What the founder and CEO of Honest Tea thinks about being partners with Coca-Cola, how socially responsible investing has influenced his company, and how he got into a battle rap with Stoneyfield CEO Gary Hirshberg.
Seth Goldman is the cofounder and CEO (he prefers TeaEO) of Honest Tea, one of the fastest growing brands in the organic sphere and makers of a delightfully under-sweetened line of teas and beverages. In 1998, Goldman left his position as vice president of the Calvert Group, a respected financial firm specializing in socially responsible investing, and struck out with a few partners to start Honest Tea. His first order was for 15,000 bottles; just a few years later, they were selling millions of dollars worth.
In 2008, The Coca-Cola Company bought 40 percent of Honest Tea, bringing both the expanded resources a company that size brings as well as extra scrutiny by those worried about a dilution in the smaller company's social mission. Their sales for 2009 were a remarkable $47 million.
Goldman grew up in Massachusetts and graduated from Harvard University before spending time working in China and the former Soviet Union. He grabbed another degree from the Yale School of Management and serves on the boards of Net Impact, Pennsylvania Certified Organic and Bethesda Green.
I was connected to Goldman after he dropped a battle rap response to Stoneyfield CEO Gary Hirshberg's organic food rap video. I interviewed Hirshberg for a profile and wanted to make sure to get both sides of this epic standoff.
Here's Hirshberg's original video:
Here's Goldman's response:
Fierce! Honest Tea and Stonyfield are having a user-submitted video contest and are giving away a month's supply of product to the winner. Swing over to JustDrinkOrganic.com for more info.
Here are seven questions answered by Seth Goldman.
MNN: How did the idea of battle rapping Gary Hirshberg happen? What's the story there?
Seth Goldman: Despite the disbelief of my three sons, I actually was in a rap group in college, (the Educated Devastators, Harvard '87), so when I saw Gary's rap, I knew that we could put together a very different kind of rap that could also help generate awareness about the importance of organics. I have been continually disappointed to see market research that shows consumers still don't understand what the term "organic" means, so anything we can do to help them appreciate why organics matter is worth doing, up to and including embarrassing ourselves.
How has your background in socially responsible investing affected how you started and run Honest Tea?
It means that we started the company with a clear mission in mind, and have let that mission drive our decision-making. It has also meant that I started with an understanding of the conscious consumer, including what issues and what messages would resonate with that consumer.
What are some of the challenges of having Coca-Cola as a major stockholder? What are some of the benefits?
The challenges are that Coke's decision-making processes are slower — they don't mobilize as quickly as we do. But the benefits of greatly expanding our distribution and access to Coke's resources, such as their technology for a recyclable bottle made out of plant material, certainly outweigh the disadvantages. When we first started working with Coke, we were in 15,000 accounts around the country. Today we are well on our way to being in 100,000 — that means more reach and impact for our mission.
What's the difference between green and greener?
In business, I don't know if you ever reach green — except maybe when you die and you become fertilizer (unless you're buried in a non-biodegradable coffin). I think we're all on a journey to greener, and we can't let green be the enemy of greener.
Does the world need saving?
Absolutely, and last time I checked, there wasn't anyone who has volunteered to do it for us. As my son's wrestling T-shirt says, "It's on you."
Who is one person doing good in the world (besides yourself) who we should know about and why?
I actually think my oldest son is doing some interesting things. He led an initiative at his high school to stop his classmates from using polystyrene trays at lunch. He made a video about a superhero/vigilante who stops kids from using trays, (the Tray Monger). The principal supported his efforts and he widened the campaign to all the high schools in Montgomery County, Maryland. The video is titled "The Tray Monger."
(I invited Seth to come up with and answer his own question here) How come you didn't became a professional rapper back in 1987?
My roommates and I (Juice Master Zeus, DJ Cold Cut and Dr. Spud) had a lot of fun making music and performing on campus, but we didn't have any meaningful message to get out back then. Over the 13 years that I've built Honest Tea, I've gotten more engaged in environmental and health causes, and I've also gained more confidence in my role as someone who needs to speak out (or rap out) when I see something that needs to be addressed. Making "Rethink what you Drink" was some of the most fun we've had since we started the company.
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