinks.
However the bestselling products of the company are the 25 units’ typical tea bags and the
eight ounce worth loose mate bags. The Yerba Mate of the Guayakí Company is used in
Steaz’ energy drinks and the drinks of Sambazon Amazon energy. About 45% sales value of
the company is generated from the sale of the bottled products (Godemann et al. 2014). On
the other hand, the dry products hold share of 50% of the sales market out of the total sales of
the company. The organisation maintains an indigenous warehouse at the company
headquarters situated in the Sebastopol area. The company stores most of their dried products
in the warehouse in ideal conditions. They also have external co packing partners who
exports packaged products for the Canadian market. The marketing channels of the company
are also spread throughout North America. The products of the company can be procured at a
large number of natural and organic food stores, along with cafes and all major brands’
supermarkets in North America.

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2.2 Change Management Strategy
2.2.1 Guayakí market
The Company sources it products from South America. However the larger share of the
customer market of the company is spread over North America, or Canada and other nations.
However, international market accounts for hardly 2% of their sales of the products of the
company (Lozano, Ceulemans & Seatter, 2015). The Market mapping and market policy
have been effective part of the sustainability strategy of the company. The started acquisition
of new market in 1996. They completed their market acquisition in 2008 (approximately).
Instead of spreading to new markets they have concentrated on strengthening their sales
channels throughout America. They realised that this is a product that would generate value
for the American society largely. Other customers would not be able to connect with the
product. Hence they concentrated on solidifying their product market in the realm of entire
North America (Lozano, Nummert & Ceulemans, 2016). The company also realised that the
product they produce are premium product. Hence the products would be more popular in the
North American market that is financially advanced. Primarily the products are manufactured
keeping in mind two sets of customers. One who are health conscious and are parallely
addicted to consumption of beverages like tea, coffee and other kinds of energy drinks. The
other group comprises of consumers who are environment and culture consciousness.
2.3 Distribution Channels
Direct Distribution
Almost 80% of the sales value of the products of Guayakí comes from the direct distributors.
The company have contract with major distribution networks for instance United Nation
Food Company which is a deliberate organic food distributing company. The direct
distributors send the products to the thousands of organic and natural food sellers like Whole

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Foods, Safeway, and Vons and so on. On the other hand, the company have access to other
smaller networks which are not wholesale distributors but are capable of directly distributing
the products to the stores in America. The smaller distributors use the Direct Distribution
Model (DSD) that allows them to store products in small units, deliver the stocks according
to the supply dates and also display the products of the company to the small stores and thus
encouraging them to sell the products of the company in their stores. However, the micro
distribution channels are mainly utilised for the promotion of the bottled products of the
company only (Lozano, Nummert & Ceulemans, 2016).
Direct wholesale and partnership strategy
Direct sales to the wholesaler and other partners of the company is another sales medium
utilised by the company. This comprises of about 10% of the business volume of the
company. The Wholesalers of the company are various organic and classic coffee shops, or
café joints or the bookstores. The company had a partnership with the Tully’s Coffee
Corporation in the year 2007 with the motive of introducing a new face of their product
(Martínez-Jurado & Moyano-Fuentes, 2014). The Tully’s introduced Brewed Yerba Mate tea
along with latte or mocha and even shake and smoothies. This was a tertiary sales campaign
that was aimed at making it evident that commercially popular products can also be
manufactured of the yerba mate products. The company also entered into a collaboration with
the Steaz Organic energy corporation and the Sambazon Company who used the yerba mate
as one of the main raw materials for their products.
D2C
In the end the company manages to gather 10% of their business return form direct sale to the
customers. Out of the direct orders form the customers about 70% comes from the
ecommerce websites and about 10% orders are given over phone. Moreover the company

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their own website which is a portal available for landing direct orders. Other than all these the
company also opened a Mate Bar situated in the building where the headquarters of the
company is located in Sebastopol. In fact the popularity of the product among the customers
made them give the suggestion of opening a mate bar. The organisation aimed at
exaggerating the retail business if it flourished. However with time the company realised that
it is better for them to regulate the distribution network only.
2.4 Business Models and Change Management theories
The business model and tactics of the company enables to form a connection between the
potential market forces of the Northern America with the indigenous communities of the
South America who render value with reforestation and carrying out sustainable agriculture
in the countries like Brazil, Argentina or Paraguay.
Environmental stewardship
The experts of the R&D team of the company, teaches the South American farmers,
sustainable agricultural practices. Again by doing this the company is making a contribution
towards reforestation in the Southern Atlantic Forests. There are multitudinous benefits of
this sustainability project (Pedersen, Gwozdz & Hvass, 2018). This along with sequestration
of carbon output, also helps in the conversion of carbon dioxide into oxygen. Other than that
the forests contribute to innumerable natural benefits and also contributes towards the
restoration of the ecosystem which include impact like cleaning of the air, water or soil,
sourcing medicinal products or building materials.
Social Justice change Model
The company has created a premium market for the organic products in North America.
Again, they pay the cultivators of the product above market payment margin as a part of their
campaign of encouraging the farmers for developing the produce and maintaining a healthy

10MANAGING SUSTAINABLE CHANGE
lifestyle. Unlike the other companies this company do not act as a broker to products only
(Ramos et al. 2015). The CSR team of the company works in unison with the local
community members in order to respond and address their intimidate needs and lacking. This
intimate relationship with the farmers encourages them to work passionately towards
developing the quality of the product and thereby supply the top quality yerba mate to the
Guayakí Company.
Economic Viability Theory
The organisation is a living manifestation of the fact that a company can make profit as well
as adhere by the triple bottom line business approach. The company internalises
additional costs incurred by fair trade and the organic certification within the business model
and creates a chance for the customers who gives value to these particular ideals to
incorporate them in order to make a statement along with the purchasing power of the
companies. The company produces premium products mostly. Therefore a premium pricing
strategy is also needed. The company have been able to draw customers who are concerned
about the wellbeing of their health automatically. Therefore the customers who buy the
products of their own need are not even aware of the three pillar model (bottom line
approach) of the company. Thereby, the customer paying a premium price also become
contributors to the sustainable change that the company introduces in the context of society
and environment (Stark, 2015).
2.5 Market Competition and Sustainable Change
The biggest competitor of the company is Eco Teas who also professionalises in the same
product Yerba Mate. 30% of the market for Yerba Mate is occupied by the Eco Teas
Company (Stoops, Williamson & Braa, 2018). They are also producers of organic product.
However, their product differs in taste. The heightened taste of the products of the Guayakí is

11MANAGING SUSTAINABLE CHANGE
due to the effort given by the farmers to produce the best quality product and the rainforest
grown plantations that yield the mate that the company sells (Guayakí, 2018).
Organisational Structure
The company started their business initially with eight shareholders. The financing in the
early stages of the business was done through small Business Administration credits from a
local bank in San Luis that charged low interest. After many efforts the company was able to
gain financial help from the external stakeholders. These stakeholders also contributed to the
sustainability as they all were like minded and interested in contributing to some business
model that generated value to the society and the environment at large. The CEO of the
company is Chris Mann, who is among the eight original members. The operations, VP of the
company is Richard Bruehl. 34 employees are employed in the management of the company
and are divided into six departments, as follows
Figure 2: Guayakí executive team chart
(Source: Guayakí, 2018)
Pierre
VP, Sales and
Marketing
David
VP Business
Development
Patrick
Global
Cebador
Steven
Creative
Director
Riochard
VP operations
Alex
Vp Latin
America

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3. Leadership Management
3.1 Sustainability Metrics
Upstream
From the perspective of Upstream Operations, the company tracks sustainability of the
products of the company form the perspective of the society, environment, and lastly quality.
From a social context, the company is helping the household in the South America to realise
decent livelihoods. Again, in terms of the environment, the company s helping in
reforestation of the Atlantic Forest along with maintaining the richness of the biodiversity of
the rainforests (Thomson, 2015). The company does not only follow the food quality
regulations of the North and South America. However, going beyond that the company
maintains extremely high quality of the products. Quality control team of the company and
the product testing team of the company in the US compares the quality of the products
against a set of listed parameters. The organisation have set an internal parameter that
compares the product quality to ensure that the customers buy premium products. The
guidelines have set parameter for all the equipment coming from their supply chain starting
from the water sources and the soil whir the plantations grow to the finished product and the
quality of the packaging items. In this regard one of the visions of the company might be
highlighted. The most important goal of the product line of the company is winning the
acclaim of producing the greatest quality mate in the whole world (Guayakí, 2018).
Downstream
For the sake of the end customers the company tracks the health as well as the environmental
impacts. In fact, each leaf of the yerba mate contains about 25 essential vitamins and
minerals, 20 amino acids along with plenty of antioxidants and lastly natural caffeine. Hence
the major share of the consumer market consider the product as a healthy stimulants that have