Honest Tea Co-Founders on How to Stay Honest
In 2008, Seth Goldman and Barry Nalebuff, co-founders of Honest Tea, sold a 40 percent stake of their company to Coca-Cola. Two years ago, they sold the remaining shares of their company to Coke. Goldman stayed onboard as president and "TeaEO," to oversee Honest Tea and maintain the original vision--to be a transparent, organic tea company, dedicated to fair trade and recyclable materials.
Now, as Honest Tea approaches $100 million in sales this year, the two recently released their graphic novel about the story of Honest Tea, "Mission in a Bottle: The Honest Guide to Doing Business Differently and Succeeding."
During a recent interview with the University of Pennsylvania's business school blog, Knowledge@Wharton they dished out their advice on how to be successful while staying, well, honest.
Don't lose your brand to an acquisition.
Goldman says that many of Honest Tea's customers were worried about what would happen after the company sold to Coke. He says he responded to their emails and put up YouTube videos explaining why they would sell to a corporation like Coca-Cola. (Even Inc. wrote about it.)
"We told them, keep an eye on us, and if you see us compromising around what we've built this brand on--around organics, around fair trade, around lower-calorie drinks--let us know," Goldman says. "That's where they have proven the skeptics wrong. Because not only have we continued to make organic drinks, but before Coke invested, we weren't all fair trade. And today, all of our teas are fair trade."
Always be prepared.
Goldman and Nalebuff write in their new book about how they have capitalized on opportunities, just by being prepared at the right time and place. Nalebuff sold Oprah Winfrey on the tea after he encountered her at a yoga retreat and happened to have a sample with him.
"I've had entrepreneurs come and talk to me about a food business they're trying to launch. The first question I'm going to ask them is, 'How does it taste, or what does it look like?' They'll say, 'I don't have any samples with me,'" Goldman says. "The nice thing about the food and beverage business is it's not theoretical. It is tangible. You're selling a real product. You have always got to be able to have that tangible product to show people."
Don't get distracted.
Nalebuff, who is a Yale professor, says entrepreneurs should not get distracted by details in operations that they are not passionate about. "In our case, we really weren't great at running a bottling plant. Although we had lots of good reasons to own one, at the end of the day, it was a distraction," Nalebuff says. "It took away our time and our money... In the end, when we sold it, we continued producing at the same bottling plant. It just wasn't our headache, and it wasn't our ownership, and it wasn't our losses."