hello everyone and welcome to another
google+ hangout i’m super excited to
have seth boldmann with me who is one of
the cofounders of honesty and I’ve been
doing this series if you guys know
interviewing successful entrepreneurs
who have built a business around one
word and how they’ve done it and so
super excited to have staff on board
Seth welcome to our hangout thanks
having good to be with you awesome and
so for people who may not be super
familiar with honesty could you give a
quick background for everybody sure
where the nation’s top selling organic
bottled tea it’s a company I started out
of my house 18 years ago now so we gonna
add it for a while but that we’ve grown
quite a bit over the years but now in
over 100 thousand stores around the
country and we just launched this this
month with Wendy’s which is really
exciting for us awesome now when you
were starting you know I read the story
and you wanted something that that was
made with organic materials and it
wasn’t as sweet as the other products on
the market right how important was the
name honest as a part of what you were
doing that’s always been the foundation
of what we’re doing it’s really our core
proposition so honest for a smooth
number one it tastes like what it says
it is and that’s because we don’t
sweeten it with funders sweetener so it
is just the ingredients or a bit of
sweetener the other element of course
honest means an honest and healthy
relationship with the environment so
that we everything we buy is organic
certified and has organic certification
and then on honest relationship with the
consumer to we will do our best to
transparent and to do what we say we
intend to do so this honest kind of core
value of yours is it something that’s
always been a part of of you as Seth or
is it something that when you founded
your company said okay we’re going to
build their own honesty well I think
it’s important to talk about is striving
I never would want to describe myself or
our company is perfect but we always
have that aspiration to be transparent
so that’s certainly something we had
from the beginning this idea that we
could be transparent that we would
always aspire to be better and I think
we you know continue to do that
why do you think that comes from for you
personally honesty like why is that such
an important word for you well I’m I
just I’m certainly I’ve been around the
nonprofit sector in the public sector
and I’m obviously now for 18 years a
private sector and i would say that
there is so much in all the sectors i
find that isn’t authentic and you know
when you look at it what is the real
currency today that’s valuable is trust
how do people how do we find a way to
help trust it’s not something you can
build over that you can it takes years
to build that can take a second to lose
and so for us that’s something we
continue to invest it you think there’s
a defining moment either in your
business career your personal career
that makes you feel like man this the
world needs more honesty um not one
moment but i do remember early on before
we launched we were doing some focus
groups and we were listening to
consumers and what we kept hearing
repeatedly was how much people had a
distrust of the beverage industry of
corporate America in general that you
know companies would say anything or
might not necessarily be honest and so
this idea that know if you could be
honest or you could aspire to be honest
and be honest when you’re at least when
you’re falling short that would be a
very valuable thing to create 11 for
people watching uh obviously it’s great
on the marketing side but you’ve done a
lot more around honest than just using
as a catchy slogan in the way to sell
tea built the whole business around and
the way you operate and where you have
your offices can you talk about how how
honest is kind of permeated you’re
nervous yeah I think it is really a part
of we seek to make a part of our culture
so our open space there’s no closed
rooms and that you know speech to the
transparency we have always when we
built the company for the first ten
years when we were independent we had
stock options for all the employees so
everyone had a shared investment in what
we’re building and now that we since
we’ve been acquired we continue to find
ways to create entrepreneurial
structures where people
you the business results can share in
the benefits of the results and so those
those are values we really try to
ingrain in our employees too and I think
they’re the other thing is you know open
book management people understand how
the business is doing all the time
there’s no guesswork we never have a
conversation with somebody where they
wonder you know if there’s a bonus or
what their bonus will be they know
exactly how the business is doing
because they own their piece of business
and have direct accountability to it how
do you hire for honesty hmm well you uh
you know you certainly we spend a lot we
do multiple people interviewed multiple
candidates we bring the people into the
office so they can see our environment
and how we work and you know we
certainly try to make sure the people
coming in have a full understanding and
obviously we check references um you
know if you can’t get it perfectly all
the time so there’s obviously in any
entrepreneurial organization there’s
going to be occasions where people don’t
fit we’ve certainly had that happened I
think one of the benefits is because we
are still a very results driven business
we know pretty quickly whether or not
somebody fits and it usually doesn’t
last long if it’s not a fit have you
ever had to make a difficult choice that
might on paper and short term look good
for the business but you felt was
countered to your honest values um no
you know we for example I mean the most
vivid one of course would be well like
if we made our drinks sweeter we know
they would sell more that’s just my back
it was like we have really kept that
discipline understanding we’re building
something long term here and so you know
even if consumers aren’t exactly where
we want them to be today if we’re going
to be a valuable brand we’ve got to stay
with what we think is the right
formulations and and you know I would
say now we’re kind of reaping the
benefits of those earlier hard decisions
did you have people who who said that
that was a stupid decision or even
people in the industry said hey just
just add a little more sugar to it or a
little more
all the time for sure interesting a lot
of companies I have a list of core
values you know and I don’t know if you
even the CEO would be able to name off
the core values of their companies and
it just seems to be something that
people do instead of something that
companies actually live does does having
a you know something built around
something as simple to understand is
honesty help help attract help attract
customers help attract people help
attract suppliers to the mission that
you guys are on yeah it certainly does I
mean you can still have multiple
interpretations of exactly what honesty
means but the end of the day you know we
know it helps guide our packaging
decisions you know we know we need to
think about where is the minimal
environmental impact where’s the most
transparent package we can find it
certainly guides what kind of partners
we promote with you know we want to make
sure we’re affiliated with either brands
that share our values if we’re going to
be doing some kind of a promotion and so
it is it also makes decisions pretty
clear-cut we’ve had you know some events
in the past where we had a questionable
behavior by an employee and we knew our
mission you know if it was dishonest
baby there wasn’t a short it wasn’t a
long discussion we didn’t elaborate much
like well we know what we stand for and
so we had to take quick action and it
was hard for a consumer who I’m sorry
for an employee who hadn’t been
forthright to somehow try to defend him
or herself right I’m I guess it’ll help
self eliminate the wrong people as well
right people see honest and the people
say lots that’s stupid who names their
company honest you know you don’t want
those guys in your business anyway yeah
yeah the only thing is that we don’t
want to sound self-righteous we are you
know recognizing that it’s always a
process that we’re on a journey so as
long as we sort of people understand
they’re moving in that the right
direction and there that we’re along
that journey ourselves as a company then
I think that’s important too what do you
feel is next along that journey what
what happened
done yet that’s kind of on the path to
make it more well certainly the first
priority is growth we continue to grow
very aggressively we’ve been seeing
strong double-digit growth for think
really at least the past 10 years so if
you know we’re on a good run he
continued to we talked about trying to
democratize organic so we never set out
just to sell healthy drinks to healthy
people our goal is to really bring these
products to people all around the
country and that’s why we’re so excited
about the partnership with Wendy’s as an
example so that’s clearly a the first
priority is to expand our user base to
expand the number of occasions and
opportunities people have to consume our
products and then beyond that we can
think about what are the other
categories where it makes sense to have
an honest food or an honest drink and
and so obviously we’ve been in the
beverage space but we know this space
and food and then of course beyond that
we know this great international
opportunities these values that we’re
building and and the translation of our
business or if I nomemes exclusive to
the United States there’s a lot of
people around the world who will benefit
from moving toward a healthier diet and
we want to be able to be their partner
journey so how would you look at you
know some people might look at that a
relationship with wendy’s for example
and say well when these doesn’t sell
honest food why are you guys partnered
with wendy’s is it you want to it
furthers your mission of spreading
honesty and making you know these other
brains more honest and having consumers
be able to could consume more honest
product is that how you look at it well
just as I said every company every
person’s on that journey and every
companies on that journey too so i think
if you look ten years ago the whole
American diet was in a very different
place it moves towards a healthier place
in a more environmentally sustainable
place this is where we’re an important
partner in that process and so we’ve
been very excited to see how Wendy’s has
embraced what our product is the values
behind it and and so it’s been a great
compliment as they you know their menu
have gotten healthier and whether their
salads they’re offering one other
offerings that really complement an
organic fairtrade look you know a lower
sugar bottle tea it’s great to have a
partner like that that has such a
I user base and so many people coming in
their doors every day one where can go
like how far I can extend the brand can
you bring on can you bring on obviously
food products is a an easy step could
you could you go further could you go
you know could you have honest cars you
have honest computers is that part of
the revolution you know part of it is
you have to have a discipline you really
have to understand something and build
that out we have we’re so early in what
we’re building so our first aspiration
and still the one we’re working on is to
make this a beverage brand that we call
it a billion-dollar brand so you know
that that is a goal that we have
certainly with the coca-cola system
shares as well and so we have a long way
to go in building it to be a
billion-dollar beverage brand so these
other opportunities I think will
continue to be there to build it out to
food or other space but we’ve got to
build the beverage piece first because
once we do that the other pieces will
become and will make more sense and
we’ve seen you know one of the one of
the areas on brand is just exploded as a
line called honest kids it’s a line up
as it sounds so you know toward it’s a
juice drink for kids using sold in a
juice pouch or a juice box and that
business is grown consistently you know
in the thirty to forty percent range
every year it’s now more than a third of
our business and so that’s a great
example of how we can extend the brand
for the right occasion and same idea
that it’s organic and less sugar than
exactly the other products yeah that’s
great I mean I have a five-year-old son
and the amount of sugar in the juice
boxes is just ridiculous yeah yeah it’s
I was buying those those sugary juice
pouches for my kids I have to admit and
so it won one of my son said how come
you’re selling these healthy dreams to
grownups but you’re putting really
sugary drinks in our lunch boxes and I
said no right and so that line is just
exploded it’s it’s and it totally
connects with an unmet need for sure is
that is a chronic available nationwide
nationwide it’s an all target stores
it’s in Whole Foods it’s in really most
safeway kroger it’s in all
major grocery stores cool I gotta check
it out yeah for entrepreneurs who are
looking to that’s the audience watching
the show for entrepreneurs looking to
you know build their business around a a
core value what kind of advice would you
give them well and I i think it’s it’s
something i saw on your website as well
you’ve gotta have passion for what
you’re doing you’ve got to really have a
clear point of view you know don’t don’t
try to chase the market chase where
something you believe is an idea and and
and then make sure what you’re offering
is different and distinct from the
market you know we as I said we know we
could grow faster if we made our drink
sweeter but in the day we would have
built something that didn’t have any
meaning because everybody can build a
sweet drink and a sweet drink brand not
everybody but I mean it’s much easier to
do that and it’s all I need a lot of
those out there so by sticking to the
idea that we were going to make
something first of all we believed in
that we were personally thirst before
unless we drink we knew that if we could
build it it would be something valuable
and so it wasn’t just slightly less
sweet so you know back in 1998 when we
came out most of the bottle tease were
at 100 calories per serving we didn’t
come out with an 80 or 90 calorie drink
we came out with a 17 calorie parade on
starving it was so so dramatically
different that not not everybody liked
it but for the people who liked it they
weren’t going to go back and start
drinking hundred calories again right
now put the whole market is shifted much
closer to where we are but in the
meantime we built something that had a
pretty sturdy mode around it right
here’s what T actually tastes like yeah
can you talk about the the suppliers
that you work with and in the mission
that you’re on to empower the T
suppliers that you work with or and we
put up on YouTube a lot of the videos on
me going to visit the different tea
garden so all of the team suppliers we
source from our certified organic and
now on the T supplies mousse or summer
also fair trade certified which means a
portion of the sales goes back to these
communities for them to invest in their
own community priorities it also means
there’s no slave labor child labor and
the fact that all the workers are paid
a fair wage for the countries they live
in so that process is a great base of a
relationship and then what we can do on
top of that is find ways to bring
additional resources to these
communities we source from a tea garden
in assam india where last year we
brought in a team of eye care
specialists and so 6,000 villagers got
to have I exams and a little bit less
than a thousandth of ended up with
either glasses or or some treatment for
other eye problems they had in this is a
community that just did not have access
to I I Karen and a lot of these you know
really so this was a you know this
benefit the literacy obviously we are
rational we will help them pick better
tea leaves but for the children it also
helped them you know create some new
economic opportunities we also buy fair
trade sugar and so that’s from Paraguay
and we source that also fair trade and
organic so we’re able to invest in those
communities as well for those kind of
giving back programs you have some kind
of formula that you use like a
percentage of revenue or profits or is
it just you want to have an impact can
you looking for ways to do it well first
of all every time we buy a pound of
these pound of these ingredients we’re
helping to support economic
opportunities communities and helping
them move away from the kind of
subsistence economy that a come on if
they were selling a commodity so when
you can make it organic and fair trade
does make it a value-added product but
also value-added price they are able to
earn you know because of the premiums of
the products of those criteria it helps
them really develop a livable wage they
can they can make a living off those are
breeding so that’s the by far and away
the best score benefit but beyond that
there is a formula for fair trade a
certain amount per every pound we
purchased does go to the community so
it’s it’s a fixed amount but when you
start to add it up it ends up you know
wait are quite a lot of money as we’ve
increased our are purchasing and just to
give you a sense of that going back to
2007 just before we invested in honesty
we were buying about 800,000 pounds of
organic ingredients a year this year
we’re going to buy over 10 million
pounds over
ingredients so really scale our
purchases and because of all of those
commodities our tea and sugar or fair
trade you know we’re also scaling the
amount of money we’re investing back in
these communities how do you handle
things that that aren’t organic or
everything organic from the ingredients
of the packaging to to the packaging is
not organic so there will try to look
for lightweight or recyclable wherever
we can but yeah we now no longer will
consider a key ingredient if it’s not
organic and the same with our sugars and
some of the other ingredients there’s
certain ingredients like citric acid
that will use to stabilize the products
those aren’t organic they have to be
what’s called organic compliant but we
are now to place where we will not even
a review an ingredient if it doesn’t the
organic certification and of course
kosher certification and where relevant
fair trade as well right so every
ingredient in every honesty product is
organic well every ingredient organic
compliant like I said central gases an
example of one that isn’t organic but it
is compliant okay and then does it go
into the whole supply chain too so I
mean you’ve got to shift this stuff over
is it yeah absolutely i does honesty
factor in there yeah well we go you know
we go to these communities and what’s
nice is so it’s no longer just me going
to these communities and saying i want
to buy organic ingredients some guy from
Bethesda Maryland saying he wants
organic ingredients it’s part of the
coca-cola company and we’re growing and
this is a this is a priority growth area
for us if you want to be our partner we
need you to have Organa a sore ganic
fair trade certified ingredients yeah so
talk about acquisition so coca-cola buys
you out how do you you know maintain the
honesty you know we have a different set
of values in way they do business and
and you say well it listen we gotta we
gotta keep what we’re doing how did that
conversation yeah it was I think it
continues to be an exception to the way
things usually work in corporate America
but back in two thousand eight day about
forty percent of the company and so they
came on as a minority shareholder and
what that meant for us was that they
were at the table they were on are they
and our board but they were not giving
directions so they were good partners
and we expanded distribution and when
they but we scaled from business and
when it came time for coke to buy the
rest of the company they took the option
they had to buy it but we had a
conversation which was you know hey this
is still working let’s not screw it up
so let you know if continue to have the
business run out of Bethesda Maryland
let’s continue to have the folks in
Atlanta around the country support the
business the way they are but let’s not
sort of kill the Golden Goose here and I
think the fact that we had that
three-year all on a dating period really
helped prove to both sides that we could
work together in a way that was
respectful that was recognizing the
value of this different mindset and for
that reason it still continues to work
we’re now seven years into this
relationship with coke and I think we’re
all a little surprised that you know
it’s still working but it is so let’s
not mess it up cool who is the first
customer that you guys had whole foods I
went into Whole Foods back in I launched
a company in February of 1998 and I went
into Whole Foods in March with five
thermoses of tea and a empty bottle
bottle of Snapple that I had pasted a
label on and said no we want to sell
this in your store and the buyer got it
he gave us a chance hehe placed an order
for fifteen thousand bottles back before
we really made the product so they were
critical to our growth and there’s still
a key strategic partner for us we just
launched this summer a great line of
organic fair trade certified lemonade
held honest lemonade it’s available
exclusively in whole foods and so you
know we continue I continue to be
thankful that they took that bet on us
and I believe they could agree that
nothing made it was a good bet to take
yeah so they bet on you even before you
had the product he’s had yeah Wow then
you had to go and fulfill that order
yeah cause the letter that was that I
didn’t get much sleep in that in those
intervening months but it was worth it
how do you handle the brand extensions
with the name so you know honesty
obviously it was about tea and then
honest lemonade lemonade is it do you
have like it an honest group of
companies that everything sits under or
is it all still under honesty how do you
how do you at all it’s all in the same
enterprise but yeah we have you know it
has to meet this standard of certainly
healthier than the prevailing options in
the market organic certified fair trade
certified so we have a line called
honest fizz which is a zero-calorie line
of sodas it’s organic it’s the only line
of organic zero calorie soda on the
market as I mentioned on his kids which
is the kids drink so it all has to fit
under that platform and you know we’ve
certainly had a few efforts that have
not succeeded not because they weren’t
organic or they weren’t in the sweetness
profile but you know you have to keep
trying new ideas and I’d say every
really every year we’re bringing out
some kind of new product and then when
you’re launching it to you you know you
have your you have a really distinct
logo or it’s the word honest and then
the tea has little leaf on it for the
job do you keep the honest and then add
something else at the end how do you how
do you play with the marketing on it I
think one of the things we found is it
works well when it’s a short name
extension so honesty on his kids honest
lemonade maybe is a little long on
espares those generally work well uh we
do know the product has to describe as
to be quick and easy to understand in
terms of what it describes we had a
product called honest coke innova that
people didn’t really know what it was it
was a brood cacao product Coco Nova
didn’t quite explain what it was but I
think there were enough other challenges
with that line that I’m not sure that
you know we were that was the only
problem with that line got it now I want
to be conscious at the time you
mentioned you also wrote a book and you
can your honor code and the lessons in
there yeah so right around the time we
had done a deal with coca-cola my
co-founder Barry and I were talking and
said you know we’ve learned so much from
this journey we want to inspire other
people to follow this their path follow
their passion of scaling taking an idea
to scale but let’s not do it the
traditional way there’s so many of the
Entrepreneurship books up there sort of
fall into a pattern where you generally
all read the first few chapters and say
okay
get it so it was also at that time that
my oldest son who is that when he was a
senior in high school and he was in
senior slum he was no longer doing his
books or just reading comic books I said
wait a minute what if we could take the
idea of telling an entrepreneurship
story and make it into a comic book and
so that’s why we created mission in the
bottle and it was it’s a fun story of
how we built this business told in comic
book form I’m writing that down mission
in a bottle I’m going to look it up an
amazon and buy it well i’ll link to it
add in the notes to I so is that meant
for kids is it meant to be my bad boy
here’s the idea absolutely contains all
of the lessons I would give any
entrepreneur but it’s told in a way that
a kid can enjoy it and so I’ve heard
from a lot of middle school in high
school students and college students who
an MBA students who just that really
enjoyed it as a story but it does have
you know we have fairly complex option
structure it explains how we did that it
talks about our cost of goods how we
take margin on product how we work with
new supplier so it really works on a lot
of different levels that’s cool well I
have a five-year-old son and may have
just found my new bedtime story forehead
ago he may you may want to skip over the
chapter on warrants with him but the
part about brewing the tea and uh and
how we developed relationships with
different communities I think they’ll
enjoy that’s cool I mean it’s a totally
different approach to how most people
will publish a book right I like it cool
well thank you so much as when the time
today at Seth Goldman from the honesty
company I’ll link the website in the
description as well as a link to the
book thank you so much you spending your
time with us I really appreciate it
thanks having gonna be right here okay
take care all right
google+ hangout i’m super excited to
have seth boldmann with me who is one of
the cofounders of honesty and I’ve been
doing this series if you guys know
interviewing successful entrepreneurs
who have built a business around one
word and how they’ve done it and so
super excited to have staff on board
Seth welcome to our hangout thanks
having good to be with you awesome and
so for people who may not be super
familiar with honesty could you give a
quick background for everybody sure
where the nation’s top selling organic
bottled tea it’s a company I started out
of my house 18 years ago now so we gonna
add it for a while but that we’ve grown
quite a bit over the years but now in
over 100 thousand stores around the
country and we just launched this this
month with Wendy’s which is really
exciting for us awesome now when you
were starting you know I read the story
and you wanted something that that was
made with organic materials and it
wasn’t as sweet as the other products on
the market right how important was the
name honest as a part of what you were
doing that’s always been the foundation
of what we’re doing it’s really our core
proposition so honest for a smooth
number one it tastes like what it says
it is and that’s because we don’t
sweeten it with funders sweetener so it
is just the ingredients or a bit of
sweetener the other element of course
honest means an honest and healthy
relationship with the environment so
that we everything we buy is organic
certified and has organic certification
and then on honest relationship with the
consumer to we will do our best to
transparent and to do what we say we
intend to do so this honest kind of core
value of yours is it something that’s
always been a part of of you as Seth or
is it something that when you founded
your company said okay we’re going to
build their own honesty well I think
it’s important to talk about is striving
I never would want to describe myself or
our company is perfect but we always
have that aspiration to be transparent
so that’s certainly something we had
from the beginning this idea that we
could be transparent that we would
always aspire to be better and I think
we you know continue to do that
why do you think that comes from for you
personally honesty like why is that such
an important word for you well I’m I
just I’m certainly I’ve been around the
nonprofit sector in the public sector
and I’m obviously now for 18 years a
private sector and i would say that
there is so much in all the sectors i
find that isn’t authentic and you know
when you look at it what is the real
currency today that’s valuable is trust
how do people how do we find a way to
help trust it’s not something you can
build over that you can it takes years
to build that can take a second to lose
and so for us that’s something we
continue to invest it you think there’s
a defining moment either in your
business career your personal career
that makes you feel like man this the
world needs more honesty um not one
moment but i do remember early on before
we launched we were doing some focus
groups and we were listening to
consumers and what we kept hearing
repeatedly was how much people had a
distrust of the beverage industry of
corporate America in general that you
know companies would say anything or
might not necessarily be honest and so
this idea that know if you could be
honest or you could aspire to be honest
and be honest when you’re at least when
you’re falling short that would be a
very valuable thing to create 11 for
people watching uh obviously it’s great
on the marketing side but you’ve done a
lot more around honest than just using
as a catchy slogan in the way to sell
tea built the whole business around and
the way you operate and where you have
your offices can you talk about how how
honest is kind of permeated you’re
nervous yeah I think it is really a part
of we seek to make a part of our culture
so our open space there’s no closed
rooms and that you know speech to the
transparency we have always when we
built the company for the first ten
years when we were independent we had
stock options for all the employees so
everyone had a shared investment in what
we’re building and now that we since
we’ve been acquired we continue to find
ways to create entrepreneurial
structures where people
you the business results can share in
the benefits of the results and so those
those are values we really try to
ingrain in our employees too and I think
they’re the other thing is you know open
book management people understand how
the business is doing all the time
there’s no guesswork we never have a
conversation with somebody where they
wonder you know if there’s a bonus or
what their bonus will be they know
exactly how the business is doing
because they own their piece of business
and have direct accountability to it how
do you hire for honesty hmm well you uh
you know you certainly we spend a lot we
do multiple people interviewed multiple
candidates we bring the people into the
office so they can see our environment
and how we work and you know we
certainly try to make sure the people
coming in have a full understanding and
obviously we check references um you
know if you can’t get it perfectly all
the time so there’s obviously in any
entrepreneurial organization there’s
going to be occasions where people don’t
fit we’ve certainly had that happened I
think one of the benefits is because we
are still a very results driven business
we know pretty quickly whether or not
somebody fits and it usually doesn’t
last long if it’s not a fit have you
ever had to make a difficult choice that
might on paper and short term look good
for the business but you felt was
countered to your honest values um no
you know we for example I mean the most
vivid one of course would be well like
if we made our drinks sweeter we know
they would sell more that’s just my back
it was like we have really kept that
discipline understanding we’re building
something long term here and so you know
even if consumers aren’t exactly where
we want them to be today if we’re going
to be a valuable brand we’ve got to stay
with what we think is the right
formulations and and you know I would
say now we’re kind of reaping the
benefits of those earlier hard decisions
did you have people who who said that
that was a stupid decision or even
people in the industry said hey just
just add a little more sugar to it or a
little more
all the time for sure interesting a lot
of companies I have a list of core
values you know and I don’t know if you
even the CEO would be able to name off
the core values of their companies and
it just seems to be something that
people do instead of something that
companies actually live does does having
a you know something built around
something as simple to understand is
honesty help help attract help attract
customers help attract people help
attract suppliers to the mission that
you guys are on yeah it certainly does I
mean you can still have multiple
interpretations of exactly what honesty
means but the end of the day you know we
know it helps guide our packaging
decisions you know we know we need to
think about where is the minimal
environmental impact where’s the most
transparent package we can find it
certainly guides what kind of partners
we promote with you know we want to make
sure we’re affiliated with either brands
that share our values if we’re going to
be doing some kind of a promotion and so
it is it also makes decisions pretty
clear-cut we’ve had you know some events
in the past where we had a questionable
behavior by an employee and we knew our
mission you know if it was dishonest
baby there wasn’t a short it wasn’t a
long discussion we didn’t elaborate much
like well we know what we stand for and
so we had to take quick action and it
was hard for a consumer who I’m sorry
for an employee who hadn’t been
forthright to somehow try to defend him
or herself right I’m I guess it’ll help
self eliminate the wrong people as well
right people see honest and the people
say lots that’s stupid who names their
company honest you know you don’t want
those guys in your business anyway yeah
yeah the only thing is that we don’t
want to sound self-righteous we are you
know recognizing that it’s always a
process that we’re on a journey so as
long as we sort of people understand
they’re moving in that the right
direction and there that we’re along
that journey ourselves as a company then
I think that’s important too what do you
feel is next along that journey what
what happened
done yet that’s kind of on the path to
make it more well certainly the first
priority is growth we continue to grow
very aggressively we’ve been seeing
strong double-digit growth for think
really at least the past 10 years so if
you know we’re on a good run he
continued to we talked about trying to
democratize organic so we never set out
just to sell healthy drinks to healthy
people our goal is to really bring these
products to people all around the
country and that’s why we’re so excited
about the partnership with Wendy’s as an
example so that’s clearly a the first
priority is to expand our user base to
expand the number of occasions and
opportunities people have to consume our
products and then beyond that we can
think about what are the other
categories where it makes sense to have
an honest food or an honest drink and
and so obviously we’ve been in the
beverage space but we know this space
and food and then of course beyond that
we know this great international
opportunities these values that we’re
building and and the translation of our
business or if I nomemes exclusive to
the United States there’s a lot of
people around the world who will benefit
from moving toward a healthier diet and
we want to be able to be their partner
journey so how would you look at you
know some people might look at that a
relationship with wendy’s for example
and say well when these doesn’t sell
honest food why are you guys partnered
with wendy’s is it you want to it
furthers your mission of spreading
honesty and making you know these other
brains more honest and having consumers
be able to could consume more honest
product is that how you look at it well
just as I said every company every
person’s on that journey and every
companies on that journey too so i think
if you look ten years ago the whole
American diet was in a very different
place it moves towards a healthier place
in a more environmentally sustainable
place this is where we’re an important
partner in that process and so we’ve
been very excited to see how Wendy’s has
embraced what our product is the values
behind it and and so it’s been a great
compliment as they you know their menu
have gotten healthier and whether their
salads they’re offering one other
offerings that really complement an
organic fairtrade look you know a lower
sugar bottle tea it’s great to have a
partner like that that has such a
I user base and so many people coming in
their doors every day one where can go
like how far I can extend the brand can
you bring on can you bring on obviously
food products is a an easy step could
you could you go further could you go
you know could you have honest cars you
have honest computers is that part of
the revolution you know part of it is
you have to have a discipline you really
have to understand something and build
that out we have we’re so early in what
we’re building so our first aspiration
and still the one we’re working on is to
make this a beverage brand that we call
it a billion-dollar brand so you know
that that is a goal that we have
certainly with the coca-cola system
shares as well and so we have a long way
to go in building it to be a
billion-dollar beverage brand so these
other opportunities I think will
continue to be there to build it out to
food or other space but we’ve got to
build the beverage piece first because
once we do that the other pieces will
become and will make more sense and
we’ve seen you know one of the one of
the areas on brand is just exploded as a
line called honest kids it’s a line up
as it sounds so you know toward it’s a
juice drink for kids using sold in a
juice pouch or a juice box and that
business is grown consistently you know
in the thirty to forty percent range
every year it’s now more than a third of
our business and so that’s a great
example of how we can extend the brand
for the right occasion and same idea
that it’s organic and less sugar than
exactly the other products yeah that’s
great I mean I have a five-year-old son
and the amount of sugar in the juice
boxes is just ridiculous yeah yeah it’s
I was buying those those sugary juice
pouches for my kids I have to admit and
so it won one of my son said how come
you’re selling these healthy dreams to
grownups but you’re putting really
sugary drinks in our lunch boxes and I
said no right and so that line is just
exploded it’s it’s and it totally
connects with an unmet need for sure is
that is a chronic available nationwide
nationwide it’s an all target stores
it’s in Whole Foods it’s in really most
safeway kroger it’s in all
major grocery stores cool I gotta check
it out yeah for entrepreneurs who are
looking to that’s the audience watching
the show for entrepreneurs looking to
you know build their business around a a
core value what kind of advice would you
give them well and I i think it’s it’s
something i saw on your website as well
you’ve gotta have passion for what
you’re doing you’ve got to really have a
clear point of view you know don’t don’t
try to chase the market chase where
something you believe is an idea and and
and then make sure what you’re offering
is different and distinct from the
market you know we as I said we know we
could grow faster if we made our drink
sweeter but in the day we would have
built something that didn’t have any
meaning because everybody can build a
sweet drink and a sweet drink brand not
everybody but I mean it’s much easier to
do that and it’s all I need a lot of
those out there so by sticking to the
idea that we were going to make
something first of all we believed in
that we were personally thirst before
unless we drink we knew that if we could
build it it would be something valuable
and so it wasn’t just slightly less
sweet so you know back in 1998 when we
came out most of the bottle tease were
at 100 calories per serving we didn’t
come out with an 80 or 90 calorie drink
we came out with a 17 calorie parade on
starving it was so so dramatically
different that not not everybody liked
it but for the people who liked it they
weren’t going to go back and start
drinking hundred calories again right
now put the whole market is shifted much
closer to where we are but in the
meantime we built something that had a
pretty sturdy mode around it right
here’s what T actually tastes like yeah
can you talk about the the suppliers
that you work with and in the mission
that you’re on to empower the T
suppliers that you work with or and we
put up on YouTube a lot of the videos on
me going to visit the different tea
garden so all of the team suppliers we
source from our certified organic and
now on the T supplies mousse or summer
also fair trade certified which means a
portion of the sales goes back to these
communities for them to invest in their
own community priorities it also means
there’s no slave labor child labor and
the fact that all the workers are paid
a fair wage for the countries they live
in so that process is a great base of a
relationship and then what we can do on
top of that is find ways to bring
additional resources to these
communities we source from a tea garden
in assam india where last year we
brought in a team of eye care
specialists and so 6,000 villagers got
to have I exams and a little bit less
than a thousandth of ended up with
either glasses or or some treatment for
other eye problems they had in this is a
community that just did not have access
to I I Karen and a lot of these you know
really so this was a you know this
benefit the literacy obviously we are
rational we will help them pick better
tea leaves but for the children it also
helped them you know create some new
economic opportunities we also buy fair
trade sugar and so that’s from Paraguay
and we source that also fair trade and
organic so we’re able to invest in those
communities as well for those kind of
giving back programs you have some kind
of formula that you use like a
percentage of revenue or profits or is
it just you want to have an impact can
you looking for ways to do it well first
of all every time we buy a pound of
these pound of these ingredients we’re
helping to support economic
opportunities communities and helping
them move away from the kind of
subsistence economy that a come on if
they were selling a commodity so when
you can make it organic and fair trade
does make it a value-added product but
also value-added price they are able to
earn you know because of the premiums of
the products of those criteria it helps
them really develop a livable wage they
can they can make a living off those are
breeding so that’s the by far and away
the best score benefit but beyond that
there is a formula for fair trade a
certain amount per every pound we
purchased does go to the community so
it’s it’s a fixed amount but when you
start to add it up it ends up you know
wait are quite a lot of money as we’ve
increased our are purchasing and just to
give you a sense of that going back to
2007 just before we invested in honesty
we were buying about 800,000 pounds of
organic ingredients a year this year
we’re going to buy over 10 million
pounds over
ingredients so really scale our
purchases and because of all of those
commodities our tea and sugar or fair
trade you know we’re also scaling the
amount of money we’re investing back in
these communities how do you handle
things that that aren’t organic or
everything organic from the ingredients
of the packaging to to the packaging is
not organic so there will try to look
for lightweight or recyclable wherever
we can but yeah we now no longer will
consider a key ingredient if it’s not
organic and the same with our sugars and
some of the other ingredients there’s
certain ingredients like citric acid
that will use to stabilize the products
those aren’t organic they have to be
what’s called organic compliant but we
are now to place where we will not even
a review an ingredient if it doesn’t the
organic certification and of course
kosher certification and where relevant
fair trade as well right so every
ingredient in every honesty product is
organic well every ingredient organic
compliant like I said central gases an
example of one that isn’t organic but it
is compliant okay and then does it go
into the whole supply chain too so I
mean you’ve got to shift this stuff over
is it yeah absolutely i does honesty
factor in there yeah well we go you know
we go to these communities and what’s
nice is so it’s no longer just me going
to these communities and saying i want
to buy organic ingredients some guy from
Bethesda Maryland saying he wants
organic ingredients it’s part of the
coca-cola company and we’re growing and
this is a this is a priority growth area
for us if you want to be our partner we
need you to have Organa a sore ganic
fair trade certified ingredients yeah so
talk about acquisition so coca-cola buys
you out how do you you know maintain the
honesty you know we have a different set
of values in way they do business and
and you say well it listen we gotta we
gotta keep what we’re doing how did that
conversation yeah it was I think it
continues to be an exception to the way
things usually work in corporate America
but back in two thousand eight day about
forty percent of the company and so they
came on as a minority shareholder and
what that meant for us was that they
were at the table they were on are they
and our board but they were not giving
directions so they were good partners
and we expanded distribution and when
they but we scaled from business and
when it came time for coke to buy the
rest of the company they took the option
they had to buy it but we had a
conversation which was you know hey this
is still working let’s not screw it up
so let you know if continue to have the
business run out of Bethesda Maryland
let’s continue to have the folks in
Atlanta around the country support the
business the way they are but let’s not
sort of kill the Golden Goose here and I
think the fact that we had that
three-year all on a dating period really
helped prove to both sides that we could
work together in a way that was
respectful that was recognizing the
value of this different mindset and for
that reason it still continues to work
we’re now seven years into this
relationship with coke and I think we’re
all a little surprised that you know
it’s still working but it is so let’s
not mess it up cool who is the first
customer that you guys had whole foods I
went into Whole Foods back in I launched
a company in February of 1998 and I went
into Whole Foods in March with five
thermoses of tea and a empty bottle
bottle of Snapple that I had pasted a
label on and said no we want to sell
this in your store and the buyer got it
he gave us a chance hehe placed an order
for fifteen thousand bottles back before
we really made the product so they were
critical to our growth and there’s still
a key strategic partner for us we just
launched this summer a great line of
organic fair trade certified lemonade
held honest lemonade it’s available
exclusively in whole foods and so you
know we continue I continue to be
thankful that they took that bet on us
and I believe they could agree that
nothing made it was a good bet to take
yeah so they bet on you even before you
had the product he’s had yeah Wow then
you had to go and fulfill that order
yeah cause the letter that was that I
didn’t get much sleep in that in those
intervening months but it was worth it
how do you handle the brand extensions
with the name so you know honesty
obviously it was about tea and then
honest lemonade lemonade is it do you
have like it an honest group of
companies that everything sits under or
is it all still under honesty how do you
how do you at all it’s all in the same
enterprise but yeah we have you know it
has to meet this standard of certainly
healthier than the prevailing options in
the market organic certified fair trade
certified so we have a line called
honest fizz which is a zero-calorie line
of sodas it’s organic it’s the only line
of organic zero calorie soda on the
market as I mentioned on his kids which
is the kids drink so it all has to fit
under that platform and you know we’ve
certainly had a few efforts that have
not succeeded not because they weren’t
organic or they weren’t in the sweetness
profile but you know you have to keep
trying new ideas and I’d say every
really every year we’re bringing out
some kind of new product and then when
you’re launching it to you you know you
have your you have a really distinct
logo or it’s the word honest and then
the tea has little leaf on it for the
job do you keep the honest and then add
something else at the end how do you how
do you play with the marketing on it I
think one of the things we found is it
works well when it’s a short name
extension so honesty on his kids honest
lemonade maybe is a little long on
espares those generally work well uh we
do know the product has to describe as
to be quick and easy to understand in
terms of what it describes we had a
product called honest coke innova that
people didn’t really know what it was it
was a brood cacao product Coco Nova
didn’t quite explain what it was but I
think there were enough other challenges
with that line that I’m not sure that
you know we were that was the only
problem with that line got it now I want
to be conscious at the time you
mentioned you also wrote a book and you
can your honor code and the lessons in
there yeah so right around the time we
had done a deal with coca-cola my
co-founder Barry and I were talking and
said you know we’ve learned so much from
this journey we want to inspire other
people to follow this their path follow
their passion of scaling taking an idea
to scale but let’s not do it the
traditional way there’s so many of the
Entrepreneurship books up there sort of
fall into a pattern where you generally
all read the first few chapters and say
okay
get it so it was also at that time that
my oldest son who is that when he was a
senior in high school and he was in
senior slum he was no longer doing his
books or just reading comic books I said
wait a minute what if we could take the
idea of telling an entrepreneurship
story and make it into a comic book and
so that’s why we created mission in the
bottle and it was it’s a fun story of
how we built this business told in comic
book form I’m writing that down mission
in a bottle I’m going to look it up an
amazon and buy it well i’ll link to it
add in the notes to I so is that meant
for kids is it meant to be my bad boy
here’s the idea absolutely contains all
of the lessons I would give any
entrepreneur but it’s told in a way that
a kid can enjoy it and so I’ve heard
from a lot of middle school in high
school students and college students who
an MBA students who just that really
enjoyed it as a story but it does have
you know we have fairly complex option
structure it explains how we did that it
talks about our cost of goods how we
take margin on product how we work with
new supplier so it really works on a lot
of different levels that’s cool well I
have a five-year-old son and may have
just found my new bedtime story forehead
ago he may you may want to skip over the
chapter on warrants with him but the
part about brewing the tea and uh and
how we developed relationships with
different communities I think they’ll
enjoy that’s cool I mean it’s a totally
different approach to how most people
will publish a book right I like it cool
well thank you so much as when the time
today at Seth Goldman from the honesty
company I’ll link the website in the
description as well as a link to the
book thank you so much you spending your
time with us I really appreciate it
thanks having gonna be right here okay
take care all right
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