Credence Attributes and Opportunities: Yerba Mate in Paraguay

Abstract

The value of yerba mate (Ilex paraguariensis) exports from Paraguay has recently increased dramatically. Much of this growth is due to positioning of the good within the universe of products where consumption growth is driven by perceptions of sustainable production and health benefits to consumers--that is, credence attributes creating a new dimension of demand. Credence claims for yerba mate's benefits to indigenous producing communities, environmental sustainability under certain production processes, healthful alternatives to energy drinks, are now widely known, but the growth of this awareness came via a new entrepreneurial strategy of a single firm. This case study explores the determinants of growth of credence-based exports of yerba mate from Paraguay, potential for increased growth, and the fragility of the credence-based model.