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Seth Goldman ’95MPPMThe idea for a company that would sell bottled iced tea with just a little sugar, instead of the usual handful, started brewing at the Yale School of Management during a class discussion of a Coke-vs.-Pepsi case study. After SOM professor Barry Nalebuff and his student, Seth Goldman ’95MPPM, launched Honest Tea in 1998, the beverage maker has itself been cited as a case study of entrepreneurship and business with a social mission. Now Goldman, Honest Tea’s president and “TeaEO,” finds himself on display as a New York Times small business case study in—well, honesty. Honest Tea sells organic iced teas and juices, sweetened lightly or not at all. Two years ago, it sold 40 percent of its stock to Coca-Cola, which purveys—you know, other kinds of drinks. Investor Coke has taken exception to the marketing of Honest Kids, Honest Tea’s line of fruit punch, because it bears the label, “No high fructose corn syrup.” (“Executives at Coke construed the phrase as an implicit rebuke of its products,” says the Times.) “We got a strong request to change the wording,” Goldman told the paper. He didn’t care for Coke’s proposed alternatives, which included “No fake stuff.” It’s not clear that the disagreement has been resolved. The Honest Kids label hasn’t changed, at least according to its website. But next year, Goldman acknowledges, it is “very probable” that Coca-Cola will exercise its option to buy Honest Tea outright. In which case the company with the motto “Be Real. Get Honest” could be swallowed by the beverage formerly known as “The Real Thing.”
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