Changing Our Look Without Losing Our Brand

Growing up we’re always told that it’s what’s on the inside that counts.  And while that’s certainly true with respect to personal integrity, I’ve learned that when it comes to beverages, if your label doesn’t catch peoples’ attention, they may not get the chance to taste what’s inside.  (Unless of course you have a sampling team in the store, which is still our primary marketing strategy.)

One of my favorite ways to test the effectiveness of our labels is walking into a store and seeing if I can spot our brand in a cooler in the back.  Our glass bottles definitely pass this test, and that’s one of the reasons we have no immediate plans to redesign their look.  But I often found that our PET bottles didn’t really stand out.  While we generally rely on our instincts, we recognized that it would be helpful to do more research before making such an important change.  So in 2008 we conducted a series of focus groups with both current and potential customers, so we could understand how consumers responded to our bottles alongside the competition.  The sessions, along with some other studies we conducted, reinforced the fact that the labels on our plastic bottles needed to more effectively communicate our authentic ingredients and taste appeal.

We’d been so focused on selling our drinks for the past three and half years, that we hadn’t given much consideration to changing the labels. It’s a little bit like changing the way you comb your hair – you get used to it, and rarely wonder how you’d look a different way.  But now that we’ve gained national distribution and our drinks are in places where people have little to no awareness of our brand, we need to find a way to better communicate our name and what our brand stands for.

When we started working with Turner-Duckworth, a highly-talented design agency out of San Francisco, we made it clear any new design would have to retain our core branding around organics and simple, elegant design.  But in order to empower the designers to explore new approaches, they asked us to give up some elements we had considered core to our package identity.  After some grueling debates, and much hand-wringing, we gave Turner-Duckworth the green light to part with the following elements:

• We agreed to move away from our black borders on top and bottom of the label…we found that the name “Honest Tea” or “Honest Ade” on white against the black gave the name a recessive presence, instead of a bold visual identity.

• In recognition of the fact that the word “Honest” is the most important part of our name, we decided to move away from having the word “Honest Tea” all on one line.  While some were worried that breaking up the words might make it easier for consumers to miss the pun (Honest Tea = “Honesty”), we decided the benefits of creating one uniform brand identity that emphasizes the word “Honest” was worth the tradeoff.

We explored a few treatments of our bottled tea without the big T frame, but we concluded that the “T” is an iconic element of our brand and still a very effective way to communicate tea in the bottle.  We were also worried that veering away from the T might be perceived as abandoning our roots.   We were conscious of Tropicana’s redesign experience in 2009, when the juice maker dropped its trademark straw in an orange, but later brought it back after consumers and sales responded negatively to the new look.

We saw a variety of exciting label designs, some of which tested quite well, but more than once we came up with lovely images that might have worked well for a different tea brand, just not the Honest brand.  To really dial up the iconic-ness (if that’s a word) of our packaging, we even considered a design treatmentthat incorporated the big T in all of our varieties, including Honest Ade, but concluded that we might confuse the consumer if we had Honest Ade (which has no tea in it) in a bottle with a T label.

Eventually, we ended up with striking labels that clearly say “Honest”, clearly communicate T, and manage to incorporate some of our offbeat personality, while also highlighting the high-quality ingredients and taste.  I’m particularly fond of the way fruit is depicted with unexpected scale and whimsy in the Honest Ade line.  I’m also glad we found a way to include images of freshly-picked tea leaves on the tea line to help establish that our drinks are brewed with real tea leaves.  And finally, since we love sharing information about our products and our company, we even managed to sneak in more information on the labels by inserting facts and stories on the inside of the labels, which consumers can access by peeling back the “Thirsty For More Info?  See What’s Inside!” tab on every label.

After more than 18 months and much hand-wringing, we feel like we’ve done our work.  Now it’s time for the marketplace to decide.  Please let us know what you think!

Dos and Don’ts of Raising Money From Angels: The Devil Is in the Details

Last month, I had the chance to speak to a room full of entrepreneurs and angel investors at the Bethesda Green Business Incubator about the dos and don’ts of raising money from “angel investors.” Here are a few highlights from my remarks.

Many service-oriented businesses can be started with minimal start-up capital. But for companies selling a product, the money for inventory needs to come from somewhere. When we launched Honest Tea back in 1998, we got our first order for 15,000 bottles from the local Whole Foods region. We had a customer, but we didn’t have the cash on hand to buy the bottles, the tea, or pay the co-packer to make the finished product. So we raised about $500,000 from the only people who couldn’t say no – ourselves, our parents, my sister, and my co-founder Barry’s college friends. (Barry is 8 years older than I am, so his classmates had accumulated more wealth.)

I’m not a lawyer, and you should consult one before raising investment funds, but it’s important to remember that there is a legal definition of an accredited investor, and any stock purchase agreement should take that definition into account.

Here’s a diagram of our investment community after our startup round (circles are all equal and not representative of investment amounts):

Once we got our product on the market and started selling, we needed more cash to expand our sales team and our inventory. So, we started to raise money from people we didn’t know. We were approached by consumers who liked our products and wanted to invest. We also received numerous inquiries from prospective investors in response to media coverage. If there is a story, don’t forget to mention that you are raising money. Other investments were more creative. A PR/Design firm took their retainer in stock for a certain amount of time. I did speak to a few angel investment clubs, but they were not an effective use of my time. 

In 1999, Barry and I raised $1.2 million through angels and other investors. Here’s what our shareholder community looked after this round:

So what are the main benefits of angel investors?

• Cash. You need cash to grow your business and angel investors have it. It sounds obvious, but don’t take money from angels or investors unless you plan on giving it back.
• Control. The terms are less demanding.  Angel investors are looking to have less control over your company than venture capitals or institutional investors regarding shareholder rights, governance, and decision making. They are around for the ride. Because Honest Tea raised funds from angels, our cofounder, Barry, and I were able to protect Honest Tea’s mission.
• Angels can offer advice, experience, and support.
• They have great networks, can serve as local cheerleaders for your product or service, and can help get you connected.

But there are tradeoffs: 

• Angel investors take more time. Over the ten years that we raised close to $10 million in angel funding from 100+ investors, I easily had over 500 conversations with potential investors. Our time might have been better used raising that same amount from ten strong institutional prospects.
• Angels may have less expertise in your industry. We were fortunate to tap into the local real estate network, but they didn’t have any beverage experience. They were a great source of cash, not beverage expertise. As the principals looked to diversify their portfolios, they didn’t have many contacts in the beverage industry.
• When times get tough, there’s no guarantee that angels will pitch in to keep the lights on.
• They can get cold feet – personal situations do change, divorces do happen…

Here are the Honest Dos and Don’ts:

Do’s

• Clearly define expectations. Be very specific about shareholders rights, expected timeframes, and exit strategies. Know your industry so you set realistic goals. It’s always safer to be conservative and under promise.
• Communicate frequently with investors. We sent quarterly updates on the good and the bad as well as industry-wide news.
• Demonstrate your own commitment. Put skin in the game.

Don’ts

• Never let an angel investor dictate terms. Listen to their feedback but don’t offer special status or authorize special shares. We only issued common stock to all investors for the first ten years.
• Do not make sudden cash calls. If you know you’re going to need money, work on it ahead of time. No one wants to feel like they’re helping a sinking ship stay afloat.
• Never get on a plane to meet an angel investor. You need money, but you are not desperate. If you put too much time into raising money from investors, you are probably not focused on the business.
• Insist on meeting the principals, eventually. You need to know who is writing the check.
• Don’t expect too much help with the business, aside from cash.
• Angels can be distracting.  Don’t invest all of your time managing your relationship with angels instead of doing your job.

One of my favorite quotes from one of my favorite Honest Tea angel investors is:

“Lack of money is no obstacle. Lack of an idea is an obstacle.” – Ken Hakuta

It’s a reminder that while a CEO always needs to make sure the enterprise has enough money to keep the lights on, the best way to make sure there’s money is to sell your product or service.

Want to hear more? Check out this highlight video from the event:

http://www.youtube.com/watch?v=MUn6IpiTe9o

After You Close a Deal

Earlier this month we closed our transaction with Coca-Cola.  I can't say that I expected any of this to happen and so occasionally I felt as if I were watching things transpire, then I would realize that they were actually happening to me.  It's been an exciting, intense and occasionally surreal time—and that's not even including my son's participation in the Maryland State Wrestling Tournament, which was a source of additional stimulating moments. Here are some of the interesting experiences I had post-transaction:

The Media Announcement. We held a press conference at our office to announce the transaction.  I was joined by my co-founder, Barry Nalebuff, Mike Ohmstede from Coke's Venturing & Emerging Brands unit, and Montgomery County Executive Ike Leggett.  We also invited representatives from our community partners, such as Bethesda Green, Bethesda-Chevy Chase High School, the Boys & Girls Club of Montgomery County, and City Year, Washington, D.C.  

I noted that while the event was an important day for our shareholders, who are getting a nice return on their investment, it was also an important day for our stakeholders—community and national nonprofit partners, who we will continue to invest in through our continued presence in the community.  It was also exciting to unveil the design for our new PET bottle, which will feature the words "Est. Bethesda, MD 1998" on the bottom.

At the conclusion of the press conference, we unveiled a big, red, environmentally-efficient, co-branded vending machine half-filled with Coke drinks and half-filled with Honest Tea products.  Despite the fact that we've been working with Coke since 2008, when I pushed the buttons to order a drink, it was the first time I'd seen an Honest Tea bottle come out of a Coke machine.  As the bottle emerged from the machine with that characteristic thud, I recalled all of thousands of Coke machines I've spotted around the world, and at that moment the scale—of what we are doing, and what we can achieve—really hit home. 

My Final Investor Call. Immediately after the press conference, we convened a teleconference for shareholders. We announced the transaction to them, explained the timing, shared calculations for the return on their investment, and then opened up the floor for comments and questions. After some questions around logistics of the transaction, we heard from shareholders who not only shared their thanks, but reminisced about the early days with Honest Tea, and how proud they were to be part of the experience. We've been holding annual calls with our investors ever since we started, so it was bittersweet to realize that this was the last official conversation we would have with them. We thanked them for their confidence and their capital, and I was proud (and relieved) to have been able to deliver a return on both. One of our longest-standing investors noted that he invested a portion of his kids' college money in Honest Tea eleven years ago, and his kids are all now in college, so the timing was perfect for him.  

The Celebration. That night we had a celebration at Redwood, a restaurant down the street from our office. We welcomed investors, employees and several folks from Coke who helped close the deal. At the party we gave toasts, thanked the employees and investors who made it happen, and showed a video that captured many of the highlights and of course some of the low points of the past thirteen years. Barry noted that at a time when there are contentious changes of leadership going on around the world, he was stepping down as chairman without protest because he was confident that Honest Tea is in good hands.

I was delighted that my parents could join the rest of my family at the celebration. Along with Barry's parents and my sister, they have been some of the company's most reliable investors, so it was very meaningful for me to be able to celebrate the moment with them. Three years ago when I had talked with my Dad about taking on an investment which might eventually mean losing control of the company, he was concerned because he said, "I see how happy and fulfilled you are building this thing and I'd hate for you to lose that."  So it was especially nice for him to know that I am still excited about leading the enterprise.  

The Corporate Visit. The next morning we got up early to fly to Atlanta to introduce Honest Tea to all of the employees at Coke headquarters.  When I walked out of the airport I was met by Patrick and Matt, our two field marketing geniuses, who had arrived in Atlanta the night before. I was surprised to see them driving an Honest Tea vehicle, since they had left the closing celebration in Bethesda the night before, heading for the airport.  It turns out they had stayed a bit too long at the party, were likely to miss their plane, so they drove overnight (8 hours) to Atlanta! Though I was concerned for their safety, or at least their sanity, it was good to know that their passion and commitment to the brand was just as strong the day after the transaction.

The front entrance to Coke's headquarters feels a bit like one of Washington, D.C.'s national monuments—a big marble atrium, with flags around the perimeter.  It was surreal to walk in and see Honest Tea's flag displayed front and center. Shortly after I walked in, I was escorted into a meeting with the senior management of Coca-Cola North America.  Sandy Douglas, the president welcomed me, "Here's our TeaEO" and I received a very warm ovation.

Our team conducted a sampling event for Coke employees—we gave out 7,000 bottles of our Half Tea and Half Lemonade, hosted a tea-brewing session, and I gave some brief remarks.  I highlighted our entrepreneurial roots, our organic ingredients, the passion of our employees and the growth opportunity that we are excited to share with Coke as we spread organic and low-sugar drinks across the country. We closed the brief ceremony by ringing a gong to officially finalize the transaction.

TV Interviews and a Trade Show. The next week was highlighted by a media tour in New York and the Natural Product Expo in Anaheim. I did an interview with Pimm Fox on Bloomberg TV, and got to meet (the real) Erin Brockovich, who was scheduled to be interviewed just after me. I talked with her about the importance of organics, and her new book.  

Our booth at Anaheim was as busy as ever, or perhaps even busier, as we introduced the first brewed cocoa drink of its kind, Honest CocoaNova.  It was gratifying to see the excitement from our team about the new product line and to see the overall high level of energy and dynamism at the show, which is my single-best way to assess the health of the natural foods industry.

So now we're back to work in Bethesda.  In terms of economic structure, our enterprise has changed, but on a day-to-day basis, it doesn't feel any different.  Although I didn't realize it until a few days after the deal closed, for the first time in at least nine years, the company didn't hold any loans that were personally guaranteed by me.  When we first took out those loans, which were in excess of my net worth, I used to lose sleep over the risk I was exposing my family to.  But over time I stopped worrying, not because the risk had gone away but because I had so many other things to worry about.  

I'm not sleeping any better than I was before the transaction but, then again, I've always felt that sleep is overrated.

IPOs Aren't the Only Way to Access Capital

Today I participated in a conference held at the Treasury Department on access to capital. The session, which was convened by Treasury Secretary Timothy Geithner, and Karen Mills, head of the Small Business Administration, explored what the government can do to make it easier for entrepreneurs to access growth capital.

I participated on a panel that explored the environment for initial public offerings or IPOs.  As someone who raised money from alternatives sources, I had a different take than the other panelists.  Here is a summary of the statement I gave:

Imagine we were back in the year 2000 and I presented the following IPO opportunity to you. 

I'm offering you the chance to invest in a lottery, also known as the beverage industry, where according to Beverage Marketing Corp, more than 20,000 new products were launched since the year 2000, but only 35 of them grew to more than $100 million in sales.  That's a success rate of less than 2 in 1000.

Now the typical public beverage company trades at 12-15 times EBITDA, but my company will have no earnings, in fact, my company will have negative earnings for the next ten years, that's forty quarters of losses!

But wait there's more—in addition to losing money for 40 quarters in a row, my company will commit to seeking out organic ingredients, which are more costly, harder to find, and more subject to price fluctuations because of the limited supply.  

And just to sweeten the deal, my company will commit to purchasing Fair Trade certified teas, which means we will further shrink our margins so that we can pay a premium to tea pickers in India and China.

And finally, in case I didn't scare you off yet, my company will only sell drinks with 17-30 calories per 8 ounce serving, even though the typical calorie profile of the competition is 80-100 calories.

For obvious reasons, this is an investment opportunity that I wouldn't dare offer in the public markets.  But despite its scary fundamentals, Honest Tea proved to be a very rewarding investment.   From 1998 to 2007 we raised $21 million in angel and private equity before we sold to Coca-Cola this month for more than $100 million.

Mission-driven enterprises like Honest Tea and Stonyfield Farm yogurt avoid the IPO route to financing because they need investors who aren't focused on quarterly earnings, and understand that long-term decision-making will be in the best interests of the brand as well as the planet.  But the public markets don't just have their limits on the fundraising side, it's on the exit as well.  Whereas the public markets wouldn't know how to properly value our long-term decision-making, acquisitions by strategic partners, especially those that can help expand distribution, such as Group Danone for Stonyfield or Coca-Cola for Honest Tea, have delivered healthy returns to our investors, and healthy brands to the American public.

Mission-driven (or socially responsible) enterprises are really just companies that embrace long-term thinking, with a broader understanding of who their stakeholders are.  If the government wants to support enterprises with a longer-term vision, it should explore providing capital gains tax breaks to investors who buy and hold their investments for at least five years.

Ownership Matters

Yesterday we informed our shareholders that Coca-Cola intends to exercise its right to buy the remainder of Honest Tea. While that development on its own is not news, it is another step toward closing the transaction. But one new piece of information we disclosed is that Coke won't be the only owner. I will able to repurchase most of my personal equity in the company and Honest Tea will continue to be run out of Bethesda, Maryland. 

This is an unexpected, though positive, twist to the transaction.  There were no guarantees in the deal with Coke back in 2008, that I would have the right to keep any stock.  So why would Coke allow me to maintain a stake in the company, even though it might cost them more in the future?  Because ownership matters to entrepreneurs. When I say that I own my business plan, I really mean it. The business world is riddled with tales of entrepreneurial brands that lost their spark after they were acquired.  Once the founder loses ownership, his or her motivation to keep building, inspiring and sacrificing diminishes, and as a result, the rest of the team transforms into managers instead of entrepreneurs.  

The most successful post-transaction arrangement I've seen is at Stonyfield Farm, where my friend and Honest Tea board member, Gary Hirshberg, retained his ownership stake alongside parent company Danone. It was Muhtar Kent, Chairman & CEO of Coke, who recognized the value of having me continue to be an owner, and I appreciate his confidence in the future we can create for Honest Tea.  

So my name will still be on the bottle (as will Barry's, my co-founder who will continue as an advisor, along with Gary Hirshberg.) I will strive, as I always have, to build a brand that resonates with my concerns about our nation's health and our planet's future.  

And yet for the first time in thirteen years, I will be the only employee with ownership. Over the years our option plan enabled employees who worked with the company for more than a year to earn stock.  And many have done quite well.  We have always encouraged our employees to think of themselves as owners because it doesn't take a behavioral scientist to know people will think twice before wasting money if they are spending it out of their own wallet.  So a new challenge for us will be to find ways to continue to engender a sense of ownership as we grow. 

I initially debated whether I should tell our employees (or the public) about my continued ownership, but I chose to share this news for a few reasons. First, I've always tried to run the company transparently; second, it helps communicate that I'm committed to the enterprise; and finally, this is an exciting new approach to innovation for Coke, and I hope we will prove that it works. 

The usual course of events in beverage transactions is for the entrepreneur to stick around for a few months as a consultant and then leave to pursue travel and other interests.  As one entrepreneur put it, "For the first few weeks, they want to know your opinion, for the next few weeks they want to know your phone number, and after that, they don't want to know you." The fact that I'm not going anywhere, has helped us retain our wonderful team, and helped us continue to attract top talent. 

One other personal implication of retaining ownership is that most of my personal financial upside will stay inside the company. Some say you shouldn't keep all your eggs in one basket.  But I'm more in line with Mark Twain who wrote:  "Put all your eggs in the one basket and then watch that basket."  I'm staying put and so is Honest Tea's world headquarters. My family is happily settled in Bethesda, our boys can all bike to their different schools from where we live, and I'm fortunate to be able to do something I love.  I have always kept in mind the tale of my friend and former Honest Tea board member Mark Ordan, the CEO of Fresh Fields, a supermarket chain which received a buyout offer from Whole Foods back in 1996.  Rather than take the offer, Mark was eager to continue building the enterprise, but some of his investors were eager to cash out.  As one of them put it to him, "Look, we'll close this deal, you'll get a nice pay day, and then you can go do whatever you want to do."  But Mark responded, "I am doing what I want to do."

And so am I.  After struggling for more than a decade to cobble together distribution for Honest Tea, I can't imagine walking away from the business now that we finally have a national footprint in place and the chance to democratize organics in a way that's never been done.  This tea party is just getting started. 

A New Generation at Seventh Generation?

I was disappointed last fall to see my friend Jeffrey Hollender, one of the early leaders of the green business movement, fired from his role as Chief Protagonist at Seventh Generation, the company he founded in 1988 and ran for more than 21 years.  When I was typing that last sentence, I was trying to think of a euphemism for "fired" but realized that while the word has a harsh sound, this is not a situation that calls for sugar-coating.
 
As a co-founder of my own green company, I realize I'm biased, but founding entrepreneurs bring something to their enterprise that cannot be replaced—their vision and passion help get the business off the ground and often see the long-term in a way that most employees rarely do.
 
I've known more than a few beverage entrepreneurs who were ungraciously asked to leave earlier than they would have liked. Usually the separation is due to (what is judged to be) poor performance or differences with the company's board. Given the nasty, brutish and short lifespan of most beverage companies, it's often the case that the founders are shown the exit before shareholders realize an exit for their investment.
 
Because there are some legal issues involved with Jeffrey's departure, neither he nor the Seventh Generation board are talking too much about the situation (though consumers certainly are.)  My understanding is that Jeffrey came to have a difference of opinion with the board (which included some relatively new outside investors) and a new CEO that Jeffrey hired.  And perhaps some day we'll learn the details, but from the outside there are at least two important lessons:
 
1. Staying private does not guarantee that the founding entrepreneur will always be in power.  Jeffrey was one of the skeptics when Honest Tea made its deal with Coke—he worried that our brand would lose its way once we partnered with a big multinational.  And while dilution of our brand continues to be a risk, it's also clear from Jeffrey's firing that the only way an entrepreneur can guarantee he won't be forced out is to create a business that's profitable and doesn't need outside investors.  Since Seventh Generation is a private company, it's difficult to know how the company was doing, but it's safe to assume that Jeffrey's choice to bring in new investors (who ultimately turned out to be unfriendly) was driven by a desire to improve sales or profits, or both.  I have dodged more than a few bullets myself from investors posing as "angels."  One wealthy individual presented me with a term sheet that set aside hundreds of thousands of stock options to attract new management.  When I told the investor that I didn't see a need for such a large option pool, he gave me a murky answer about various contingencies.  I later found out that he intended to use the proposed option pool to hire his own CEO.  Needless to say, I didn't sign that term sheet!
 
2. Succession selection is critical.  The CEO Jeffrey hired to replace himself was a former Pepsi executive who had no background in the causes and mission-related work in which Jeffrey has immersed himself for more than three decades.  Although there is an inspiring generation of new business leaders rising through the ranks of American business, thanks in part to Net Impact, there are still too few socially conscious executives prepared to lead a $100 million+ company.  And just as it's unrealistic to expect someone five years out of business school to lead a $100 million+ company, it's equally unrealistic to expect someone who has worked in traditional companies and never been involved in green business or the non-profit sector to "get" how to lead a mission-driven enterprise.  It takes a lot more than good marketing skills—it involves an understanding of the issues, the players, and the way non-profits think. 
 
Jeffrey's firing is certainly a cautionary tale for me, and a reminder that there are no guarantees in business, even for founders.  I'm pleased to report that Jeffrey has already immersed himself in a new cause-driven organization, American Sustainable Business Council, where he will continue to be a wise and effective voice for more progressive business.  In the meantime, those of us still in the trenches need to make sure we perform, keep an eye on our competitors, and keep an even closer eye on potential investors who claim to be supporters.
 
The Chinese military strategist Sun Tzu said "Keep your friends close, and your enemies closer."  But when it comes to investors, I find myself in disagreement with the General—if you believe you've got potential investors who are enemies, stay away from them.

Changing the Status Quo

It's official.  Today I was elected a board member of the American Beverage Association, which means that either we've changed or the Beverage Establishment has changed—and maybe both.

When you start a beverage business out of your home, you are by definition an outsider because distribution—which is key to the business (see blog post "The Customer is Always Powerful") is almost totally controlled by Coca Cola, Pepsi, and Dr. Pepper/Snapple.  All beverage upstarts resent the Establishment because its near-stranglehold on distribution makes it difficult for us to get our drinks to customers.  We also tended to mock their so-called "innovations," which ten years ago seemed to be variations on vanilla cola, diet vanilla cola, vanilla cherry cola, diet vanilla cherry cola... you get the idea.  

So as an entrepreneur, it's very easy to develop an anti-establishment mentality. I was so conscious of being an outsider that sometimes I made things more difficult for myself early on—among other things, Honest Tea avoided hiring people from the beverage industry because they stood for all the things we thought we stood against.  

A lot has changed on many fronts. Pepsi and Coke now own juice companies like Naked and Odwalla respectively, as well as lower-calorie drinks such as Vitaminwater.  Companies like Nestlé Waters have been leading the charge toward lighter-weight bottles and Coke has launched a recyclable bottle made with renewable plant-based material.  And the trade group that used to operate as the National Soft Drink Association evolved too—it rebranded itself as the American Beverage Association.  Instead of being a group that used to fight attempts to engage in discussion about the role of drinks in our society, the ABA joined with the American Heart Association and the Clinton Foundation in 2006 to create nutritional guidelines that led to the voluntary withdrawal of sugary drinks from most schools.  The result of the initiative was an 88 percent decrease in the amount of beverage calories sold in American schools.

So who changed: Honest Tea or the Beverage Establishment?  Well, it's true we now occasionally hire people from the beverage industry, and we do work with the Coke distribution system, but Honest Tea is still making organic, Fair Trade-certified tea, and we still offer drinks with less than half the sugar of most beverages.  It's also worth noting that over the 12 years since we've been in business, the average calorie profile of bottled teas has moved from 100 calories per 8-ounce serving to 60.  The average calorie profile of kids' pouch drinks has move from 100 calories per pouch to 75.  

There's still a lot of work to be done around helping America's beverage companies become more sustainable. National recycling rates are still below 40 percent and I'm sure more can be done to promote healthier beverages.  It feels a bit surreal to think of myself as part of the Establishment, but unlike 12 years ago when it felt like it was Big Soda against everyone else, the industry has definitely evolved and embraced entrepreneurial innovation. If this is the New Establishment, I'm proud to have a seat at the table. 

What Earth Day Means to Me

In 2004, I took my family to visit the Makaibari tea garden in Darjeeling, India, the supplier of our oolong tea.  My oldest son Jonah, who was 11 at the time, was complaining that human pollution and environmental abuse was destroying the earth.  But the owner of the garden, Raja, was much more philosophical.  He corrected Jonah: "You don't have to worry about the Earth—it's not going away.  Human activity and abuse may cause temperature changes and catastrophes that kill off species including humans, but the Earth will still be here.  So don't feel sorry for Earth, feel sorry for the way we live because that is sure to change."

Raja is an unusual person. He grew up and lived in a privileged background as the son of a tea garden owner.  A few decades ago, he was nearly killed in a horse riding accident. It was then that he got serious about leading a life of meaning.  He made Makaibari one of the first biodynamic gardens in the world, creating an environment in which the whole system lives as one organism—feeding and fertilizing itself.  One day when our son Elie was taking a shower after a long hike, he screamed because he found a scorpion in the corner of the bathroom.  Raja calmed Elie down and showed Elie the scorpion that made its home in Raja's shower behind the door.  Raja told Elie, "I don't bother him and he doesn't bother me," and indeed the scorpion seemed quite at home.

Though Raja's scorpion may not seem appetizing, it can be a great metaphor for one way to think about nature. The scorpion was perfectly at home in a moist, warm environment and as long as it wasn't disturbed, Raja and the scorpion were able to live in harmony.  In the same way, the phrase "Nature Got It Right" speaks to the fact that the taste of natural ingredients are best when made as nature intended.  Nature's ingredients are healthiest without all the artificial chemicals and of course our air, water and land are better off when they are able to do what they're supposed to do.

Many of nature's short-term actions may not always please us—just ask our lawyer who is stuck in Europe due to the Eyjafjallajokull volcano in Iceland (though having a lawyer stranded in Europe isn't always a bad thing!).  But in the long term, trying to outsmart or out-technology nature doesn't work.  "Nature Got it Right" can also be understood as a warning—we may think we know better but in the long-term, nature will do what it wants and we can either respect it now or pay for the consequences of our actions later.

Whether we spend Earth Day selling organic tea, lighter-weight bottles or reusable shopping bags, every transaction we conduct at Honest Tea helps support an effort to take our economy and our ecosystem in a more sustainable direction. It's a philosophy I'm proud to live by.