Home » BrandInnovator 2010 > Seth Goldman, Honest Tea
A brand name like Honest Tea requires a high level of transparency. And Seth Goldman, president and TeaEO of the company, designed the brand so it offers consumers just that.
Consider Honest Tea’s introduction of a new PET bottle last year. In an effort to be more sustainable, the brand was transitioning from a heavier, thicker plastic bottle to a 22 percent lighter PET bottle. In doing so, the new bottle had to become slightly taller, the result of a dome in its bottom that was needed to maintain pressure inside because of the thinner outer walls. But the only thing some consumers noticed was more air space.
“Initially, despite the fact that our consumers are loyal and think of us as honest,” Goldman explains, “they thought we were trying to cheat them by selling more air to them.”
The company quickly jumped to resolve the concern, adding a graphic to the label-making it look as if someone had taped a yellow note to each package-stating the reasons why the bottle has changed and its benefits to consumers and the company.
With the tough economic climate spurring many brands to lightweight their products (include less product in a package and charge the same price), it’s easy to understand consumers’ initial skepticism. For Goldman, this was an important learning experience.
“Just because you’re doing the right thing environmentally, doesn’t mean your consumer gets that,” he says. “So what you may think is a win-win, unless you really explain to the consumer what it is and why you’re doing it, even for a brand like ours, there [may be distrust].”
In Honest Tea’s case, once the brand reached out to its consumers through its packaging and website regarding the new look, they understood and returned to the brand again, loyal as ever.
Epitomizing transparency, Honest Tea used a note graphic to explain the eco-benefits of a new PET bottle that appeared to hold less product.
When the company first decided to develop a plastic line in 2003 (the company’s original Honest Tea line is bottled in glass), the panelless bottles he was looking to use were much less common than they are today; Goldman believed that a panelless plastic bottle would reflect the premium nature of the teas inside.
However, ribbed, plastic bottles with expansion panels were more the norm for hot fill beverages like Honest Tea. Goldman insisted that panelless plastic bottles were the way to go and worked with Graham Packaging to develop a package that would best portray the story behind the tea.
But as the saying goes, it’s easier said than done.
“We had a lot of production challenges; we had formulation challenges; we had ovalization of the bottle on the shelf; we had some challenges with the clarity of the package,” Goldman explains. “So it was innovative, but it was definitely bleeding edge for us. We lost a lot of money on the initial effort.”
Goldman temporarily turned to a new supplier that created a heavier, but panelless PET bottle, and Honest Tea used this bottle for the next few years. But, for Goldman, it just wasn’t right. He teamed up with Graham Packaging again and worked to finish what they started.
The end result is a 22 percent lighter PET bottle (panelless of course) that is projected to reduce annual resin consumption by more than one million pounds this year. The significance of the effort, both in time and money, to develop the bottle is that it’s a reflection of Goldman’s commitment to sustainability.
“We would never roll out a package without considering the environmental impact,” says Jesse Merrill, director of marketing for Honest Tea. “That’s something [Goldman is] extremely mindful of and something that will always drive our packaging and design choices.”
Putting its waste to good use, Honest Tea teamed up with TerraCycle to upcycle its Honest Kids pouches into bags.
In fact, in 2007 Honest Tea teamed up with TerraCycle to upcycle its Honest Kids pouches into useful items. Because although the flexible drink pouches are efficient, they’re not recyclable. This way, kids can collect their used pouches and send them in to TerraCycle to be repurposed.
Goldman served on the boards of Pennsylvania Certified Organic, Environmental Leadership Program, Happy Baby and Net Impact. And most recently, he joined the American Beverage Association board. In 2008, Goldman also co-founded Bethesda Green, a local sustainability initiative in Honest Tea’s hometown of Bethesda, Md. Volunteers for the group hold seminars and other activities to support sustainability, along with installing recycling bins throughout the city, working with restaurants to convert their grease into biodiesel, and instituting e-cycling days to collect old electronics from residents.
With such dedicated focus to design, honesty and sustainability, it’s no wonder that Honest Tea has an annual compound growth rate of more than 60 percent over the past 10 years. And, to think, it all started because Goldman and his business school professor Barry Nalebuff were looking for the perfect balance of sweetness in their tea-“just a tad sweet,” as they would say. The founders made their first batches of tea in Goldman’s home after launching the company in 1998, and sold them to 17 Whole Foods stores in the Mid-Atlantic region.
Today, Honest Tea beverages are in 40,000 to 50,000 stores throughout the country and the brand’s plastic bottles just launched in all U.S. CVS stores, a move that Goldman says brings organic drinks into the mainstream.
The brand’s glass line has also held the best-selling bottled tea spot in the natural foods industry for several years in a row, Goldman says. Plus, taking on Coca-Cola as a minority investor in 2007 was a significant step in the company’s growth, allowing it to gain a wider distribution and footprint-and further its sustainability goals, too.
“Coca-Cola has this incredible depth of knowledge as well as resources with respect to innovations around packaging,” Goldman says. Its recent innovation, the PlantBottle, and the company’s use of recycled materials have inspired Goldman to set high environmental goals for Honest Tea in the future. There isn’t a launch date in place yet, but Goldman says he is committed to increasing the recycled content in the brand’s plastic bottles and, even, to start using some of the plant-based material Coke has developed in the packaging as well.
From the beginning, Goldman realized that, if Honest Tea was going to succeed, it would need to rely on packaging and taste; especially early on, when advertising and marketing resources were nonexistent. By maintaining a consistent, simple and authentic package design, Goldman says the brand was able to communicate its values clearly to consumers.
“Our packaging has always been about the first impression for our brand,” he says. “Even in the very beginning, we made huge sacrifices to bring to market the package we wanted to bring.”
And in the end, all the attention to detail has paid off. Although challenges have placed Goldman on the bleeding edge of innovation at times, his determination, creativity and commitment to sustainability have left him on the leading edge. Honestly. BP
NAME: Seth Goldman TITLE: president and TeaEO
YEARS IN CURRENT JOB: 12
BEST ADVICE YOU EVER RECEIVED? Jeff Schwartz, the president and CEO of Timberland, the footwear and apparel company, counseled me to “Build a business as if you will own it forever,” so that you’re really focused on building something you can be proud of and that has enduring value and stands for something.
WHAT BRANDS DO YOU ADMIRE? Stonyfield and Timberland. I love what Muhtar Kent, the CEO of Coke said, “A good brand is a promise. A great brand is a promise delivered.” I think certainly Timberland and Stonyfield meet that definition.
WHAT’S ON YOUR NIGHTSTAND?Atlas Shrugged by Ayn Rand.
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