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The 3 Things Consumers Want

By Motley Fool Staff and Tom Gardner - Mar 17, 2014 at 9:00AM

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Taste, health, and convenience: Can one company deliver it all?

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 ( KO 0.89% ) .

In true Tom Gardner fashion, the "final" question is actually three: Goldman shares his views on what consumers want, what he feels is his driving force, and what enlightened beverage consumption will look like in 20 years.

A full transcript follows the video.

Tom Gardner: Last couple of quick questions from me, then we turn to the people who have great questions, in the audience. What innovations do consumers care about with beverages? Which ones do you go for because you believe in it but the consumer's not going to notice? Which ones do you think consumers either wake up to, or are asking for right now?

Seth Goldman: The obvious ones are when you can combine taste and health. We just launched a line called Honest Fizz, a zero-calorie, naturally sweetened soda line that's done really well. It's being able to enjoy taste and flavor, and of course if it can be naturally sweetened or organically sweetened, that's a positive.

I think the other one is convenience. I'm not pointing the finger, but the fact is, consumers still like to have drinks on the go.

The one thing that's interesting, that we just started to do now, is sell in restaurants. Freshly brewed tea in restaurants is something that we're just starting, and we're really excited about that.

Gardner: My final question is what, Seth, at this point is motivating you? Most people who sell their businesses are no longer working at those businesses. Then there are companies like Berkshire Hathaway, where the acquisition happens and management stays. You stayed. You're making progress. It's been a great last couple of years since the acquisition for you all. What is driving you right now, and your team?

Goldman: The same things that drove me to start it. We have this incredible challenge in our country, and this is one step of how to address it. The other steps are the other things we can do with our business and we can do with our book. We can encourage and create a next generation of entrepreneurs.

And then the work that I do beyond Honest Tea; really, for the whole first year, all of the author proceeds are going to different charities. In tonight's event, we supporting a wonderful group called Urban Alliance which takes low-income high school students from Alexandria, and places them in professional job internships and puts them on a path to college.

This idea of, if we're in the wrong direction, anything I can do to get us in the right direction -- that's within by bandwidth; because there's only so many things I can address! I want to take steps to do that.

Gardner: I said that was my final question, but here's my final, final question; 20 years from now, what does the enlightened beverage drinker look like? What is enlightened beverage consumption?

Goldman: Well, I certainly believe and hope over 25% of the market will be organic. I would be surprised if the average calorie profile was more than 50 calories per 8 ounce serving.

The sweeteners are evolving a lot, quickly. Five years ago, there were no zero-calorie, natural sweeteners, and now you've got stevia. You've got erythritol. There's another one called the luo han fruit. I think there will be more zero-calorie, natural sweeteners.

I also think that the single-serve container is going to be much less prevalent. You'll see more in-home drink capabilities. Maybe it's out of your refrigerator.

Gardner: SodaStream?

Goldman: SodaStream, but even different than that, where your drinks actually come in cartridges. If you've seen the Freestyle machine that Coca-Cola has -- when you reload that, it looks like printer cartridges; bringing that into the home.

Gardner: Awesome.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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