Bringing Honest Tea, his organic beverage company, under the Coca-Cola Company umbrella has had its complications, Seth Goldman ’95 told a Yale School of Management audience. This fall, for example, Honest Tea received thousands of emails threatening a boycott because Coke, its parent company, opposed a Washington state bill requiring GMO ingredient labeling. But being part of the larger company, he said, is bringing him closer to his ultimate goal of getting more consumers to make healthy food choices.
Goldman spoke on October 31 as part of Yale SOM’s Colloquium on Business and Society, in a conversation moderated by Barry Nalebuff, his Honest Tea co-founder and the Milton Steinbach Professor of Management. Nalebuff and Goldman, his former student, launched Honest Tea together in 1998. Coca-Cola purchased the brand in 2011, but Goldman and his team continue to manage the company out of their office in Bethesda, Maryland.
“Our society isn’t going to get there without large companies involved,” Goldman said. “It’s really [up to] entrepreneurs” to change the marketplace, Goldman said. “And when they succeed, big corporations will follow.”
This has always been about the mission. It’s never been about a pay day.
Goldman said that Coke’s vast distribution network is getting Honest Tea into many more hands, which is having a healthy impact on the larger market. Since Honest Kids, the company’s children’s drink, debuted with 40 calories per serving—the market standard is 100—competing brands have dropped their caloric totals to 70, Goldman said: “It’s helped all kids.”
Goldman and Nalebuff recently published a graphic book titled Mission in a Bottle: The Honest Guide to Doing Business Differently—and Succeeding. The book tells the story of how the two built Honest Tea, sharing their business insights and observations in cartoon form.
Since the success of Honest Tea, Goldman has gone on to invest in other mission-driven enterprises, among them the Happy Baby organic baby food company and the True Soap Company, a line of natural, handmade, and vegan soaps. “His track record as an investor is perhaps even better” than his record as an entrepreneur, Nalebuff said.
When choosing investments, Goldman said he looks for an entrepreneur “who’s on fire, just literally so passionate they could run through a wall.” The CEOs of the companies he invests in, Goldman said, should also be “coachable” partners who can take advice and grow with the company. Products must be something new, an innovation or fresh take, that offers a change in or addition to the market, he said.
Goldman said he intends to stay at the helm of Honest Tea, growing the company and improving the American diet. His next step is expanding the line into restaurant chains. “This is work I care about,” Goldman said. “This has always been about the mission. It’s never been about a pay day.”