Honest Tea Founder on the Future of Coke

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  )  .

Some people have told Goldman that he shouldn't work with major corporations like Coca-Cola and Wal-Mart. In this video segment he argues that huge corporations aren't going anywhere -- and won't be the ones to initiate change -- but mission-driven businesses like Honest Tea can help show the way.

A full transcript follows the video.

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Seth Goldman: The question was asked, where is Coca-Cola 20 years from now?

Tom Gardner: How is "Honest Coke" doing, 20 years from now?

Goldman: I think that Coca-Cola is still an icon. It is, as a brand, the world's most powerful brand. I think it's still an icon. It's probably a little more of an indulgence beverage, as opposed to an everyday occasion. I do think the usage of it will change. I'm sure the company will still be there.

I think another thing that's important to recognize -- because we had some people say, "You should never work with big companies. You should never work with Wal-Mart."

I said, "These companies aren't going away." They are the ones who establish the infrastructure. Coca-Cola has more trucks than UPS and FedEx combined. Someone asked the other day -- just to give you a sense of scale -- how many servings of Coca-Cola products are sold every day, if you were to make a guess? It's 1.7 billion a day. That's a lot. We sold, just by scale, about 200 million servings of Honest Tea last year.

Gardner: That's still awesome, though.

Goldman: So, we've got a long way to go, but these companies are there. You can curse the darkness or light a candle. Let's try to evolve.

The other thing I believe is that these big companies -- I talk about the change that needs to happen in our society -- big companies are not going to initiate the change. But entrepreneurs can initiate it and, if they succeed, big companies will invest in them and then buy into a different future.

Gardner: What's the one reason you think that Honest Tea succeeded in the category where big companies dominate so much? What are the factors?

Goldman: We were meaningfully different. We were not a "me, too" brand. There's always the pressure to make it sweeter, make it cheaper -- but because we stuck to that, we stood for something that was different. It wasn't something they could copy. It wasn't just the ingredients; it was the connection to the consumer. It was the reputation in the marketplace. It was the authenticity we had built and stuck to.


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