People who are familiar with the story of Honest Tea may recall that I launched the company with my former Yale School of Management professor Barry Nalebuff. With Barry as board chair and me as the "TeaEO," we made a dynamic duo that built the idea from a startup with five thermoses and an empty Snapple bottle to a national brand acquired by the Coca-Cola Company in 2011.
Barry, who kept his job as a Yale professor, is still a close friend and occasionally provides advice or helps edit our label messages. But as we mark Honest Tea's 20th anniversary this spring, there is another founder who didn't have her name on the label but has been the soul of the brand: my wife, Julie Farkas.
In 1997, when I thought about leaving a promising job at Calvert mutual funds to launch a startup in an industry where I had no relevant experience (except that I drank beverages), Julie was the first person to support the idea. Even though we had three boys under the age of 6, including a newborn, she knew I had an entrepreneurial itch that needed to be scratched. Julie was all in from day one, and never wavered in her support.
Her instincts helped guide everything -- the taste of the drinks, the look of the brand, and the tone of our label messages. There was no important branding decision that didn't get her approval -- even the quotes under the cap. During Honest Tea's first 10 years, Barry and I had only a few disagreements -- they were almost always around our label messages -- and when those arose, Julie was always the decisive voice, and she never steered us wrong.
So while Julie provided nothing but support for the business, there were more than a few moments where she might have regretted the decision.
Like the time in 1999 when, against Julie's advice, I tried to drive through the night from our bottling plant in Buffalo during a record-setting blizzard in order to make it to a trade show. I ended up flipping the car off the road, breaking hundreds of recently filled bottles of tea. Miraculously, I walked away with a small cut on my finger. But I also received a clear message from Julie that risk-taking with the business was OK but not with my life.
Throughout Honest Tea's first 10 years, the company was perpetually short on cash and so was our family, as I barely paid myself enough to cover our bills. (We had health insurance through Julie's job at a homeless shelter.) No one starved, but by suburban D.C. standards, it was a lean existence. Our boys grew up without cable TV or video games (which turned out to be a good thing). We often had to decide whether to pay the bills for our synagogue or our boys' baseball teams (we ended up paying both, but often several weeks after the due dates).
By 2004, Honest Tea had become the top-selling tea in the natural foods industry, and we started to get to breakeven. Even though it felt like we should be more financially secure, the cash demands became more severe. We had to put our home up as collateral to access our bank's line of credit. The risk of losing our house should have felt stressful except that there were so many other sources of worry.
In March 2008, Coca-Cola's venturing and emerging brands bought 40 percent of Honest Tea, and in the process acquired the right to purchase Honest Tea in 2011. This development helped relieve our family of the financial and personal stress, but Julie's role in keeping it Honest became even more important. There were more than a few occasions where Honest Tea's entrepreneurial approach created friction with the way a larger corporation acts. Within a few months after Coke's first investment, a team in Atlanta developed a new label concept that tested very well in market research. In fact, the label garnered such a positive score that we were told we would need to accept the results and embrace the new design.
I didn't like the label, which had a big chunky "T" on the front, and neither did Julie. It didn't feel right to me, but I might have agreed to go along with the corporate recommendation. Julie, on the other hand, had no doubt that the garish design wasn't right for Honest Tea's simple, clean aesthetic. With her support, I congratulated the team for designing a label that received a good response, and encouraged them to find a different brand to use it on.
Even though there were uncomfortable moments that tested my relationship with the leadership of Coca-Cola, it's safe to say that 10 years since Coke invested, we are happy that we've been able to maintain a fast-growing, mission-driven brand that is ready to expand globally. A few months ago, we launched our Honest Kids organic juice drink nationwide with McDonald's. Last month, I joined with Coca-Cola's Western European team to launch the Honest brand across 40 markets. It was wonderful to see how excited the local team was to bring our just-a-tad-sweet, organic formulations across 40 markets, expanding the brand across multiple categories, including bottled coffee and bottled chocolate.
Barry and I are still close friends, and his name is still on the bottle. He kept his day job as a professor at Yale, and still works in food innovation, co-founding Kombrewcha, a kombucha company, and now Maker Oats, a morning oats concept.
Julie also kept her day job -- pursuing her career in the area of social justice. She never held an official position at Honest Tea, but she still helps me keep it Honest. It's been a wild ride seeing the drinks we made in our kitchen expand to bottling plants around the world. People sometimes ask me if we ever dreamed that Honest Tea would become a global brand, and the fact is we did. We just didn't know that our dream would come true. But it's important to remember that Julie and I were happy before we launched Honest Tea and we are still happy because we had the right ingredients before we put them into a bottle.