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Seth's Blog

From CSRWire: How Do You Measure the Bottom Line for Impact Investing?

Thursday, April 17th, 2014

Since 1993, when I was at the Yale School of Management, to my work with the Calvert Funds and Foundation and now with my company Honest Tea, I’ve been a part of hundreds of discussions and debates about how to evaluate the return on an impact investment.

Centuries of academic work and millions of billable hours have been dedicated to refining the metrics of financial investments so that investors have a clear picture of their return. But those of us in the social investment space continue to navigate in far murkier waters.

The bottom line is that the bottom line for impact investing is harder to understand.

Click here for the full article.

What Angel Investors Look For In a Natural Foods Company — PLUS Seth Goldman’s Bonus Criteria

Tuesday, March 4th, 2014

A lot of the time in the CPG space, the earliest investors you line up will themselves be successful entrepreneurs who recognize the potential for your product. But do you ever wonder how those experienced food and beverage entrepreneurs think about what companies to invest in themselves? Seth Goldman, the Co-founder & TeaEO of Honest Tea, has invested in several startup food and beverage companies over the years — and shared this piece with our Food & Beverage University site, just in time for Natural Products Expo West 2014.

Click here for the full article.

What raising my son and growing my business have had in common

Thursday, January 30th, 2014

People often ask me what it’s like to lead our entrepreneurial, mission-driven company within a larger corporation. In the week just before winter vacation, my youngest son’s physics class presented me with the perfect analogy.

Read the full article here.

Secret to Becoming a Resilient Entrepreneur

Monday, March 11th, 2013

Lately, there have been questions raised about the merits of wrestling as a sport both on the collegiate and international level. While several prominent ex-wrestlers, such as Vladimir Putin and former Secretary of Defense Donald Rumsfeld, have risen to wrestling’s defense, I’d like to add the voice of an underrepresented constituency–the poor-to-mediocre high school wrestler. In fact, I owe much of my success in business to the failure and adversity I endured as a high school wrestler.

In case anyone challenges my credentials as a bad wrestler, I humbly share that my record in my first season was 1-10, (there was a vacancy in one opposing team’s line-up, so I “won” the forfeit). Today as I lead a company generating more than $100 million in retail sales, I still rely on the lessons I learned fighting off my back.

To read further, click HERE

Honest Fizz: Organic vs. Affordable

Wednesday, January 16th, 2013

How do you make the right decision when your new business idea doesn’t align perfectly with your current mission? A recent experience at Honest Tea helped me realize there are two questions you have to ask yourself.

At Honest Tea we were faced with these questions with our newest product, Honest Fizz (a line of naturally-sweetened zero-calorie sodas). It came from the realization that for the first time since 2004, we would be launching a product that would not carry the USDA Organic seal.

Before we made the decision to jump back into the non-organic beverage waters, we asked ourselves two questions that are valuable for every entrepreneur exploring divergent growth opportunities:

To read further, click HERE.

How to Thrive (at a Big Company) After Acquisition

Wednesday, January 2nd, 2013

It’s been almost five years since The Coca-Cola Company first invested in Honest Tea, and nearly two years since Coke purchased the remaining portion of Honest Tea. With a new year and the publication of our third annual mission report, Keeping It Honest 2012, it’s the perfect time to make some observations about what makes the relationship work.

First of all from a business perspective, the impact of the Coca-Cola partnership has been dramatic. Our sales have grown more than fourfold as Honest Tea has expanded its availability from 15,000 stores and restaurants in 2008 to more than 100,000 outlets today.

But beyond the basic business metrics, there are a few guiding principles that help ensure our mission-driven business is thriving within the larger corporation.

Click here to read on

All in the Family

Monday, August 27th, 2012

Occasionally we receive inquiries when our parent company, Coca-Cola, supports an effort or an organization that Honest Tea hasn’t historically supported.  These situations raise interesting questions and opportunities for reflection.

I have an older brother who votes Republican.  He served in the U.S. Army for 25 years, is active in his community, gives generously to charities, and is a father of four wonderful children.  Since I’m a lifelong Democrat, my brother and I fundamentally disagree on a wide variety of political issues, but there’s no one I trust more to advise me on finances and our families spend every major holiday together (where there’s always at least one lively conversation about politics). 

Honest Tea has been a part of The Coca-Cola Company for the past 15 months, ever since the mission-driven enterprise I started out of my house in 1998 was acquired by the world’s largest beverage company.  Distribution of our lightly-sweetened, organic and Fair Trade certified teas has expanded dramatically since the transaction – in 2008 when Coke invested in Honest Tea, we were in 15,000 accounts.  Today our products can be found in over 100,000 accounts.

As the first company to launch a certified organic bottled tea, Honest Tea has had a longstanding commitment to simple, GMO-free ingredients.  In fact, recently we’ve been a little frustrated with requests to certify that our products are GMO-free, because the USDA Organic seal certifies that our beverages have met the USDA’s rigorous standards, including the use of ingredients that are non-GMO and grown without the use of synthetic pesticides.

We’ve also had a longstanding commitment to transparency that is as strong today as when we began: 

·         We were among the first companies to display total calories per bottle (instead of just per 8 ounce serving) as well as among the first to display the calories on the front of our package, as part of the Clear on Calories initiative. 

·         We’re about to issue our third annual Mission Report which discloses and evaluates our efforts and shortcomings toward achieving our mission of democratizing organics, extending economic opportunity to communities in need, and expanding the reach of lightly-sweetened beverages.  Unlike many corporate social responsibility updates, our Mission Report is not a cheerleading document, but rather a thoughtful analysis that shares our shortcomings and challenges on everything from our carbon footprint to supplier community partnerships. 

·         And we certainly have tried to be transparent about the fact that we’re owned by Coca-Cola, and the inevitable challenges that arise when a mission-driven group of entrepreneurs works alongside a 126-year old multinational corporation.

There are bound to be moments when our enterprise does not share all of the same ideas as our parent company.   But there’s never been any pressure to compromise Honest Tea’s products, our ingredients, or our commitment to our mission.  Some may recall that we had a lively conversation with Coca-Cola back in 2010 when we received a request to remove the “no high fructose corn syrup!” language from our Honest Kids package.  We declined the request, and Coke accepted our decision.  As a member of the Coca-Cola family, Honest Tea is a voice for our approach to organic agriculture, Fair Trade and health and wellness – as evidenced by remarks I gave on trust and transparency earlier this month at Coke’s international meeting of its senior leadership and largest customers. 

Does the analogy of family members coexisting despite a diversity of viewpoints extend to a large corporation?  In many ways it does.  I’ve learned a lot from my brother over the years, from soccer to wrestling to tax preparation.  And I’d like to think that a few of my beliefs have rubbed off on him. 

Mayor Bloomberg and Our 16.9-Ounce Tea

Sunday, July 22nd, 2012

 As seen on Wall Street Journal

As a fellow entrepreneur with a public-service orientation, I have been a longtime admirer of Mayor Michael Bloomberg’s entrepreneurial spirit and commitment to acting on his principles. Having launched Honest Tea 14 years ago with five thermoses and a belief that consumers were thirsty for a lower-calorie natural and organic beverage, I appreciate all he has accomplished. However, I write today as an entrepreneur frustrated by a proposal that arbitrarily complicates the practical realities of commerce.

When the mayor announced his proposal to ban sugar-sweetened drinks in portions over 16 ounces from New York City restaurants, many of my friends assumed Honest Tea would welcome the news as a public initiative to complement Honest Tea’s long-standing commitment to marketing lower-calorie drinks. Yet the mayor’s proposal would actually prevent Honest Tea from selling most of our drinks in New York City restaurants.

Under the proposed changes to Article 81 of the NYC Health Code, food-service establishments would not be able to sell packages larger than 16 ounces for drinks that have more than 25 calories per eight-ounce serving. Honest Tea’s top-selling item is our organic Honey Green Tea, which has 35 calories per eight-ounce serving and is in a 16.9 oz. bottle. We label 70 calories on the front of the package so consumers know what’s in the full bottle.

We initially went with 16.9 oz. (which is 500 milliliters) because it is a standard size that our bottle supplier had in stock at the time. We subsequently invested several hundred thousand dollars for 16.9 oz. bottle molds. Is 16.9 ounces the perfect size? Who knows? As a beverage marketer, we willingly submit to the unforgiving judgment of the market. What we did not anticipate was an arbitrary decision to constrain consumer choice.
One response we considered was putting 0.9 ounce less liquid in our bottles, but that would create a separate set of complications. We fill our bottles to the brim—not just because we like to deliver an “Honest” value, but also to ensure quality since we do not use preservatives. Then there is the costly prospect of having to change all of our UPC codes (those complicated black bars found on every product on a grocery shelf) because we would be offering a different liquid volume—all for 0.9 ounces!

And what if next year, Cambridge, Mass., comes up with a ban on 15.5-ounce containers? As soon as government starts getting between us and the consumer, we quickly find ourselves considering scenarios that are not based on market realities or consumer needs.

I challenge the mayor and the New York City Board of Health to seriously consider the impediments that entrepreneurs already face in our efforts to offer lower-calorie drinks. Starting a business and building a challenger brand with modest resources is already a daunting task. The proposed ban would create additional barriers to beverage innovation.

One of my favorite Honest Tea bottle-cap quotes is the Chinese proverb “If we don’t change the direction in which we are headed, we will end up where we are going.” Given that the life expectancy of our children’s generation is lower than ours, there’s no question our nation’s health indicators are headed in the wrong direction.

But the mayor’s proposal will not move us in the right direction. The obesity problem was not caused by one industry alone, and targeting one industry is not the solution. Working together on a multifaceted approach is.

What I Told Congress

Thursday, July 5th, 2012

As seen on INC.

Last week I put on a tie for the first time in a very long time. The occasion was the opportunity to testify on Entrepreneurship and Job Growth before the House Small Business Committee. As you can imagine, this is a topic I’m quite passionate about. Here are a few highlights from my remarks: Good Afternoon. Whenever there’s a discussion of fast-growth businesses, the focus is usually on the internet, computer and biotech businesses. So I’m happy to represent a fast-growing part of our economy that is a little more traditional, by which I mean everyone can understand what we do. My company Honest Tea, makes and markets lower-sugar, organic beverages. Our fourteen years of continuous double-digit growth have helped create 112 jobs in 22 states–jobs that create and support manufacturing jobs across the United States, and just as important, jobs that cannot be outsourced overseas.

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I Love You, You’re Fired

Thursday, July 5th, 2012

 As seen on INC.

Aside from firing an employee, firing a product is the worst part of my job. And yet at this time of year, we face our annual cycle of terminating underperforming varieties. This month’s victims are, brace yourself, our beloved Pearfect White and Sublime Mate.Our whole product development cycle isn’t that different from planting a tree:

1. Before we plant any ideas (let’s call those seeds), we make sure they’ll be able to thrive in our ecosystem. You can’t plant a tea bush in Maryland (I’ve tried) and we won’t explore a beverage that can’t be certified organic. We also have to make sure that the drinks can taste great without a lot of additional sweetening. And finally, if it’s a tea, we need to make sure there is a Fair Trade certified supplier

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