Beer Marketer's Insights - BEVNET LIVE: CEO Mand Describes Unlikely Path from Guayaki to Yerba Madre

In the annals of branding - not just in bevs but in any consumer category - it was a stunning development. The leader in US yerba mate segment, growing and seemingly impregnable to challengers, abandoned its name of past 3 decades, Guayaki, in favor of new moniker, Yerba Madre. Along way, as Guayaki-branded items started easing out of market, shoppers were confronted with cans carrying more generic name Yerba Mate, often side by side with the Guayaki-branded ones, in same distinctive yellow-hued 16-oz cans (BBI, Mar 25). Months into the cutover, co was ready to disclose pending name change and broad rationale behind it (BBI, May 1). At BevNet Live, Guayaki's CEO of past year, Ben Mand, expounded at greater length about change, and career context that led him to ponder seemingly unthinkable move. Along the way, Ben also shed light on turnaround activities undertaken at his last corporate stop, similarly mission-driven Harmless Harvest brand.As Mand framed it, keeping a strong biz going is straightforward enough, tho not necessarily exhilarating. Earlier in his own career, working on yellow-box Cheerios wasn't necessarily anything he aspired to doing. At other end of spectrum are businesses that aren't doing well. Corporate team is aligned on existence of problem tho needed fixes - or decision to just exit brand - is hard. In the middle is the hardest task, when things seem good on the surface but the underlying fundamentals are starting to decay, signaling danger on the horizon.At Guayaki, where he succeeded former Red Bull North America chief Stefan Kozak, who'd exited a few mos earlier without public explanation, Mand found himself operating a brand that enjoyed better growth than Harmless Harvest did at time he'd arrived, but very poor profitability. Employee morale was low. He described portfolio as "sub-optimized," with not much in way of innovation. Still, it was a great product with high consumer loyalty and great brand purpose.Some of his priorities were out of more conventional turnaround playbook, such as inculcating a lean mindset in org with view to snagging over $150 mil in savings over next 4 years. Co also is doubling down on its purpose-driven activities, this year investing 4X what co did last year, which itself repped a doubling from prior year. It's also working to develop a standard for brands that wish to claim they use shade-grown coconuts.Less apparent but serving as "a bit of a red flag" was a mismatch between Guayaki brand name associated with initial Andes people from whom co sourced its yerba mate to current sourcing situation among indigenous communities across 3 countries. He found it troubling that the brand name "does not reflect everybody." Also concerning was that there seemed to be no settled way of pronouncing Guayaki, all these years in. It varied even among Guayaki people interviewing him for new position. Indeed, many finessed situation just by calling brand "Yerb" or "Yerba." When execs started evaluating potential new names, Yerba Madre jumped out because yerba mate often is considered to be the mother herb and also because it reflected regenerative tilt of co. "Farmers and everyone involved felt it really clicked" and was up to task of carrying the business thru next phase.Tho Mand didn't describe the initial reaction to his radical proposal of the co's founders, who're still involved, or its staff, he did offer some general precepts for getting everyone on board even with uncomfortable decisions. One is transparency, "try to share as much as I possibly can." As at Harmless Harvest, there are weekly all-hands meetings (Gourd Circles in case of Yerba Madre) where people are encouraged to speak their minds. In opening new roles, he's less concerned about experience and developed skills in that area than with whether employee is willing and interested in such a role. One area where this was needed was creating an innovation team to accelerate flow of ideas. When he does have to make a decision to let people go, he does his best to help them land on their feet, keeping them aboard thru minimum number of weeks that should be required for them to land next job. And he strives to drive some early wins to build belief and momentum among entire org, from board to staffers. Mand acknowledged he's got some things to work on himself. "People know I'm not the best listener, I've got to work on that," he said.Mand on the Hard Nut He Had to Crack at Unprofitable Harmless Harvest Operating within Danone, coconut water maker Harmless Harvest typically hasn't shared much with outsiders about its internal operations. In setting stage for his Yerba Madre discussion, Mand offered summation of his activities over nearly 6-year run there. (We'll note that, like Guayaki, Harmless has operated as mission-driven org that's proved very difficult challenge in its segment, refrigerated coconut water.) When he arrived in 2018, co was growing by single digits, was "wildly unprofitable" and had a highly inefficient supply chain that relied on handpacking Taiwan-sourced ingredients in Calif and NJ. Turnover was at 32% and morale was low. That said, as with Guayaki, "the product rocks."At time Harmless Harvest bought 40 mil coconuts a year, extracted the water and threw out the rest. So big efficiency unlock was simply to use more of the coconut, including the flesh, in other items: yogurt, smoothies, coconut water with pulp. The other key move was to radically streamline the supply chain and to extend the shelf life from 165 days to 300 days. Following that transformation, Harmless today is processing 100M+ coconuts, and using 80-90% of the flesh. Margins have doubled, with the co taking pricing, and growth has been at 25%+ compound annual rate. Turnover has dropped to 3% from 30% when he'd arrived.One perhaps counterintuitive move that likely left an imprint on Guayaki board as they evaluated him for CEO role: even tho Harmless was scrambling to get out of the red, he undertook a transition to regenerative ag. Board was entitled to ask: Is this the right time? He recalled his response as: Our mission is not a matter of convenience. Still, it was the right thing to do from a business standpoint too, as it boosted yields and reinforced growers' loyalty.

BEVNET LIVE: CEO Mand Describes Unlikely Path from Guayaki to Yerba Madre

Publishing Info