An 'honest' deal

Coca Cola purchased a 40 percent stake in Honest Tea Feb. 5--the nation’s No. 1 selling brand of organic bottled tea, according to SPINSscan data.
Just as we’ve seen in other product categories in the natural and organic industry, it’s no surprise that Coca Cola is diversifying from the flat, conventional beverage market and investing in the hottest specialty food category—cold beverages. Cold beverages are purchased by 62 percent of all specialty food consumers, according to 2007 Mintel Research.
Seth Goldman, the self-described TeaEO and social entrepreneur, launched the tea brand ten years ago in his house. The company, which accounts for 58 percent of the certified organic bottled tea market as tracked by SPINSscan, had sales of $13.5 million in 2006 and has been averaging more than 50 percent growth for the past two years.
In a joint press statement with Coke, Goldman said, “Despite our 66 percent annual compound growth rate (70 percent in 2007), we still aren’t reaching all the people we want to reach. We want to see Honest be an agent of change not just through the example it sets but through its own actions as well.”
With the deal, Coke becomes Honest Tea’s largest shareholder. In his blog , Goldman writes: “the agreement was negotiated to ensure that Honest Tea will not be managed or controlled by Coke. We will continue to operate as an independent business with the same leadership and mission.”