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Honest Tea

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This is Duke University.

Duke. The Fuqua School of Business

Case Chats. Exploring Trends in Social Innovation. Case Chats. Exploring Trends in Social Innovation. Seth Goldman Founder and TeaEO, Honest Tea

Presented by CASE Center for the Advancement of Social Entrepreneurship

What is Honest Tea?

Honest Tea is a company I started out in my house 16 years ago. We sell lower-sugar, organic and Fairtrade bottled tea, and we are now distributed nationally in over 100,000 stores, and we call ourselves a mission driven company, because we are really trying to address issues of diet, issues of sustainability and organic agriculture, and labor standards in the developing world.

Impact Measurement

We measure our impact every day by how much tea we’re selling! It sounds kind of crass, but actually it is, you know, the more bottles we sell, the more people we’re reaching. The more people we are reaching, the more demand we are creating for organic ingredients and, in turn, we know that translates into the mission impact, you know, in the tea gardens we source from, and in people’s diets.

On Scaling

When we created Honest Tea, we never had the aspiration to end up as a niche business: we really wanted to democratize organics to be available to people wherever beverages are sold. And while we were happy to see our brand succeed in the natural foods world, we needed to get to more places, and that was why we ended up partnering with the largest beverage company in the world. And so for us, we knew that if the product, in the bottle, had the values embedded in it, by which I mean less sugar, organic and Fairtrade, then our job was, our mission was, to sell as much of it as we could! And for us, the partnership with Coca-Cola has given us that reach and scale, and whereas we were in 15,000 stores before Coke invested, we are now in over 100,000, with obviously greater upside, a world of upside, literally, to expand the reach of it. So for us, it was a clear—at the right point—it was the right step for our expansion.

Impact Investing

Impact investing is really exciting to see how it is emerging. I think part of what makes it more viable is when people can demonstrate you can invest in businesses and be successful. You know, there’s some interesting fragmentation that’s going on, so I have been on the board of the Calvert Foundation for quite a few years, and that is where we’re doing, you know, community-based investing and seeing consistent returns, and nice to see that develop as a viable field, but then there’s also what I would sort of say was equity, you know, I would not call it venture capital, but often more angel investing into mission-driven companies. And as with any early-stage company, there is going to be some great home runs and there is going to be some total strike-outs! So it is really gaining legitimacy as a whole field of investing, and I am excited equally about both, because I see the impact that impact investing can have on the loan side, but also on the equity side.

Advice for Social Entrepreneurs

The first advice I have to give a rising entrepreneur is to read our book, because it really does take them through the process we went through, which was at times quite painful, and to the extent we can help anybody avoid those, some of the lessons, that is a useful thing to do. I think another thing is to try to develop and present a business plan, you know, to go through that process. That’s an intense piece of work to do, and it is by definition a collaborative piece of work, and to understand if you have the appetite for that. Some people do not, and better to learn that early on! I think the other thing that is useful to do is try to get some experience selling. You are always selling, whether it is selling yourself in an interview, or trying to get investors, trying to get employees, and so actually doing, literally selling something, it is almost less important what you are selling, but just to understand if you have the appetite for that.

Trends in Mission Driven Business

One of the most exciting trends I am seeing in mission driven business is more people are coming to it. You know, business school students now understand that you can really pursue a cause and a belief in an idea through a business. And so, I watch organizations like Net Impact really flourishing, and obviously here at Duke there is such a vibrant chapter, because people understand there is not a choice, it is not an either/or, it really can be both. And so to me, that’s the most encouraging thing. And yes, it is nice to see entrepreneurs who create businesses, but it is equally exciting to see mission driven leaders go and penetrate large corporations, and understand that I am coming to a large corporation and I am going to expect to live in a way that is consistent with my values.

Duke The Fuqua School of Business

Video Details

Duration: 4 minutes and 42 seconds
Country: United States
Language: English
Genre: None
Views: 49
Posted by: zetkun on Mar 14, 2015

Case chat

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