Drinking Yerba Mate is not unique to Uruguay, many other Latin American countries drink the tea, but Uruguay has put its own unique spin on the practice. Yerba mate is an herb that is made from a type of holly. The herb is placed in a prepared gourd called a mate, hot water is added to it, it stews, and then is drunk through a straw that filters the leaves called a bombilla.
The Guarani Indians introduced yerba mate to the Europeans and it was very popular with the gauchos who drank and traded the tea. While other countries drink mate mostly at home with family and friends, Uruguayans drink it all the time. They carry a thermos of warm water along with their yerba and mate. Mate is definitely a social activity, but not one that is restricted to any sort of time or place. Traditionally, the drinking and sharing of mate was more structured with the Matero preparing the yerba and then each person drinks until the mate is empty, then refills the mate with water and passes it to the next person. Uruguayans have discarded the structure and now drink mate at the beach, on walks, sporting events, work, and group activities. It has become an informal but no less important aspect of the culture. Sharing mate is symbolic of the ties to friends and family.
During the military regime (1973 to 1985) it was dangerous to gather publicly in groups because of the risk of social gatherings being interpreted as being political. So, people would drink mate when they gathered together in order to avoid suspicion. This could possibly serve as the origin of the present infatuation Uruguayans have with mate.