Many successful ventures eventually face a critical decision: should they partner with an established company to achieve greater scale, and if they do, will that partnership negatively influence the future of the venture? It’s something that Seth Goldman ’95 had to consider when Coca-Cola approached him about acquiring Honest Tea, the company that he cofounded with Barry Nalebuff, Yale SOM’s Milton Steinbach Professor of Management.
“There are those who say you can’t take a mission-driven business and put it in a large corporation because you kill what’s special about it,” but that doesn’t have to be the case, Goldman told students at Yale School of Management during a Colloquium on Business and Society on April 6. In fact, Goldman said that Coca-Cola’s 2011 acquisition of Honest Tea actually accelerated Honest Tea’s mission to promote health, environmental sustainability, and social justice.
“That was a real inflection point for our mission,” said Goldman. “We started to develop more buying power, and our buying power allowed us to identify opportunities where we could make enhancements to our product.” These included the move to using only fair-trade teas in Honest Tea products in 2011, and fair-trade sugar in 2013.
Goldman said what has guided Honest Tea both before and after the acquisition is a cycle of “mission-driven innovation.”
“We always think about our growth and our innovation and our mission all at the same time. We never innovate just to innovate, and we never think about our mission as its own entity; they all have to be interwoven,” he said.
This commitment to core principles is critical to success in both the social impact and entrepreneurial space—and particularly in the space where these sectors overlap.
“If you can create products or a business that help people live better, healthier, more fulfilling lives, you can make an incredible impact, but you can also create an incredible business if you create it the right way,” he said. “Think about yourself as your own brand. Will you do what you believe in all the time, or will you compromise on occasion to get an opportunity or close a deal? Brands are promises; brands are expectations. You have to decide what brand you are and how to fulfill that promise.”
Goldman now divides his time between Honest Tea and other projects, serving as TeaEO emeritus at Honest Tea, as innovation catalyst for Coca-Cola North America’s Venturing and Emerging Brands unit, and as executive chairman at a new venture, Beyond Meat, which aims to bring to market plant-based proteins that deliver the same sensory experience as animal proteins.
About the Event
The Yale SOM community is invited for a conversation with Seth Goldman ’95, co-founder of Honest Tea on April 6. Seth will share his journey from Yale SOM to founding a socially conscious business and his recent transition to Beyond Meat. This event is organized in partnership with Net Impact and the Yale SOM Office of Development and Alumni Relations, and it is co-sponsored by Social Impact Lab, Food and Wine Club, Entrepreneurship Club, and the Program on Social Enterprise.