The Tea Party is Just Getting Started: An Honest Reflection

In a late night decision in 1993 I chose to go to business school because I wanted to help lead the emerging national service movement. I wanted to gain skills that would enable me to practice the Jewish values of Tzedakah – righteousness, not just in commerce but toward the earth as well.

Though I never could have imagined myself as president (let alone a TeaEO) of a company whose largest investor is Coca-Cola, I am excited to see the impact our homegrown enterprise, based in Bethesda, MD, is starting to have on the environment and on health trends in the United States. And I am even more excited as I see the growth we will have as an agent of change in the coming years.

When my co-founder Barry Nalebuff and I started Honest Tea out of my house in 1998, our beginnings were modest but our vision was bold. We wanted to create a delicious, healthier drink with a consciousness about the way the ingredients are grown.

We always knew the enterprise would be about more than moving cases. We wanted “Honest” to stand for a different way of doing business – a brand that is what it says it is, that strives for authenticity in the way it treats its customers and stakeholders. Tea is consumed by some of the world’s wealthiest populations, yet it is produced by some of the poorest, automatically giving us the chance to create economic opportunity in communities where it was lacking.

In the Torah there is a phrase in Deuteronomy that reads:

“Justice, justice shall you pursue…”

I know there are many interpretations of why the word justice is repeated, but the one that appeals to me the most is that while justice is clearly something what we should pursue, it’s also a way of being — how we pursue justice counts. So if we were Honest Cigarettes and we sold to RJR Reynolds for a billion dollars and gave all the money to charity, we have pursued righteousness in one sense but betrayed our faith in another because we would be marketing a product that, when used as directed, kills people.

So at Honest Tea it is important that we seek to express our values not with our profits (which are still quite modest) but with every bottle we sell.

First, we make a product that is healthier – with less than half the calories of most beverages on the market. Second, everything we sell is certified organic by the USDA, helping prevent the use of millions of pounds of chemical fertilizers, pesticides and synthetic ingredients. And finally, many of our varieties are Fair Trade certified ensuring that the people picking our tea leaves are able to invest a portion of our sales into their own community projects.

And of course, it’s been personally satisfying to make a product line that is entirely OU certified – not just so all my family members can enjoy it, but because the OU symbol is another way to guarantee that Honest Tea holds its suppliers to the highest standards.

While many companies may use focus groups and have elaborate laboratories to develop new products, Honest Tea has often developed ideas received directly from consumers. Other times, these inspiring thoughts have originated even closer to home. A couple of years ago I was packing lunch for my middle son, Elie, when he asked me, “Hey, Dad, how come you sell healthy beverages to adults but you put those sugary drinks in my lunch?” As I read the ingredient panel on the pouch drink I was holding, I was shocked to realize that it contained more calories than a can of soda!” Within a year we launched Honest Kids, and I asked Elie, along with Barry’s daughter Zoe, to write the message on the side of the box. We launched the line in the middle of 2007 and we sold twice as much as we thought we would.

But when we learned that drink pouches weren’t recyclable, we partnered with a company called TerraCycle to create the Drink Pouch Brigade™. This program allows schools, houses of worship, and others to reuse these previously non-recyclable items. To date, more than 600 schools and other community groups are already collecting drink pouches as part of the program and have collected over 60,000 pouches in only a few months. The pouches are being made into school supplies such as pencil cases, as well as handbags of various sizes and styles, which will be sold nationwide in 2008.

Keeping an Honest Vision as We Grow

In early February, as we celebrated our tenth anniversary, we also announced that the Coca-Cola Company had acquired a 40 percent stake in Honest Tea. While Coke is now our largest shareholder, the agreement was negotiated to ensure that Honest Tea will continue to operate as an independent business with the same leadership, mission, and board control for at least the next three years.

When we buy 2.5 million pounds of organic ingredients, as we did in 2007, we help create demand for a more sustainable system of agriculture, one that doesn’t rely on chemical pesticides and fertilizers. But when we buy ten times that amount, we help create a market that multiplies far beyond our own purchases. When we sell 32 million bottles and drink pouches with less than half the calories of mainstream alternatives, as we did in 2007, we help displace 2.4 million empty calories. That’s important, but when we sell ten times that number, we help lead a national shift toward healthier diets.

Ten years after starting Honest Tea, we can be proud of many things:

We were the first company to introduce a certified organic bottled tea and the first to introduce a certified Fair Trade bottled tea; we have won awards and top rankings from national consumer publications and organizations for creating great-tasting, healthier products; we continue to be on the leading edge of innovation in terms of new ingredients, packaging and packaging re-use; we have assembled a team of 60-plus wonderful people, winning awards for our employee-friendly practices, sharing stock options and bikes with them; and we have become a leader in our local community, launching the Bethesda Green initiative to develop a model sustainable business community.

Yet the best reward has been the support and loyalty of customers who care as much about what we’re doing as we do. As we enter a new phase of our business, I hope that our consumers will help keep us Honest as we try to balance the challenge of building a sustainable enterprise in a consumer economy. I encourage people daily to contact us either by emailing us with suggestions or feedback, especially if they see us backing away from our commitment to organics, healthier products and sustainability.