Honest Tea: A Family Affair

"TeaEO" Seth Goldman shares some of the ways that his family has been involved in Honest Tea's evolution.

Mar 12, 2014 at 5:00PM

Seth Goldman and Barry Nalebuff founded Honest Tea in 1998. In the recently released Mission in a Bottle, the co-founders tell -- in comic book form -- the story of building a successful mission-driven business. Goldman, now president and "TeaEO" of Honest Tea, joins Motley Fool CEO Tom Gardner to discuss sustainability, entrepreneurship, and what it means for a socially responsible, health-oriented business to be bought by Coca-Cola (NYSE:KO) .

Goldman tells of brewing early tea mixtures in his kitchen, and the role his family has played throughout the story of Honest Tea. The most rewarding times, he says, were the visits to tea-growing communities and sharing the organic farmers' experiences of living in harmony with nature.

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Tom Gardner: When it comes to actually brewing tea to get started, where did you start, and what was the process of finding the right admixture?

Seth Goldman: We literally started in my kitchen. We had an opportunity to present our tea to the Whole Foods buyer in Rockville, Md., so Barry and I took over the kitchen. We got five thermoses and lots of tea leaves, and all kinds of beakers -- basically bowls and tea cups; I don't want to make it sound too scientific.

Then we got an empty Snapple bottle that we pasted a label on. That was our sales model. It's worth saying that, in the middle of all that, my wife walked in -- it's such a poignant memory for me -- with our middle son. They had had an appointment with a doctor and he had been diagnosed with a cardiac ... his aorta was constricted.

So, on the day before I'm about to make what's easily the biggest presentation in Honest Tea's young history, we get this terrible news dropped on us, that our son is going to have to have major cardiac surgery within a matter of weeks.

Gardner: Talk a little bit about the role your family has played in Honest Tea -- your wife, your kids; some of the travel and experiences you guys have had.

Goldman: We include in the book, because it's absolutely part of the story -- I think John Lennon said, "Life is what happens to you when you're making other plans."

We were building this business, and life was happening. All of the risk was part of it. The family was involved. I think I did my best to shield them from the risk, but every time I'd come home and take a deep breath and my wife Julie would say, "Oh, what's the matter?"

I'd say, "Oh, ..."

She'd say, "I don't want to know. I don't want to know!"

Then that same middle son was the one who really pushed me to create Honest Kids, because he saw me putting sugary drinks in his lunch box and he said, "Why are you giving healthy drinks to adults and sugary drinks to me?"

Then, for me, the most rewarding moments were when we got to the tea-growing communities and I got to share and they got to experience what we were doing in these communities, and to connect with nature in a way that is just remarkable.

Gardner: Give an example of one of those communities.

Goldman: Still the most meaningful for our family -- we traveled to Darjeeling to a community called Makaibari. It was the first organic tea garden in India. The whole way they lived in harmony with nature is just so different.

One example; my son was taking a shower and there was a scorpion in the shower. He screamed -- because he had seen enough movies to know when you see that tail -- he screamed, and he was running around with a towel on. The owner of the tea garden said, "Oh, no. I've got one in my shower, too. He salutes me every morning and we just live together." I sort of found that hard to understand.

Two-thirds of the land is still rain forest. It's just incredible; there's monkeys around, there's noise, there's such diversity versus when you drive by the nonorganic tea gardens. It's a monoculture; they're silent. There's bushes, but there's none of that feeling of the life, overwhelming.

One other little story from there was a real lesson for us. Through our Fair Trade partnership, we saw there was a computer learning center we had supported through Fair Trade funds, where these children who grow up in what are mud floor houses can access the Internet and computers. You say, "Wow. That's an amazing thing."

My oldest son -- who is a bit of an anti-technology person -- thought "This is terrible. You're corrupting them." He'd seen all his friends playing Xbox and said, "These guys have a chance to live in nature!"

It's an interesting question. I said to him, "Jonah, but they're going to have opportunities that generations of their parents never would have had." Interesting lessons.

Gardner: It's a beautifully illustrated book. During the period where you're brewing the tea -- the two of you in the kitchen with hairnets on -- I was wondering if you ever thought that you guys are the value-loving, purpose-driven version of Breaking Bad?

Goldman: Right, the professor and the student? I don't know who would be who in that one.

John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool’s board of directors. Tom Gardner owns shares of Whole Foods Market. The Motley Fool recommends and owns shares of Coca-Cola and Whole Foods Market and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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