Social entrepreneur Seth Goldman is the man behind Honest Tea, the nation’s best-selling and fastest-growing organic bottled tea company. Founded in 1998 with his former Business Professor Barry Nalebuff of the Yale School of Management, Honest Tea sources from organic and fair trade tea estates, makes careful choices about packaging and shipping, and has partnered with and supported community development groups from the Crow Reservation in Montana to organizations in South Africa and Guatemala. Goldman writes about how “you can be committed to social responsibility and still build one of the fastest growing private companies in America” on his blog at Inc.com. But with the recent announcement of a deal that gives Coca Cola a 40% stake in Honest Tea, many dedicated drinkers have expressed concerns that the company will be corrupted by the mega-corporation. Goldman is confident that Honest Tea will stay honest. He explains why below.
You were way ahead of the curve with your interest in and dedication to “sustainable” business in 1998. How did you become aware of and attracted to it? What principles or beliefs led you to found a sustainable, socially-conscious business, rather than just attempting to get rich quick? My parents are both professors, and imposed upon me a mindset that we were obligated to lead a life of purpose. Some of that message came across through our family’s Jewish traditions but most of it probably came through dinner discussions which were about big ideas, international issues and rarely, if ever, about weather or sports. Then when I was in 6th grade I nearly lost a family member who was brutally attacked — that incident certainly reinforced the fragility of life and the notion that whatever we do with our time on earth, it should count for something. When I started Honest Tea I was probably more attuned to the notion of business as a vehicle for creating economic opportunity in communities (whether it means a tea garden in India or a bottling plant in Central Virginia) where it is lacking, but as we evolved, I came to appreciate more fully the power we have to impact agriculture and the environment.
Understandably, a lot of people are concerned that Honest Tea will be corrupted by Coke. Is there any chance that Coke might actually be influenced by Honest Tea? The President of Coke himself has said that he hopes Coke becomes more like Honest Tea than vice versa. We have already seen our impact upon Coke in little ways, such as certifying their bottling plants for organic production, taking them to natural product trade shows and socially responsible business conferences, but because their investment in Honest Tea was approved at the highest levels of the company, I am confident Coke sees value in what we have been doing.
What’s the difference between a big investor like Coca Cola “buying in” to a company like Honest Tea, versus Honest Tea “selling out”? Selling out means my team and I take our buyout checks and go off and do something else — while we let Coke takeover the brand and do whatever they want with it. Or worse yet, we stay on and become mouthpieces for Honest Tea while the product evolves into a non-organic, supersweet beverage brand like any other. Coke buying in means that we keep our management team in place, committed to the same mission we’ve stuck to for the past ten years — authentic, organic and healthier beverages made with a consciousness about the impact we have on our customers, the ecoysystem and our suppliers. With the possible exeception of Odwalla, Coke doesn’t really market organic, lower calorie and Fair Trade beverages. So even if they only let us do what we’re doing, they’re buying in. If they help support and expand our presence, even at the expense of their own brands, then they’re buying in to what we’re about.
What’s the most important thing you’ve learned–about business, people, the earth–in your decade with Honest Tea? I believe in karma much more than I used to — sometimes we make decisions that we know are the right thing to do, even if we can’t necessarily justify them financially. Yet, something positive happens as a result that eventually comes back to us.
How has your focus changed in the ten years since founding Honest Tea? In the beginning we were mostly worried about raising money and finding distributors. Now I’ve had the chance to focus more on building our organization and think more broadly about our impact. One of the reasons I’m so excited about the partnership with Coke is because we shift from being a model for change to being an agent of change through our own actions.
Where do you hope Honest Tea will be in another ten years? What about sustainable business as a movement? We hope Honest Tea will be the world’s leading organic beverage brand, driving a worldwide movement at the garden level away from a dependency on synthetic chemicals and toward a reintegration with nature’s own power to protect and heal herself. We also hope that we’ll have contributed to worldwide healthier diets that are less reliant on high-calorie sweeteners and more appreciative of the true taste of natural ingredients. I expect that ten years from now the sustainable business movement will no longer be a movement — that it will become a standard way of thinking — every economic actor will need to address how it balances its role as a consumer and a sustainer.
[Cross-posted from the Jew & the Carrot]