Honest Tea: A Marketing 50 Case Study
By Natalie Zmuda
A loyal fan base has supported Honest Tea since the bottled beverages were launched in 1998, but it wasn't until this year that the brand emerged as a major player in the category.
In February, Honest Tea celebrated its 10th anniversary as Coca-Cola Co. took a 40% stake in the brand. That investment has enabled Honest Tea to add personnel and ramp up its grass-roots-marketing efforts, which primarily consist of sponsorships, street teams and sampling.
But 32-year-old Jesse Merrill, the brand's director of marketing, says despite the new investment, the company's core philosophies are intact.
"Where we've been most successful is creating that memorable connection with our consumers through those guerrilla, grass-roots efforts," he says. "I don't think we'll ever be that company that runs a few TV or radio ads. We'll always have feet on the street."
Even though Honest Tea's marketing is far from mainstream, its consumer base is moving in that direction. The brand is now distributed through Coca-Cola's system, meaning it can be found at retail outlets as varied as Kmart and Whole Foods. Though Honest Tea sales totaled only $6.6 million this year as of Oct. 5, according to Information Resources Inc., that represents a 34.6% increase from a year ago.
Honest Tea is also resonating with a broad demographic, including 18- to 24-year-olds, Mr. Merrill says, thanks to partnerships with the Washington Nationals baseball team and musician John Mayer, among others. Honest Tea expects sales to nearly double this year.