Mate

& Co.

Argentinian Tea Company

Global Expansion

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Gabrielle Li, Bailey Robertstad,

Gatlin Cyrus, Nate McNill

Mate & Co.

• Started in 2015 by three friends. (Privately Owned)
• Create different blends with organic yerba mate, herb (Ilex Paraguariensis) by adding ingredients for flavors to enrich the tea.
• Blends are 100% natural and contain herbs, spices, and fruits.
• Goal is to bring mate tea into the gourmet food movement.

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Mate & Co SWOT Analysis

Strengths

• Success in Argentina
• Social Practice
• Contains bioactives (Vitamins & Minerals)
• Specialty Tea

Opportunities

• Growth
• New blends
• Products that compliment teas

Weaknesses

• Product flaws
• New blends take a long time to develop.
• Preparation of herb (18 Months)
• Slow growth rate of herb

Threats

• Guayaki (Competitor)
• Loose Leaf vs Competition
• Acceptance of the product

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Mate & Co. Competitive Advantage - VRIO

Valuable - Our mate’s health benefits and the delicious high-quality taste, provides value to customers

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Rare - Mate plants are only grown in Argentina, Paraguay, Uruguay, and Brazil. Global demand will increase scarcity.

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Inimitable - Our tea blends are made from special recipes which makes our tea hard to copy

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Organized - We plan to capitalize on unused competitive advantage through organizing strategies and processes for global expansion

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Global Expansion Map

From our headquarters in Palermo, Argentina, we will expand to The Netherlands, Canada, and Japan

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our office

Defining Value Chain

Japan

• Opening a store and selling packaged products that will be distributed from Argentina.

Canada

• Selling raw unpackaged tea which will then be repackaged and redistributed by them.

Netherlands

• Partnership with company who will sell packaged products in their store.

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Porter’s Five Forces Framework

Yachak�(Pepsi Co. partner)�

Las Maria’s� (World Largest Mate Producer, Brazil)�

Guayaki �(Sustainability model)

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Threat of Substitute Products:�

Coffee, Tea, Juice, and other more accessible and familiar beverages

Power of Suppliers:�- Yerba mate is only grown in Brazil, Paraguay, Uruguay, Argentina

- Unique product must be imported

Threat of New Entrants:

- Introducing new preference & brand loyalty to existing drinks��- Capital investment for foreign entry / partnership / export

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Power of Buyers:

- Growing demand for specific mate product�

- Willingness to pay can affect pricing for product

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OLI Framework

Ownership Advantage - Handmade products, privately owned. Name recognition

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Location Advantage - Only grows in South America (Geographical features). Strong South American roots (Culture)

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Internalization - Vertical Integration to other countries. Currently mainly domestic within South America, exporting to Miami & New York City.

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Entry Nations: PESTLEEG Factors

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P.E.S.T.L.E.E.G. - a few important factors

The Netherlands

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-Political: trusted government that supports global trade

-Economic: 16th largest economy, economically free

-Geographical: largest port in world (Rotterdam)

Canada

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-Political: good relations with Argentina, supports trade

-Economic: 9th largest importer in world, high GDP (consumer wealth)

-Legal: easy to follow import/export regulations

Japan

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-Political: stable government structure, good political relationships

-Economic: high GDP (consumer wealth)

-Geographical: Dense urban centers will be beneficial for FDI

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Hofstede’s Socio-Cultural Factors

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Netherlands Entrance: Alliance

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• Why Netherlands?
• High consumption of tea. 98% of surveyed said at least one cup a day!
• Sales revenue of tea has grown every year
• Projected sales of organic tea will continue to grow�
• National Factors
• Indulgence score of 68. Consumption culture and value for leisure
• Very open to global trade, not corrupt, protection of businesses�
• Opportunity to work with existing & trusted companies with unique product, largest port in Europe

Alliance Strategy in Netherlands

• 34 shops (3rd largest) in NL, able to supply
• Reduce cost and risk as a strategic supplier
• Build on brand equity and consumer base of Coffeecompany
• Operations: Strategic alliance as a supplier to sell official Mate & Co. drinks in Coffeecompany shops
• Financing: Investment from both Coffeecompany and Mate & Co.
• Marketing: B2C, Social Media
• Challenges: Familiar substitutes, cost in supply chain to reach Netherlands

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Canada Entrance: Export

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• Why Canada?
• Canada shares a sovereign with Britain and retains cultural traditions such as tea drinking
• The amount of tea that Canadians drink has doubled in the past few decades
• The Tea Association of Canada reports: in 2015, Canadians drank 85 litres per person, per year
• Millennials are changing preferences of the Canadian market to specialty and flavored teas - our mate tea fits in the specialty spectrum

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• National Factors
• Good political relationship with Argentina
• Canada is the world’s 9th largest importer - $443.7 billion of imports in 2018

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• Opportunity to sell to a receptive Canadian market through supplying unique mate blend to our distributor

Exporting Strategy in Canada

• Exporting is a way for us as a small firm to go global with minimal investment risk
• Capitalize on high buying demand in Canada
• Plan to reach contract agreement with Canadian distributor Steeped Tea, a growing direct selling company in Canada
• Operations: Export raw goods as a supplier to distributing company
• Financing: Exporters have more access to domestic bank credit; seek foreign financing
• Marketing: B2B, Social Media
• Challenges: Familiar substitutes, reliability of personal sellers in Canada

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Japan Entrance: FDI

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• Why Japan?
• Deep history of tea consumption, 9th largest global per capita consumer
• Highest per capita consumers of tea in Asia
• Most commonly consumed beverage in Japan and important part of food culture

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• National Factors
• High level of Foreign Direct Investment into Japan, market is friendly to it
• Indulgence of 42, but tea is established expense for many.�
• Opportunity to enter new market and be on the forefront of the introduction of Yerba Mate to Asian consumers.

FDI Acquisition Strategy in Japan

• Locate profitable, established, and popular tea room/retailer in Tokyo
• Acquire ownership of business and use it to introduce Yerba Mate to Japanese market
• Operations: Supply Yerba Mate, maintain Japanese employees and management
• Financing: Seek business acquisition loan to help cover expenses
• Marketing: B2C, Existing marketing of foreign business, emphasis on Mate
• Challenges: High costs, competition, new market

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QUESTIONS?

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