Credence attributes and opportunities: a cautionary tale of yerba mate in Paraguay

Abstract

PurposeThis study explores the determinants of growth of credence-based exports of yerba mate from Paraguay, potential for increased export growth, and the fragility of the credence-based export model. Much of the growth in value of yerba mate exports from Paraguay is due to positioning of the good within the universe of products where consumption is driven by perceptions of sustainable production and health benefits to consumers. Credence claims for yerba mate—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.Design/methodology/approachPrimary information was collected through interviews of actors in the Paraguayan yerba mate value chain during spring/summer 2020. These included representatives from three exporting companies, processors, public institutions and indigenous producers.FindingsThe Paraguayan yerba mate export boom was stimulated through the careful cultivation of an image of healthful consumption and sustainable production processes. The cost of this cultivation was borne mainly by a single firm. Findings suggest that future marketing efforts will need to reinforce credence claims, highlighting the benefits to indigenous producers.Research limitations/implicationsThis 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.Originality/valueFindings are supported by field interviews with value chain participants and detailed analysis of extant data. The paper is the first to discuss the fragility of relying on credence attributes for long-term demand growth.