Honest Branding: 5 Questions With Honest Tea Co-Founder Seth Goldman

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Seth Goldman - Co-founder of Honest Tea

Seth Goldman co-founded the Honest Tea brand out of his house 20 years ago, and it’s now the top-selling organic bottled tea in the U.S., with a growing presence around the world. Goldman has played many roles for Honest Tea—CEO, growth driver, mission-driven guru, product tester and “TeaEO” among them—but never before was he the face of the mission-driven brand.

That has changed with the new brand campaign for Honest Tea, which is the first to feature Goldman himself.

In one spot he’s shown standing with farmers in a tea plantation in India, discussing sourcing raw materials for Moroccan Mint, one of Honest Tea’s most popular items. Meeting with tea-growers recalls how he started the brand 20 years ago, but now Honest Tea is owned by Coca-Cola, and that ownership has made a world of difference to what Goldman started with co-founder Barry Nalebuff, a Yale University professor.

They co-wrote a popular business book, Mission in a Bottle: The Honest Guide to Doing Business Differently—and Succeeding, which also broke the rules by being told in comic book form.

Honest Tea was sold in 15,000 retail accounts before Coca-Cola bought a 40% stake in 2008; now the brand is available in 140,000 U.S. retail outlets and counting, and has expanded to more than 10,000 stores in Europe. Revenues were $218 million in 2016, vs. $23 million in 2008. And Coca-Cola, which purchased the rest of Honest Tea in 2011, helped the brand accelerate toward Goldman’s goal of 100% of its teas being Fair Trade Certified, compared with just 40% in 2008.

It’s a shining example of how a major conglomerate can acquire a startup and make it work for both. After Coca-Cola took its initial stake in 2008, Goldman stayed on as “TeaEO” Emeritus to help guide the brand’s growth while enjoying Coca-Cola’s financial, distribution and marketing clout. And he’s still championing its values-based brand proposition, including seeing Honest Tea become the 1,000th brand to sign the Climate Collaborative pact to take steps on climate action and formalize its environmental commitments.

“We’re seeing a lot of exciting things happen with the brand,” Goldman told brandchannel. “It’s what I hoped for.”

Goldman, who’s also Executive Chairman of Beyond Meat in addition to keeping his hand in with Honest Tea, talked to us about what it’s like to be in TV ads, how he feels about the Honest Tea-Coke relationship after a decade, and more.

How is it appearing in Honest Tea’s TV ads for the first time?

It’s different but fun. We’ve gotten a great response. What we were hoping to highlight was the origins and authentic connections of Honest Tea to communities. It’s great to get back to one of our longstanding partners. My favorite part of the ad is the part spanning the tea bushes and mountains.

And then I’m on a train back from New York, where it’s great to see the signage on buses and buildings and around the city. It still communicates the beauty of the environment we’re sourcing from and the richness of the leaves and it’s really nice to see us highlighting those direct equities. The messaging is delicious, organic, honest, which is straightforward—and that’s what we’ve been selling too.

Has the sale to Coca-Cola met your expectations?

It is what I hoped for. We’ve expanded our distribution more than ten-fold. That’s pretty powerful. And not just the accounts, it’s the kind of places. For me one of the breakthroughts was getting Honest Kids into McDonald’s, part of our mission to democratize organics. That was one key piece.

The other key piece to me is keeping the brand’s mission intact. People worried they were going to try to shortcut organics or fair trade, and we have not done that. We’re still a leader in the organic community and fair trade and we’re working in Europe to get fair-trade certified; that took many years in the U.S. We were always going to be eager to continue to grow, and this means growing in distribution and in the ways we express the brands. And we’re going to continue to expand.

What has Honest Tea taught Coca-Cola?

There’s been a lot of interest in the brand around the world. In most of these markets organics is new for Coca-Cola in their distribution. So there’s been a learning process in terms of getting bottling plants up to speed and doing sourcing work. But also they bring a very entrepreneurial mindset to it as well, acting quickly and nimbly.

The other thing, which is definitely new to their playbook, is they’re willing to act before everything is perfect. You can wait until everything is exactly as you want it, but you never get anywhere. It’s wonderful to see that and that’s very much not part of the typical Coca-Cola approach.

Any big risks along the way?

We’re always going to be ambitious for growth. If I’m not, I’ve given up. That’s part of my job. But there were moments when [Coca-Cola was] making some long-term planning decisions that I disagreed with, and I absolutely intervened. That’s part of my job. I was able to help course-correct.

I didn’t get everything I wanted but got I got involved early and directly enough that there were actions taken that wouldn’t have happened if I hadn’t been there. There were some decisions around pricing. It wasn’t that they were trying to cut prices [but] whenever you do pricing you want to be able to phase in your decisions. And it was a move that was too prompt [and] not strategically implemented. They wanted to raise prices too fast and we worked it out.

How do you see Honest Tea evolving?

We are seeing a lot of exciting things happening with the brand. In the U.S., reinforcing the health and wellness credentials is important (and) becoming more relevant, more valued and appreciated by consumers. The messaging in the campaign highlights the glass bottle and also Moroccan Mint, an original SKU going back 20 years ago. We’re reinforcing that package. We continue to see increased distribution of our products.

And not just in the U.S. I was (recently) in Europe, so to be able to launch the brand I went on a swing starting in Rotterdam, then to Hamburg, Zurich and London. What’s neat about it is each market is launching some version of the Honest product line. It’s not a uniform launch. Spain is launching a coffee; Switzerland had both tea and a sparkling lemonade, which was delicious.

I wasn’t orchestrating that as much as supporting it, but in each market I went to it was great to see the products. Two things were consistent: intrinsics, all organic and less sweet; and wherever we went, whether it was a rooftop garden in Rotterdam or an urban garden in Zurich, they all got the brand and were presenting it in the way we want to see it presented, with the right venues and messages.


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