Honest Tea: It Ain't Easy Being Mission-Based

Honest Tea is one reason why the traditional bottling companies, such as Coca-Cola and PepsiCo, are watching the sales of their carbonated drinks flatlining. Consumers are increasingly on the hunt for something more healthful or interesting than the cola, lemon-lime and neon colored fizzy drinks that have been the standard beverages of choice for generations. Add the fact that millennials are largely avoiding the snacks and beverages favored by their parents and grandparents, and PepsiCo and Coca-Cola have found themselves forced to adapt to a new market reality. Or, in the case of Coca-Cola, it simply bought a stake in Honest Tea--and then purchased the firm outright in 2011.

Honest Tea may now be a wholly owned subsidiary of Coca-Cola, but the organic tea and infusion bottler marches to its own drum. The firm, based in Bethesda, Maryland, recently issued its annual sustainability report, touting the achievements and challenges faced by the 17-year-old brand.

The company is growing: 30 percent, in fact, which is an increase any food or beverage brand would envy. With that growth has come more opportunities for tea growers and organic farmers. Honest Tea purchased 6.7 million pounds of organic products in 2014, a 280 percent increase since the company first disclosed those figures in 2009. Fair trade premiums paid by Honest Tea now total over $200,000 annually--although critics of the fair trade certifying organizations will point out this is a firm that generated about $130 million in sales during 2014.

Two of the estates in India from which Honest Tea purchases its tea have seen a lifestyle difference, with fair trade premiums allowing new purchases, from basics such as mosquito nets to funds for a local hospital and orphanage. But while more consumers are demanding that their products are more ethical, either by organic certification, fair trade approval, or both, Honest Tea says it is transparent about when such a move is not always possible. The basil varietal tulsi, for example, has become more popular for its fragrant scent and slightly sweet taste. Honest Tea is one of many companies now marketing tulsi, but any certification will have to wait. Tulsi, according to Honest Tea, is still not in demand enough anytime soon to generate the volume at which fair trade certification becomes economically viable.

Buying containers that have either plant-based or recycled content is also an example of where Honest Tea had to make a tough choice. The demographic buying Honest Tea also wants those 16.9 ounce containers to be more sustainable--and since Honest Tea products are mostly sold in single serving containers, the company sparks its fair share of consumer guilt due to all that waste. But a “plant bottle” is not going to happen for a while, according to the company. Honest Tea says its tea blends are brewed right before they are bottled, and therefore its products require containers that can withstand more heat and pressure. Those juice boxes, popular with kids, also pose their own waste diversion challenge--but Honest Tea partners with TerraCycle, and says the material used in its pouches are recyclable in 50 percent of America’s municipalities. Honest Tea backs up this claim with some pretty impressive numbers, but they are a cumulative total of what TerraCycle has collected, not figures on behalf of Honest Tea.

Overall, being a regular customer of Honest Tea is a benign choice--one isn’t saving the world but not causing bad behavior in some faraway land. The company churns out quality beverages that are low in sugar, and its managers are savvy enough to change its product mix to keep consumers interested. With its green tea now at Wendy’s and zero-calorie carbonated drinks now available on supermarket shelves, Honest Tea is poised for more growth--and walks the walk as a responsible company that is about as genuine as the products it sells. In the meantime, it is making more fans, including a loyal devotee who lives only a few miles away on Pennsylvania Avenue. Image credit: Honest Tea