‘TeaEO’ At the Helm: Striving for Social Responsibility – Business Goal Setting Series

Honest Tea’s co-founder, Seth Goldman, just wanted to find something to quench his thirst. He ended with a multimillion-dollar international enterprise whose first and most important goal is simply to do the right thing.

Seth Goldman was thirsty. A distance runner, Goldman was also frustrated. He could never find a drink that was refreshing, tasted good and wasn’t loaded with sweeteners. So he set a simple goal: Make one.

He did. Today, as co-founder of Maryland-based Honest Tea, Goldman is president and “TeaEO” of the fastest-growing organic bottled tea company in the country. And he’s not thirsty anymore.

Honest Tea is distributed through more than 5,000 international outlets, with projected sales of $13.5 million in 2006.

Goldman found a kindred spirit in his Yale School of Management professor Barry Nalebuff, who also had thirst issues. So in 1998, the duo founded Honest Tea using a brew created in Goldman’s kitchen, and selling it from Thermoses and empty Snapple bottles.

Before his startup, Goldman was vice president of Calvert Social Investment Fund, managing the marketing and sales efforts of one of the largest socially responsible mutual funds. His interest in social and environmental causes carried over into every facet of Honest Tea, and it remains the guiding principle for the business.

Goal 1: Make a Meaningful Impact

“The biggest motivator for me is the notion that our business model is making a strong social and environmental impact,” Goldman says. “The key words for us are Authentic, Organic and Healthy.”

In 2004, Honest Tea received full USDA organic certification for all 12 of the bottled teas and tea-bag varieties it sold at the time, and became the first U.S. bottled tea manufacturer to sell a certified Fair Trade product. As the line has expanded, every addition is made with social responsibility in mind, and in the spring of 2007, Honest Tea is set to launch Honest Kids, a line of organic juices in recyclable pouches.

Though Goldman has seen his company grow tremendously from a startup investment of $50,000, he says what pleases him most is the positive image Honest Tea now enjoys, a result of meeting and maintaining the company’s first goal.

Goal 2: Hang On to the Passion

Honest Tea has formed partnerships with such charitable operations as City Year, a youth-oriented AmeriCorps program to help needy communities; the American Institute for Cancer Research; and the charitable feeding organization, Share Our Strength. But it’s not just a “do-good” attitude that drives Goldman. It’s passion for his work, one of the premier attributes of an entrepreneur.

“You have to feel this way because it’s way too hard,” he explains. “You need to be just silly about it.” With each year of double-digit success, Goldman’s business goals get a bit more formal, but he avoids wearing blinders when setting objectives. “If you’re too focused, you might miss opportunities nearby,” he says.

Goal 3: Don’t Let the Competition Call Your Shots

Goldman says he’s never paid much attention to the competition. Though grocery store shelves are sagging with bottled tea brands, Honest Tea is noticeably different – right down to labels that illustrate the tea’s origin, such as a Chinese rubbing from the Tang Dynasty or an oil painting from Guatemala.

“For us, the competition is just something to keep away from,” Goldman says. Typical of an entrepreneur, there’s a dangerous optimism in that statement, yet it’s also Goldman’s source of renewal, drive and energy.

“Entrepreneurs by definition are headstrong,” he says. “You have to have enough confidence to believe, but not enough arrogance that you wouldn’t look to others for help.”

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