Honest to goodness

Source: Technology Digital

Date :5/23/2007 10:43:52 AM

The Honest Tea company is branding itself as the healthy beverage alternative, and a good friend to the environment.

Seth Goldman doesn’t like doing things the traditional way. Sure he’s a corporate CEO. And yes, his company has global ambitions.

But as cofounder and head of Honest Tea in Bethesda, Md., Goldman wants to keep his company running like a small hands-on operation, and to stress corporate and environmental responsibility as much as market competitiveness.

“Tea is produced by some of the poorest cultures in the world, but enjoyed by some of the wealthiest,” Goldman says. “Our goal is to develop great tasting teas that can be produced for pennies a bottle” ... and to share a portion of the profits with the tea growers.

Honest Tea is the result of a partnership between Goldman and Barry Nalebuff, a professor at Yale University. The two had become friends in 1998, and Goldman said that when Nalebuff returned from a trip to India that year, he brought with him the germ of an idea to start a new line of teas.

“The idea was for a drink that wasn’t so sweet,” Goldman says, and that launched the effort to come up with a new version of a traditional favorite

What Honest Tea has developed in the nine years since its inception are 18 varieties of ready-to-drink flavored teas, and a line of Honest Ade organic thirst quenchers, all made with less sugar. All of the products are certified organic, and certified as being kosher, made with no genetically modified ingredient, and gluten free.

The result of this commitment is that Honest Tea became the first U.S. bottled tea manufacturer to market a Fair Trade certified product, which is a program that ensures that the workers involved with the original ingredients used in the product’s manufacture receive a share of the purchase price. Honest Tea first marketed the Peach Oola-long juice with this certificate, followed by its Kashmiri Chai and its Just Green Tea and Just Black Tea.

Quite simply, Goldman says his goal is to produce the best tasting, and healthiest beverages in the world, and to take care of his partners, his suppliers and the planet along the way.

While it may take a caring man to make an Honest tea, it obviously takes marketing to make the effort successful. And for this small company, that means strong investment in the company sampling and branding efforts, and a large dose of grass roots word-of-mouth and in-store, specialty store promotions.

“We don’t do a lot of media marketing,” Goldman says of the company’s advertising efforts. “We are more of a guerilla marketer.”

Guerilla marketing can conjure up unintentional images (as evidenced by Boston’s experience this past winter with a movie campaign done in “guerilla” style). But it is a rapidly growing force in branding.

The company’s marketing efforts will be key in the second half of 2007, as it expands into new markets in Massachusetts and Connecticut, and it debuts some new drink varities.

To prepare the ground, as it were, the company does a lot of upfront marketing on its website. New and pending products take center stage on the home page, and they are carefully integrated into the company’s overall branding strategy.

Marketing experts stress that successful branding is not about logos, but about conveying a sense of experience or lifestyle with a product. In the case of Honest Tea, that strategy involves stressing the health benefits of the company’s products; the fun flavors the company offers, and the rare corporate culture of environmental and social care.

Goldman is one of the breed of corporate executives that believes his company has an obligation to produce the healthiest product it can, at the most affordable price possible, to the benefit of both consumers and his original suppliers, and in a manner that respects the environment. That is why he invests in the local communities where he buys tea from — including at the sources in India (where the company buys its green tea) and China (where it buys its black tea).

Goldman says the company tries to look after its employees, and to create an environment in which they have a fun and rewarding place to work.

Currently, Honest Tea has 45 employees. The culture is very casual, with an open office environment, Goldman says. “We have no cubicles, and no closed rooms,” he stresses. What the company does have is “lots of communication.”

Staffing at the company is aided by the corporate culture, and by the idea that employees are producing a healthy product. The rapid pace of success isn’t hurting recruiting or retention efforts either.

So far, the company’s marketing efforts and business strategy are paying off nicely. The company is enjoying a near-doubling of sales and employee growth in just over one year.

“We have hired a lot of new people, and are in the process of identifying additional bottling plants,” Goldman says.

Those new assets will be sorely needed, if trends continue for the company. Not only are consumers coming around to the company’s product line, they are also shunning the juice industry’s biggest competitor in larger number — soft drinks.

“People are moving away from carbonated beverages,” Goldman says. “The proof is in the fact that the carbonated beverage industry had been declining for the few years.”