chapter  13
4 Pages

Honest Tea and Coke: an unlikely couple


Honest Tea is a bottled organic tea company based in Bethesda, Maryland. Founded in 1998 by Seth Goldman and Barry Nalebuff, Honest Tea, with over $47 million in revenue in 2009 and products in tens of thousands of stores across the US, has blossomed into one of the best-selling organic teas in the country. 2

Honest Tea was born as a result of a lack of alternatives to sugary drinks that failed to quench one’s thirst. Goldman, an active person who drank a lot of liquids, would experiment by combining several different beverages to cut the sweet and intensify the fl avor. After several failed attempts to create a mix that would quench his thirst, Goldman concluded that he would have to create an original drink. He contacted Nalebuff, one of his business school professors at Yale, who also shared a passion for the idea of a less sweet, yet tasty beverage. Coincidentally, Nalebuff had just returned from India where he was examining the tea industry for a case study. What he found was that most of the tea purchased for bottling in the US was made from lower quality dust left after quality tea had been produced. This presented a prime opportunity to create an all-natural brand with real tea leaves.