MAY 5, 2011
Source: Wall Street Journal
MUTUM, Brazil—In a remote Amazon village a full day by canoe from the nearest road in western Brazil, Yawanawá Indians in grass skirts gather around a pile of urukum, a spiky fruit they use to make body paint, and pose for two photographers from the U.S. beauty firm Aveda.
The images will help Aveda, a unit of Estée Lauder, sell its popular Uruku line of lipsticks, eye shadows and facial bronzers that use the plant as coloring. The company can charge a premium for products that look good and, at the same time, help save the rain forest by giving the tribe a sustainable livelihood.
But there's something wrong with this picture. For starters, the Yawanawá don't produce much urukum. They delivered none of it to Aveda between 2008 and 2010. Also, urukum itself isn't as exotic as Aveda portrays it in a documentary-style video on its website. Best known as annatto, it's an inexpensive food coloring, grown commercially around the world, that gives products like Kraft Macaroni & Cheese an orange hue.
Aveda's two-decade partnership with the Yawanawá is among the longest running tests of the idea that big firms can profit and also help the planet through business relationships with rain-forest villages, empowering them to protect their land. It is also a cautionary tale about the enormous cultural and logistical obstacles that can prevent such linkups from functioning as advertised.
There is little doubt Aveda has helped the tribe in many important ways, such as improving access to health care, education and government services. But the venture has failed to make the Yawanawá self-sufficient. The market value of its crop in an average year is around $500, not enough to sustain a population of 700. It has no other customers besides Aveda. Today, the project is basically a form of philanthropy, wherein the tribe gets aid in exchange for providing small amounts of annatto and an uplifting storyline.
Complicating matters, Aveda is now working with about half of the tribe after a conflict between two leaders divided the Yawanawá over whether to do business with the company.
In a February interview, Aveda Chief Executive Dominique Conseil acknowledged that the venture hasn't provided the Yawanawá with the kind of sustainable economic model that Aveda envisioned 18 years ago, but he said the project is still evolving. He said the company has helped the tribe revive its language and traditions, and more than doubled its population at a time when many Amazon tribes are losing their languages and migrating to cities. He described the Yawanawá's split as an internal affair in which Aveda wasn't involved.
In the interview, Mr. Conseil also said the tribe was the company's sole supplier of annatto. But in April, Aveda said in an email there was a misunderstanding and that it also buys from other sources, including Chr. Hansen, a Danish firm that makes natural food coloring.
Aveda's involvement with the Yawanawá has outlived other ventures hatched in a golden era of rain-forest-saving deals some two decades ago. Most foundered. A 1991 arrangement to supply Brazil nut oil between the Kayapo Indians and the The Body Shop collapsed after a dispute over payments and marketing. Ben & Jerry's stopped making "Rainforest Crunch" ice cream in 1997 after it surfaced that Brazil nuts in the dessert weren't actually coming from its rain-forest partners, who couldn't meet supply needs.
Today, the concept of preserving the environment by buying ingredients from people living in endangered regions is gaining currency again as consumer demand for items such as "fair trade" coffee and chocolate soars. But unlike Aveda's approach, in which executives board canoes and head into the wilderness, many companies now work with nonprofits that "certify" farming cooperatives around the world. Groups like the Fairtrade Foundation and the Rainforest Alliance vouch that these coops farm with minimum impact on forests and pay workers fairly, among other things.
More than 5,000 companies, including Starbucks, Avon and Kraft Foods, sell products with either a Fairtrade or a Rainforest Alliance logo. The global market for "certified sustainable" agricultural products was worth $56 billion in 2010, up from $42 billion in 2008, according to the Washington, D.C. think tank EcoAgriculture Partners. People who study the industry say these deals can improve the terms of trade for farmers while offering incentives to protect the land. They're less ambitious than Aveda's approach, which means they're also less risky for both company and community.
Efforts to bring an environmentally friendly business model to remote tribes who don't currently sell their goods commercially are admirable, but have a slim chance of success, says Jason Clay, who helped Ben & Jerry's launch Rainforest Crunch in the late 1980s and today is a senior official at the World Wildlife Fund. "The expectations are unrealistic for isolated communities, in many cases barter societies, where skills are very limited, where there's the complexity of language, of culture, of remoteness."
For Aveda, the Yawanawá story is an important part of its estimated $400 million in annual sales. Spokesman Chris Werle said Aveda has used the lessons from the project to form other relationships with indigenous groups around the globe. It buys argan nuts from Berber women in Morocco and sandalwood oil from Australian aborigines. Aveda products, 22 of which use annatto, are mainly sold by beauty professionals while cutting hair or giving facials at hundreds of salons and spas around the world. The professionals are expected to talk about how the Yawanawá and others supply Aveda with ingredients that fulfill Aveda's mission to "care for the world we live in."
"More than a bottle of shampoo, what we sell to our professionals is a certain vision of the world, a set of values we share and a certain way of doing business," says Mr. Conseil, a French-educated executive who studied anthropology before going to business school.
Tribe and company first came together in 1993, 15 years after Aveda was founded in Blaine, Minn., by Horst Rechelbacher. An Austrian hairdresser who helped popularize the term "aromatherapy," Mr. Rechelbacher created a niche by using natural ingredients, like cloves, in shampoo at a time when most products were chemical based.
By the late 1980s, Mr. Rechelbacher says, he'd become convinced he could help save the rain forest by sourcing ingredients from the Amazon. "We were very idealistic back then. It wasn't just about saving the planet; it was about making a profit, too," he says.
Through anthropologists he'd met at the 1992 Earth Summit in Brazil, Mr. Rechelbacher was introduced to Biraci Brasil Yawanawá, then a rising Yawanawá leader who was looking for an economic lifeline for his tribe. The Yawanawá were just emerging from a period of debt slavery under Brazilian rubber tappers who forced them to work in exchange for basics like salt and knives. The tribe, which only came into regular contact with Brazilian society two generations ago, had been decimated by disease, was mired in poverty and was losing its customs.
Mr. Rechelbacher and Biraci Brasil found common cause in annatto, used for centuries by Amazon Indians as a decorative body paint and protection from bugs and sun. In an all-night session under the stars drinking ayahuasca, the Indians' sacred, hallucinogenic tea, they sealed an agreement for the tribe to supply annatto to Aveda. "I got very sick, but then I saw the medicine man was throwing up, too, so I didn't feel so bad," Mr. Rechelbacher recalls.
Back in Minnesota, he started calling Aveda a "tribe" rather than a company. "Some people thought it was cool, others were annoyed," he says.
To manage the project, Aveda hired May Waddington, a Brazilian anthropologist who had helped organize an Indian conference held during the Earth Summit. Aveda also brought two young Yawanawá to the U.S. to study English. One was Biraci Brasil's younger cousin, Tashka Yawanawá, a tribal prodigy who had gone to college to study computer science—and who would return years later to challenge Biraci Brasil's leadership.
The project was set up in a teach-a-man-to-fish mold. The company estimated that with some start-up help, the Yawanawá could become self-sufficient in two years, growing enough annatto to sell to Aveda and other buyers. Aveda advanced $50,000 to the tribe to buy seedlings and equipment. Additional funds went to buy food, clothing and other basic supplies. Aveda helped the tribe build a new village along the Gregorio river, which the Yawanawá elders said was necessary because the old village had become bad luck. They called it Nova Esperança, or New Hope.
There, Aveda built a school and a health clinic. It sent in dentists, and helped the tribe apply for federal programs that send doctors and teachers to remote locations. Aveda funds paid for legal fights, which helped the tribe triple the size of its territory to 280,000 acres of rain forest, land it now protects from logging. Altogether, Aveda transferred about $200,000 in the first five years, before annatto production really ramped up.
Traditional culture started to bloom. Elders taught a new generation ancient songs, dances and games. The Yawanawá language became part of the curriculum in the new school. "We have Aveda in our daily life, in our light, in our transportation and in the recuperation of our culture," said Sales Yawanawá, a 48-year-old tribesman.
But the annatto harvests weren't going well. It took several years before they had a usable harvest, producing as much as four tons on one good year. Other harvests were smaller, stymied by bad weather or damaged by mold on the long trip from the jungle to São Paulo.
By 2001, many in the village were losing interest in weeding and caring for the plants, says Biraci Brasil, the tribal leader. One visitor that year was Flávio Quental Rodrigues, a director at the zoo-botanical park of the Federal University of Acre, the Amazonian state where the Yawanawá live. He found the plants in a state of "crisis," he says, infested by ants and weeds.
"The project probably doesn't have economic viability," Mr. Rodrigues wrote in his 2001 report. "The impression that remained with the technical team is that the multinational has more interest in the marketing aspect of working with an indigenous community in the Amazon than in the production of annatto."
An Aveda spokesman says the goal of the annatto project has always been "sustainability and sharing the benefits. Sharing the Yawanawá story is part of that process."
Despite the setbacks, Aveda expanded its annatto product line in 2003 to include new shades of lipstick. In 2008, new "Uruku" line cardboard packaging had Yawanawá designs and a claim that the tribe harvests annatto "for use in our makeup."
But that year, the tribe didn't harvest anything because a long-time rivalry between Biraci Brasil and his younger cousin Tashka came to a head and split the tribe. (Aveda says it relies on a stockpile of Yawanawá-sourced annatto for use in its Uruku products during off years.)
For years, some in the tribe grumbled about how goods purchased with Aveda funds were distributed, according to tribal leaders. Some men complained that Biraci Brasil, by now chief, was taking too many wives, even for the polygamist Yawanawá. One of his paramours stood out: the anthropologist hired by Aveda, Ms. Waddington. Their relationship inflamed criticism about how entwined Aveda had become in tribal life.
In 2001, Tashka, who was by now fluent in English, returned to Brazil and lobbied to take over the Aveda project. A tribal assembly eventually voted him in to replace Biraci Brasil. "I live between two worlds: The Western world and the traditional world," says Tashka. "We keep our traditions, but cannot deny the world is around us."
Biraci Brasil and Ms. Waddington confirm they had a romantic relationship, but say it was brief and didn't affect the work with Aveda. Ms. Waddington says she left the project in 2001 because her role became untenable after Tashka replaced Biraci Brasil.
Biraci Brasil spent years rebuilding his support in Nova Esperança and an adjacent village—where the original annatto plantation sits—and in 2008 severed ties with Aveda. He says his two villages are now seeking new sources of revenue, such as tourism and furniture making: "For us it was a big loss, but we are conscious that we can, we must, learn to live independently of Aveda, of the government."
Tashka is backed by the rest of the tribe, and is working to restart annatto production in his family's village of Mutum and other villages. Aveda has dug wells there to stop a wave of dysentery, built a school and outfitted it with solar panels. The villagers delivered a small batch of seeds in February, about 64 kilograms, and the first usable harvest since 2007. Still, that is a small fraction of the two tons CEO Mr. Conseil says Aveda hopes to buy this year.
During their recent trip to Mutum, a group of bug-bitten Aveda executives spent time learning the Yawanawá ways. They bathed in the river and painted their faces to take part in ceremonies.
On the final night, the group gathered around a fire to drink the tribe's sacred hallucinogenic tea. "We can't spend all our time farming," says Tashka. "We need time to dance, to sing, to fish."