Blog : 17 Years Later, the Honest Journey Continues

By Sarah Mahoney | Apr 30, 2015 | in

By Seth Goldman, Co-founder & TeaEO of Honest Tea

Coca-Cola Bottling Company of Northern New England is a green certified Green Alliance Business Partner and the distributor of Honest Tea in the region.

Seventeen years ago I turned on the Packard-Bell computer in a bedroom of my house and started Honest Tea. On that first day, there was an infinite number of “Unknowns” but there were a few “Knowns”:

  • My co-founder Barry and I were on the same page – he was going to be my business partner, advisor and Chairman of the Board while keeping his day job as an Economics professor at the Yale School of Management.
  • We had an aspiration to create a mission-driven brand and enterprise that could have a positive impact on health, the environment and our supplier communities.
  • We had $50,000 in the bank, not coincidentally, an amount I had received a few months prior from the proceeds of an investment my Dad made in my name back in 1970.
  • We had brewed a few promising varieties of tea in Barry’s kitchen – among them green tea with mint which became Moroccan Mint, spiced black tea which became Kashmiri Chai and brewed hibiscus with fruit based on a German dessert known as Rote Grutze that became Black Forest Berry.
  • Of the many label concepts we developed, the one with the big T in the front, in which the T acted like a keyhole into the culture behind the tea recipe, seemed the most promising.
  • My wife and three sons were on board for the ride – Julie was ready to put up with a brewmaster living in the basement and the boys were happy to serve as taste testers, even if our youngest Isaac had to drink his Black Forest Berry from a baby bottle.

Over the following months, we figured out where to buy bottles, labels and caps, where to make our product, and lots of other challenges. Within our first year we launched our first organic bottled tea, and four years later, our first Fair Trade certified tea.

We grew to become the best-selling tea in the natural foods channel, and then in 2008 we sold a 40 percent equity stake to The Coca-Cola Company. Coke eventually purchased Honest Tea in 2011. Seventeen years later, I’m still running the company, and we’re in more than 100,000 stores and part of the world’s biggest beverage company. Here are the Knowns about our business today:

  • We’ve built a brand that delivers – certified organic, just a tad sweet, (if sweetened at all), and Fair Trade certified whenever possible.
  • We’ve built a spirited and passionate team of people that still brings competitive, creative and entrepreneurial energy to their work.
  • Consumer tastes and preferences continue to evolve toward our transparent approach to food – people want to know how food was grown – where it comes from and how it was harvested.
  • There is strong support for our enterprise from our parent company – as the beverage landscape shifts, we continue to be an important part of The Coca-Cola Company’s future. From the Chairman to the bottler level, we see tremendous appreciation of our team, our mission and our business. It helps that we have consistently outperformed our annual business targets for volume growth, gross margin and operating income.
  • My family is still intact and on board. The brewmaster moved out, and the older boys are in college but Isaac, who graduates from high school this Spring, still stops by the office for the occasional taste test.

And yet there are still some Unknowns:

  • How wide and how deep can we expand our quest to democratize organics? Our brand is now expanding to faster food restaurants and convenience stores, venues where we either haven’t been or have struggled. We know consumer diets and preferences are evolving toward what we are offering but how do we make our products accessible, relevant and available to all?
  • How do we connect emotionally with that broader audience, and deliver a message that inspires them to choose Honest?
  • Can we continue to innovate with our brand and our marketing in a way that drives our mission forward?

We know more now than we did in 1998 but these Unknowns help ensure that we still have a role to play in building the Honest brand. Recently I sent a thank you note to one of my sales managers. She emailed me back that she wished she had joined the company earlier. I reminded her that the good old days weren’t always good – we had lots of white-knuckle years where we struggled to get into stores that weren’t ready for us, and payroll was iffy. I told her that in many ways, Honest Tea is now at the place we used to daydream about – an established brand that is finally able to capitalize on the distribution capabilities of the world’s largest beverage company. In many ways, our tea party is just getting started.

Article by Seth Goldman, Co-founder & TeaEO of Honest Tea (www.honesttea.com ), the company he created in 1998 with Professor Barry Nalebuff of the Yale School of Management. Today, Honest Tea is the nation’s top selling organic bottled tea, specializing in beverages that are organic, Fair Trade Certified™, and Just A Tad Sweet®. In March 2011, Honest Tea was acquired by The Coca-Cola Company, becoming the first organic and Fair Trade brand in the world’s largest beverage distribution system. The transaction has helped deepen the reach and impact of Honest Tea’s mission — Honest beverages are now carried in more than 100,000 outlets throughout the country. Seth continues to lead the enterprise out of Honest Tea’s eco-funky headquarters in Bethesda, MD.

Under Seth’s leadership, Honest Tea has developed innovative partnerships with its organic and Fair Trade Certified™ suppliers in India, China, South Africa, and Paraguay, as well as with 1% for the Planet, City Year and Food Corps. In 2014, Seth was recognized by the United States Healthful Food Council with a REAL Food Innovator Award for helping change the food landscape, in 2015 Beverage World magazine placed Seth at the top of its list for a cover story on the top 50 disruptors in the beverage industry.

He serves on the boards of the American Beverage Association, Bethesda Green, Beyond Meat, EcoLogic Solutions, and sits on the Advisory Boards of Net Impact and the Yale School of Management. In September 2013 Seth and Barry celebrated the release of their first business book “Mission in a Bottle – The Honest Guide to Doing Business Differently – and Succeeding” which was published by the Crown Business division of Random House and became a New York Times Best Seller.

Seth, his wife, and three boys live near Honest Tea’s Bethesda, MD headquarters in an eco-friendly house.

Coca-Cola Bottling Company of Northern New England is an avid business partner with the Green Alliance. To learn more about CCNNE, click here.