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  • 04.30.04

Tea for Truth

Seth Goldman is cofounder of Honest Tea and currently serves as the company’s president and TeaEO. His GEL presentation explored some of the basic ideas behind the company, as well as how business can be used as a tool for social change. What follows is a partial transcript of his comments:

Seth Goldman is cofounder of Honest Tea and currently serves as the company’s president and TeaEO. His GEL presentation explored some of the basic ideas behind the company, as well as how business can be used as a tool for social change. What follows is a partial transcript of his comments:

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I was thirsty, and no one was doing anything about it. I used to work in mutual funds, socially responsible mutual funds. I went for a run in Central Park, and I needed a drink. There were the same old sweet drinks, but there was nothing that I was looking for. We were missing the drink in the middle, with just enough taste but not all the junk.

What really clicked was a study my business professor Barry Nalebuff had done of the tea industry in India. He said we could even call it Honest Tea. When you have the opportunity to do something that’s socially responsible, you have an obligation to do that.

So we brewed up some tea and took it to Whole Foods, and the buyer said, OK, we’ll take 15,000 bottles. Now we really had to make the tea. Slotting fees? I couldn’t do that. The business was me and these thermoses. We still got into our first set of stores. We eventually became the best-selling tea in the mid-Atlantic region. Then we became the best-selling tea in the natural foods category. And now we’re in the Inc. 500.

Why did we call it Honest Tea? It is a less sweet drink. There’s a social and health benefit to this. Look at the rise of juvenile diabetes. I try not to sell you as much on the brand as on the business. But there are bottled drinks out there where one bottle exceeds the U.S. RDA for sugar. Our teas are organic. There are no pesticides or herbicides. That’s important because tea is never washed. The first time tea is washed is when you add hot water to your tea. Those are nice benefits. Honest Tea is the first company to have a fair trade bottled tea. Every time we sell a bottle, we have a positive impact.

We also try to create an authentic, honest product. We don’t oversell. We try not to. We try to let people see what’s in the product. We disclose as much as we can. There’s nothing in here you can’t pronounce. We try to sell a product that is what it says it is. That really inspires me and our company, but it isn’t easy.

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When I started six years ago, it was just about this time, and I would walk out with a duffel bag and 80 pounds of tea. That’s how we grew the business. You know how, sometimes, you feel like you can do anything? Sometimes that’s not true. We had this U-Haul, and we were trying to find a parking space in Boston. We got to a parking garage, and I said I thought we could fit. My friend said, “This is a 10-foot truck, and that sign says eight feet.” Sometimes you need to pay attention to that.

You can make change happen. If you want to see change happen, as Gandhi said, be the change you want to see in the world. I had a big meeting last week, and I was talking to the CEO who said he really wanted to pursue a socially responsible agenda. The company, which I can’t name, was 1,000 more powerful than mine, but he didn’t feel like he had the power to do that. I don’t swear, but I just cannot believe that. He was selling himself a line.

When people pay for something, they expect something in return. This is your product, what you do with your life. In life, you don’t get a refund. But you can reformulate and change some of the ingredients. If you want to change the direction the world is heading, change the formula of your life and make it happen.