Honest Tea
It seems that Seth Goldman and Barry Nalebuff both came up with the same idea at almost the exact moment in 1997, despite the fact that they were on opposite sides of the planet at the time.
Seth had just finished a run through Central Park, and was bemoaning the fact that the only options for satisfying his thirst were either super-sweet juices or flavorless bottled waters. In the meantime Barry, Seth’s old business school professor from Yale, was touring a tea auction in India to research a case study on the industry, and discovered that great tea is one of the world’s least-expensive luxuries. Once they exchanged e-mails to share their experiences, the dream of Honest Tea was born.
Today, Honest Tea is the best-selling brand of bottled tea in the natural-foods industry, and is available in all 50 states. And, even more importantly to its founders, the company has stuck to its mission of making a delicious, organic, and not-to-sweet tea in a socially responsible fashion. For achieving this dream, Visa Business and Inc. magazine have named Honest Tea winner of the 2003 Dream Big contest.
Of course, like most dreams worth realizing, Seth’s and Barry’s did not come without its share of bumps in the road. The first challenge was finding stores willing to sell the product. “We’ve been told ‘no’ more than we’ve been told ‘yes’ by buyers and investors,” explains Seth. And distribution was a big problem early on. “Beverage distributors weren’t interested, so we’d work with anyone — a cheese distributor, a charcoal distributor, even a corned beef distributor,” says Seth. “As long as they were going to the stores, we’d have them transport our product.” In the early stages, Seth even enlisted his wife to make deliveries on the way to work. The good news was that once stores got the product, it would sell out almost immediately.
But while Honest Tea continues to flourish, Seth and Barry still face the same day-to-day obstacles common to growing companies, especially for one in an industry dominated by huge national beverage companies. “As a small business, we don’t have the financial resources that the big ones have,” says Seth. “Every decision has to make sense. You want to take risks, yet you don’t have that much money to be playing around with.”
So the co-founders of Honest Tea continue to dream big, and won’t be satisfied until their product is on the shelf of every store. Like most entrepreneurs, they’ve been on a long, sometimes bumpy ride, but wouldn’t trade it for anything. “There’s nothing more practical than a good theory,” is how Barry sums up the Honest Tea story. And that story continues to be a successful one.Web site: www.honesttea.com