Seth emailed Barry to see if his former professor still had an interest in the drink market. Coincidentally, Barry had just returned from India where he had been analyzing the tea industry for a case study. He thought there might be an opportunity to make what he called “honest tea” – bottled tea made from real tea leaves.
Seth started brewing batches of an all-natural tea in his kitchen. Five weeks later he brought the tea and a bottle with a mocked up label to the Fresh Fields supermarket chain, later to become known as Whole Foods Markets. During that meeting, Seth took an order for 15,000 bottles and Honest Tea was officially in business. At the end of the company’s first year, Honest Tea had generated sales of $250,000. Just two years later, with sales nearing $2 million, Honest Tea was the fastest-growing bottled tea brand in natural food stores.
In 2004, all twelve varieties of the brand’s bottled tea, as well as the eight tea bag varieties offered by the company, were certified USDA organic. That made Honest Tea the only tea company to offer an entire line of organic bottles and tea bags. The following year, Honest Tea made a subtle name change to Honest Beverages with the introduction of organic Honest Ade Limeade and Cranberry Lemonade drinks.
Over the next several years, Honest would add numerous other tea and non-tea organic drinks, some of which picked up on emerging trends, such as Pomegranate White Tea with Acai and Sublime Mate, the first Honest yerba mate tea. This year, the company jumped on the Kombucha craze with the launch of five Kombucha flavors. The category, however, was recently pulled from Whole Foods Markets over alcohol concerns, forcing the brand and its competitors to "go back to the drawing board," as BevNet writes.
The New York Times noted in a January 2009 article concerning Barack Obama's then-upcoming presidency that “the [White House] refrigerators are stocked with the president’s favorite organic brew, Honest Tea, in Mr. Obama’s preferred flavors of Black Forest Berry and Green Dragon.”
It’s almost inevitable that a hot, young brand would catch the attention of a much larger competitor. That’s what happened to Honest Tea in 2008, its tenth year in business. While founder and “TeaEO” Seth Goldman had in the past positioned the brand as the anti-soft drink, it was The Coca-Cola Company that bought a 40% interest in Honest Tea that year.
In a blog post written by Goldman earlier this year, he says, almost apologetically:
“All beverage upstarts resent the Establishment because its near-stranglehold on distribution makes it difficult for us to get our drinks to customers,” he writes. “We also tended to mock their so-called ‘innovations”… 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.”
Indeed, there is no indication that Honest Tea’s operations have been subverted by the Coca-Cola investment; on the contrary, it seems as if the world’s leading brand recognizes the brand integrity of Honest Tea, and is happy to let the company operate independently, as it has done previously.
Honest Tea has been honest about its commitment to corporate social responsibility. The company actively supports Fair Trade and works directly with farmers’ cooperatives in under-developed countries. Honest Tea has been aggressive in re-engineering its packaging to be more environmentally responsible as well; for example, it started a unique “Honest Kids PouchPoints Program,” encouraging children to turn in drink pouches for rewards.
Seth Goldman himself has been a model of corporate responsibility. The Honest Tea cofounder helped start “Bethesda Green” in his own community of Bethesda, Maryland, a civic responsibility program that supports the local economy and creates a healthier community. Bethesda Green has engaged in such initiatives as procuring recycling bins for public use, introducing green initiatives with partners, organizing “e-cycling” days, launching a biodiesel fuel research project, and creating local green jobs.
Whether it’s on a local, national, or international level, Honest Tea is a brand that continues to have an impact – honestly.