Seth Goldman, 50, is co-founder of Honest Tea, an organic beverage company headquartered in Bethesda since 1998. Honest Tea continues to be run as an independent business unit of Coca-Cola since its purchase in 2011. He lives in Bethesda.
What made you decide to start an organic tea company, of all things?
I’d lived in China and in Russia and had an inclination to drink tea, but bottled tea I just couldn’t stomach. At the time, 100 calories was standard for eight ounces — that’s six teaspoons of sugar. Nobody drinks that when they have a cup of tea, so why would they put it in bottled tea?
You were in [Yale] business school when the idea came to you?
We were doing a case study of the beverage industry in [Professor] Barry Nalebuff’s class. Barry asked the class, “Is there anything missing in the beverage aisle?” Having been a runner, my hand went up right away. I said, “There’s nothing I’m thirsty for after a run” — something without a lot of sugar. Barry and I were on the same wavelength. He was like, “Let’s make some samples; let’s do focus groups.”
Really? Out of just one class discussion?
It was something we shared a passion around — but I was like, I’ve got to find a job. But after a few years, I said to Barry, “I’m ready to do this!” That was October 1997. I resigned from my job in December, launched Honest Tea in February ’98, and we were in the market by the end of May.
Wow, that’s quick!
Yeah, it’s funny, my staff still teases me ’cause I always try to put pressure to do things quickly. There’s a great quote by Leonard Bernstein — I’m not going to get it exactly right –that genius requires an idea and not quite enough time. It’s great to have that pressure.
I hear you on the writing front. Without deadlines, I’d tinker forever trying to make it perfect.
Right! We did not let the perfect be the enemy of the good. Especially in the beginning, because the product we made 18 years ago was, well, drinkable. [Laughs.] But nowhere near the quality it is now. We’d have an inch and a half of tea-leaf sediment at the bottom; people would say, “Am I supposed to eat that?”
Oh no! Did you ever question your decision to do this?
I never wavered in my belief that this was worth doing. But I certainly had moments of great angst. I remember having a piece of pizza at a family picnic and finding something crunchy in my mouth: My tooth had cracked. So I went to the dentist and she said, “You’re grinding your teeth. Are you under any stress?” [Laughs.] So yeah, there was no shortage of stress. I felt very alive; I still feel that way. There were days I felt like I sold every bottle – not just every case, but every bottle. And probably knew who bought it, too! I’d daydream: Maybe someday we’ll be able to sell in mainstream restaurants. And that’s what’s happening now. Obviously, getting to work with Coca-Cola has helped us scale up dramatically. We’ve launched Honest Tea and Honest Kids at Wendy’s. Honest Kids is at Chick-fil-A. I don’t know anybody who goes to those restaurants thinking: I want something organic. These are just people looking for hydration or energy or nutrition, and they’re being exposed to these organic products. And then all of a sudden it becomes a part of their diet, and when you think about the ramifications for the rest of their diet, it is really profound. I really am an activist in an entrepreneur’s body.
So what’s the Holy Grail for you?
Oh, we’re pretty ambitious. The goal never was to just sell healthy food to healthy people. There’s a handful of billion-dollar beverage brands out there, and we want to be one of them. But I wouldn’t define it just as dollar signs. Everyone’s on their own path toward health, and the real issue is, Can we be a partner in helping people get there? I mean, customers are willing to put our product in their body! You have to respect that trust and continually challenge yourself to live up to it.