Eat the Change, Learning From Honest Tea and Embracing the Journey
Eat the Change, Learning From Honest Tea and Embracing the Journey

"Climate change isn’t going away, and it may be an inconvenient truth that our diet really impacts us, but at least there’s some people trying to do something and trying to create awareness." 

- Seth Goldman

Elizabeth welcomes Seth Goldman, well-known figure and a pioneer in the world of sustainable and mission-driven brands. First, Seth takes us on a journey back to 1998 when he launched the very first organic and Fairtrade tea, "Honest Tea." He talks about the ups and downs of selling to Coca-Cola, which eventually discontinued the line last year. Seth shares his relaunch of the brand as "Just Iced Tea”, the value of enjoying the journey and the profound impact that what you put on your fork has on both your own health and the climate. Seth talks about his new brand Eat the Change and its mission to make a positive impact on the planet by promoting sustainable food choices and reducing the carbon footprint of the food industry.


    Elizabeth Stein 0:00
    Hi, everyone. I'm Elizabeth Stein, founder, and CEO of Purely Elizabeth. And this is Live Purely with Elizabeth, featuring candid conversations about how to thrive on your wellness journey.

    This week's guest is Seth Goldman, co-founder of Honest Tea, PLNT Burger, Chair of the Board of Beyond Meat, and most recently co-founder and chief change agent of Eat the Change, a planet-friendly snack brand that helps people snack to the future. Eat the Change recently launched Just Ice Tea, a line of organic bottled tea to go along with the company's mushroom jerky and carrot snacks. Seth has been widely recognized for his entrepreneurial success and impact including the Washington DC Business Hall of Fame, Partnership for Healthier America, CEO of the Year, organic trade associations organic social impact recipient, and’s climate visionary of the Year. I had so much fun chatting with Seth. In this episode, I look up to him from the very beginning of Purely for being such a pioneer in a mission-driven brand. In this episode, Seth shares the journey of launching Ice Tea in 1998 as the very first organic and fairtrade tea on the market, what it was like selling to Coke and then having Coke discontinue the line last year, and ultimately what propelled Seth to relaunch the brand as Just-Ice Tea. We talked about the lessons learned along the way, the importance of enjoying the journey, and how what you eat every day has the biggest footprint on our climate. I can't wait to see what Seth creates with his new brand, Eat the Change. Keep listening to learn more.

    Seth, welcome to the podcast. It's such an honor to have you on today. And I can't believe it took all these years for us to finally just meet at Fancy Future this summer.

    Seth Goldman 2:02
    Thanks, Elizabeth. That was a highlight of that show. Glad to have connected there.

    Elizabeth Stein 2:07
    Yeah, it was a total highlight for me. I have just looked up to you from the beginning. Read your book when it first came out in my early years of the business. And it was like, one day. So I'm so happy to finally meet you.

    Seth Goldman 2:21
    Thank you. Nice to be connected.

    Elizabeth Stein 2:23
    Of course, you've got so much going on. So much has happened over the last so many years. But of course, we need to start with your entrepreneurial journey and hear what your original inspiration was for Honest Tea.

    Seth Goldman 2:37
    Sure. I had always been an activist, always interested in getting involved in things I cared about. Before going into business school, I worked at a nonprofit. In Baltimore, I worked on Capitol Hill for a senator and then went to business school. Coming out took a job with Calvert, which does that socially environmentally responsible investing, I guess what we would call today ESG investing. And I liked it, but it felt a few steps removed from driving change because you're just allocating capital in publicly traded companies for the most part. And so I thought, what could I create that would help be more direct in terms of its impact? A lot of your listeners probably are ready to do something when the idea hits. I'm fortunate that I was being receptive to the idea. I had given a presentation for Calvert in New York City. And after a presentation, I went for a run. Run after the run, it was Thursday, and then went to a beverage called. And I'm like, wait a minute, there's still nothing here for me. There's all these drinks of it. They're all so sweet. They all have that same ingredient, which is corn syrup, and nobody's offering something less sweet. That was the germ of the idea. I brought that back to my business school, Professor Barry. But when I had been his student, we had agreed something was missing. This was now a few years later, there still was nothing being done about it. That was enough for me to say, I think I'm going to try doing something about this.

    Elizabeth Stein 4:08
    That's so cool. When you had that original thought with him back in business school, was it specifically in iced tea or beverage?

    Seth Goldman 4:15
    No, it wasn't. It was around juice and spritzers. So think about cranberry juice and Seltzer or something like that or Orangina, which isn't around as much these days, but a nice product just a little bit sweeter. That was the initial idea. Then when I came back to him, this was in 1997. When I reached back out to Barry after that run, he had just come back from India and he had come up with the name Honest Tea. That for me was a huge crystallizing moment, like that's a beautiful name. That could lead to a lot. And of course, because of my previous work with Calvert, I had an interest in doing business differently. And Honest Tea just by the name gave it the license to make sure we were doing that.

    Elizabeth Stein 5:04
    So as a mission-driven company, which was also I feel so ahead of its time then. I don't recall who else was it really in this space, but it feels like you were a pioneer. You were certainly in the beverage.

    Seth Goldman 5:17
    We were the first to do organic bottled tea which was around 2001. I guess, even in 1999 we brought out an organic bottled tea. And then we were the first to do Fairtrade tea which was in 2002. We were carving out early spaces, commercializing them, and as any time you're doing something for the first time, it's risky. It's challenging. But it worked out.

    Elizabeth Stein 5:42
    Yeah, for sure. So at what point in your Honest Tea journey, do you remember the moment when you're like, okay, I think we're going to make it and this is going to be a business? Or did it always feel like I don't know, I feel uneasy?

    Seth Goldman 5:58
    It was always shaky. Around 2007, nine years in, I feel, okay, we're getting enough traction. Now we're growing quickly enough, that there's interest, but we still weren't profitable. We were getting close to breaking even. Our approach had always been to never raise too much capital. We never like had a bunch of money, like, oh, we got this all set. It was shaky for the first 10 years. We were like, I think this is gonna work. We never wavered in our belief that this was worth doing. But as a business, gross margins initially were negative and sales were fast growing from zero. If you're not selling anything, and then all of a sudden, you're selling a million dollars, that's a lot of growth. But over 10 years, it just took a while to get that traction. Because once again, we were doing something new, so less sweet tea, that wasn't something people had an appetite for. Inorganic people didn't understand what it was. And Fairtrade people didn't know what that meant. So, all of those things we had to build.

    Elizabeth Stein 7:04
    And when was it that eventually after those 9-10 years changed, you start to feel like, okay, this is a sustainable business?

    Seth Goldman 7:15
    One of the big steps was getting Honest Kids up and running. That was our organic kids' drink. And one of the reasons is it showed we were more than just about tea. There's nothing wrong with being just about tea, but it showed the brand had legs. The idea of healthier, less sweet drinks was viable. And it also groups extremely quickly in mainstream channels like Target. That was wonderful to see. So, that helped. And in a way, it helped feed the tea business as well.

    Elizabeth Stein 7:50
    And then Coke came along. What was it like? I know there were several layers to that and that they had invested and eventually they purchased you. What was it like selling your baby?

    Seth Goldman 8:04
    I had already accepted that to scale this idea, we needed a partner who could take it further not from a management perspective, but from a distribution perspective. We were doing well where we had distribution, but there were whole parts of the country where we didn't have distribution. And as I looked at the map, I'm like, oh, my gosh, there's not a lot of distributors who would work with a brand like ours. We weren't beyond the natural channel. We'd love the natural channel, we had distribution there. But beyond that, it was going to be challenging. We knew we needed a partner like Coca-Cola to do that. Of course, our goal was always about the democratization of what Honest Tea stood for. It wasn't just to make it in a niche. It was really to make it available wherever beverages are sold. The other thing and this is a reality as entrepreneurs, when you take in money from someone who is not your own family, which we had done, and I'm sure you've done, you accept an obligation that you have to get that money back to those people, ideally, with a return on it. There was never an illusion that we were going to keep Honest Tea private forever. That's just the reality of what happens when you take in investment money. Then we had to find which is the best home, what's the best chance to scale this mission, and make sure our investors get their money back with some return. Then for me, it was who's the best partner. And it just turned out that the leadership at Coca-Cola at the time, was committed to expanding their business beyond just soda and expanding their customer base beyond just the mainstream, but to get into natural. We had a group of leaders who believed that Honest Tea would become their next billion-dollar brand.

    Elizabeth Stein 9:54
    And you stayed on for quite some time.

    Seth Goldman 9:57
    Coke invested in 2008. And then they bought Honest Tea in 2011, and I stayed on through the end of 2019. I shifted to halftime in 2015. But I was still very much championing what we were about. And I think the challenges that hit on his team came about. They were precipitated by the pandemic, but as I was wrapping up my time there, I would say they certainly weren't as focused on Honest Tea as I would have liked them to be, but there wasn't a risk it was going away. But by the time we got to the pandemic, they had supply chain challenges with their core brands, with Coca-Cola, so they had even less focus on some of the smaller brands like Honest Tea.

    Elizabeth Stein 10:43
    Well, I think one of the amazing things that I've heard you say is that, through that whole time, consumers are always worried about what's going to happen when a brand sells. And as a founder, of course, that's your stress. And you don't want that to change. But what I've heard you say is that Coke didn't change anything, which is such a testament to not only Coke, but to the brand that you've built, and the DNA that I think was so strong, that they knew they couldn't change it because you had created something so special. So I'd love for you to talk about and dive into your Fairtrade, your sourcing sustainability, and then we'll transfer into where that's going, part two of your life now.

    Seth Goldman 11:26
    But thank you for raising that because it is. First of all, as disappointing as it was to have Honest Tea discontinued, it's important to recognize Honest Kids is still thriving. It's still in McDonald's, Subway, Wendy's, Chick-fil-A, all these amazing, incredible retail stores. On its own, just in McDonald's with Honest Kids still being on the menu there, with the units we were selling, at least at the time I left we were removing over a billion calories from the American diet. And Honest Kids is, was, and probably still is the first organic product millions of Americans have.

    Elizabeth Stein 12:01
    That’s the accessibility that you've created.

    Seth Goldman 12:03
    Yeah, so that was a goal. And that's still happening. So, it's not a total loss. But you're also right. I think to Coke’s credit, they understood honesty as it was designed, literally what we say mission in a bottle that you can't tinker with that, and still call it Honest Tea. Although I never would have wished the brand to be discontinued, it was better for it to be discontinued with its integrity fully intact, than to have it taken apart piece by piece. Oh, let's try to find a cheaper ingredient than organic, or let's move away from Fairtrade. That would have been both tragic and sad. Those things are embedded in the brand. And so what we realized when I heard the news about honesty being discontinued was that…

    Elizabeth Stein 12:49
    Where were you when you heard that?

    Seth Goldman 12:51
    I know exactly where I was. I was in California. I had gotten a text over the weekend from someone I knew who was still coaxing, “Might you be free to talk to senior management about an important business issue?” Or whatever it is, there was something like that. But I could read through the lines that this is something about Honest Tea. This was in this was in 2022. I didn't have any business relationship with Coke at the time. I knew they'd only be doing this if something was going to happen to Honest Tea. It was May 23, that I got on this call with them. I asked well, what's going to happen to the brand? And I thought, initially, maybe they're just going to discontinue it from the red tracks, but keep it in the natural channel, because Honest Tea was still the best-selling tea in the natural channel. And I said, “Are you going to just walk away from that?” And they said, “Yes.” And I thought, oh, my gosh, that's a shame. And then it began to sink in. That's a shame. But it's an incredible business opportunity. Because that shelf space that we created, which is a viable business opportunity is just all of a sudden going to be available. And who should be taking that shelf space other than the folks who built it? the team we had, even in the early stage of the change was that core team. So I'm like, that makes sense. I still had to get over the fence because I told my wife after we saw this, “I'm never going back into the beverage business.” Not because I didn't love Honest Tea, but because it was just such a challenge. So stressful. But the more we just sat on this idea the other thing that got me probably more than anything was that we started to hear from our suppliers, the folks in the tea gardens. I had invested a lot of effort to get them to commit to organic and Fairtrade. And then they had made these investments. And all of a sudden we’re just abandoned and they found out about this news about Honest Tea from my LinkedIn posts. Then I just felt a tremendous responsibility that these folks and these communities shouldn't just be left abandoned like this. That plus the market opportunity, plus my team, plus even my family. My wife and I have three sons. To the extent there's a fourth son, it would be Honest Tea. And some of my sons were crying. They were like, “We know how much you cared about this. It's such a shame to see it go away.” A lot of those things brought me back in. I said May 23, is when we got the call. June 6 is when we, as a team said, we're gonna go do this. We decided on June 6. By September 6, 90 days later, we sold a bottle of Honest Tea at a restaurant, so it had a super fast scramble from the go decision to be in the market. Of course, it's got some of the stress, but there's so much more joy associated with this. Partially because we know what we're doing. Partially, because when you lose something like that, and you can’t get it back, you have a heightened appreciation for it. But also our team, who just are phenomenal. And we can appreciate all the work they're doing and accomplishing. I'm sure you can relate to this, that in an early stage, fast-growing company, there's inevitably some dysfunction and challenges. And this time around, we're all like a little late, we're not doing that this time. We're just like, we're mature enough, we know enough what we're doing. If there's a challenge or tension, speak it. Don't just swallow it, and then let it build up. Like we're gonna be upfront about it. Of course, we've grown so quickly, there's been plenty of that. I can't say there haven't been sleepless nights. There have been, but it's just a different feeling, with a lot more joy to it.

    Elizabeth Stein 16:55
    That's awesome. That's so great to hear, as you think about this next ride around, and you have your team with you, which is a huge testament to you as a leader that you've had all these people who want to go in for round two, which isn’t easy. What are some of those lessons that you can share with people? The amazing things that you have done as a leader, maybe some things that you might even want to change in round two.

    Seth Goldman 17:19
    That is a good point. The macro thing is that like karma is real. And if you treat people well and do extra right by them, there's no downside to it. You may not get a return on it, but you can feel good about it. And as we've seen in a lot of cases, they do feel good about it. One is you've got to embrace the full employee. So people go through life while they're working with you. Health issues, family issues, personal issues, and we've got to be there for them for all of it. One of the things we've done here with Eat the Change, which is little. Everyone's like, “We're doing this?” It's like, we have unlimited leave. Nobody's watching the clock on anybody. Some people are working at crazy hours, some people are working from remote areas, and everyone understands what's a count of their accountabilities and if they're performing. That flexibility, especially in this post-pandemic world matters a lot. We've had some here some health challenges and other things here, let's support them in every way we can. Because people aren't working for us 40 hours nine to five, we shouldn't just be supporting people nine to five. We've got to support them whenever and however we can. That counts. I think the other thing is having really clear goals that everyone's aligned on. When we started this process, we didn't do this in Honest Tea, but we had those objectives and key results (OKRs) super clear and transparent. At every meeting, we'll check in on them and make sure people understand what they are and how we're doing toward them is good. And that transparency piece, I share every monthly financial with the team going down what are the margins, what are the losses. I don't want anyone to be surprised if they say, “Hey, I've got to raise money.” They know because they knew we got to change a formula or we got to discontinue a product because they know the gross margins, they've seen the sales. So when you can give people that information, you empower them to both make their own decisions, but also to feel like they are part of this. And certainly, something we've always done is ownership of the company. Making sure that whenever we raise money, whenever we are creating new owners of the company, we're making sure our existing employees get ownership as well.

    Elizabeth Stein 19:44
    Yeah, those are all such great points. I think transparency is such an important one for people to feel like they know what's happening, not to be blindsided and just as much in it as you are, seeing the ownership piece of it. Talking about transparency, let's get into the supply chain, your sourcing and sustainability, and what that looks like. I watched your Mozambique video, which was so inspiring and didn't make me think about God, if you hadn't moved forward, and you have this huge farm, who's going to be buying from that?

    Seth Goldman 20:22
    Yeah, it is easily the most gratifying part of this business to feel like these communities, we can play a role in helping support them.

    Elizabeth Stein 20:30
    Let me just also touch on what Fairtrade is. I know everyone's heard that term, that definition.

    Seth Goldman 20:34
    There are two pillars. The first one is organic, everything grown without chemical pesticides, and chemical fertilizers, which is certainly better for the ecosystem, but also better for the workers. In tea, our tea leaves are handpicked. That means the workers are in the bushes and tea bushes grow up to about your shoulders. You'd be breathing in whatever is sprayed on those leaves. So for us, organic is a core piece of our ingredient. The other thing about tea that's unusual is that it's grown in some of the poorest parts of the world. Some of that has to do with the climate, which is certainly tropical, and also high elevation. But then because it's handpicked, it makes sense that it's grown in poor countries because it is a labor input. Coffee, tea, and sugar are some of the world's cheapest commodities, we said, if we're buying one of the world's cheapest commodities, we should be able to invest back into these communities every time we buy a pound of tea, and make sure that labor standards are being adhered to. No child labor, no prison labor, but also that a living wage, as defined by the International Labor Organization, is being paid. But where Fairtrade, I'd say, gets the extra plus, is that a portion of the sales of every pound goes back to the community into a council of workers for them to decide how it's invested. The reason that's so important is because the council reflects the community of workers. So with tea, because there's a lot of women picking tea leaves, we're giving women and others but especially women, economic resources, that give them a say in their community. So they get to decide how the money is invested. In the case of Mozambique, which is one of the poorest communities and countries in the world, they invested first in access to clean drinking water, and safe drinking water. Then they invested in ambulances to make sure that the community could have it could have access to some health care, then a school. In Zambezia province in Mozambique, over 40% of the kids never go to school, not just occasionally, just go to school. So you have to start somewhere. For us, these were high-impact opportunities. The tea is amazing. It tastes great, and all that. But we're excited about this partnership. This is the largest organic tea garden in the world. But it's such a poor part of the world that we can do this and we're still spending pennies a bottle. Our tea is premium price, but the biggest part of our expense is the glass bottle. I felt like well, let's make sure we can feel good about the tea. That's underlying the name Just Ice Tea is that commitment to supporting the people involved in the supply chain. I'll just say that we recognize there are still gross imbalances in wealth in the world, and we're not addressing all of them. But certainly, we're taking inordinate steps to do something to make sure this community is part of the value chain and gets to benefit from it more than the typical tea supplier.

    Elizabeth Stein 24:02
    Absolutely. It's amazing what you guys are doing. Part of your mission before starting Just Ice Tea was creating a new company, Eat the Change. We'd like to hear about the mission for that. I love your approach to biodiversity with that company. So, let’s hear about that.

    Seth Goldman 24:24
    So after I left Honest Tea, when I was still Chair of the Board of Beyond Meat, I was ready to create something new. I thought, well, since I'm not going into the beverage space again…

    Elizabeth Stein 24:33
    Never did that.

    Seth Goldman 24:35
    … let me think about other things I care about. And going back, climate change certainly is the defining issue of how we're going to live as a species. So what can we do? What I've seen is that our diet is our single biggest impact on the planet. It's great if you can recycle, and it's great if you can drive an electric car or even better a bike, but what you eat every day is the biggest part of your footprint. So how do we make sure, how do we steer people towards more planet-friendly foods? And that was where the name Eat the Change came from. If you care about changing things, you have to change what you eat. Initially, we started with a snack, I had a mushroom jerky. And then try to build on what we saw with Honest Kids. How do we get in the lunchbox? How do we create a healthier snack food for kids? And that was a real fun evolution where we thought initially, could we make a carrot chip, could we take a carrot, slice it, and make it as a chip? My co-founder, Chef Spike Mendelsohn, we couldn't quite get the right crispiness, the right profile. Then one of our suppliers sent us the wrong carrots. They were like the little coins. He's like, “I can make a chip of those.” But we have a no food waste policy at the office. So Spike tried dipping the carrots in what was initially a marinade, but then eventually he dipped them in fruit juice. Then when we dehydrated, they took on this chewy flavor. We realized that could be a really fun kid snack. That's called our Cosmic Carrot Chews. Their whole approach to Eat the Change was centered around organic everything, plant-based everything, and minimal food waste. So let's use crops that don't use a lot of water where there's no waste to the product. What's neat about the carrot juice is we're using every part of the carrot, not the greens. There's no piece of the carrot too small to use. We also had this commitment to diversity. Turns out, six crops are responsible for 57% of all agricultural production. And it's soy, corn, wheat, potatoes, rice, and sugarcane. We said we could make our recipes without those. Or at least I said that what's funny is that I would tell Spike, “Make the best-tasting food you can, as you did with the mushroom jerky. Now make it without those six crops, and you do that. “But wait, those are in everything.” And then he realized he had been a top chef and all those things. Okay, well, it’s just a challenge. He'd succeeded and we were busily building that snack business when we got the news about Honest Tea. And then we had to sort of go through the reflection. Well, if we were to launch a tea brand, could we do it as part of Eat the Change? When we had to reflect on organic plant-based for sure. Minimal food waste, or water waste, and there's no irrigation in tea. So it's a super water-efficient crop. Then we came upon that whole commitment around biodiversity. And we said, wait a minute, one of Honest Tea’s big ingredients was organic sugar cane. Now, it uses a lot less than other brands, but they still use a lot of it. And we said, no if we're going to have this as part of the commitment to the brand, we've got to do that. We used organic agave and organic honey, and we were able to develop the recipes with that. We put just the Eat the Change logo on the cap. We realize you couldn't take an iced tea brand and call it Eat the Change. That just didn't make sense. So we think now about Eat the Change, we think about this logo. Think about that Nabisco red triangle. It's the marker that unites the family of brands, but there are going to be different brands with different names under that umbrella.

    Elizabeth Stein 28:24
    And what's gonna come next? Is anything in the pipeline?

    Seth Goldman 28:30
    Right now we got to focus on the tea. We are scaling at it happening so quickly. So we'll certainly keep scaling that. The carrots, we are working on packaging, and going to update the packaging to make sure we communicate exactly what's there. But for now, we have to make sure we can execute what we've got. We can innovate and Spike can innovate every month, we could bring something new online. But let’s make sure we can succeed with what we've got for now. And that will help steer us. One of the things is one of the balances and I'm sure you've seen this as an entrepreneur, you know where you'd like to go, but the marketplace may have another opinion. So, you've got to listen to the market and evolve as it evolves.

    Elizabeth Stein 29:11
    Yeah, totally. I was gonna say what are some of the lessons that you've learned this second time around, granted it's only been a year. But I'm sure there are 1000 lessons you've already learned and that you thought like, oh, I know how to do this, and then were surprised otherwise.

    Seth Goldman 29:24
    It's funny because you could on the one hand say, we're the Honest Tea folks, we’ll just go in and take all that shelf space. Like no, it wasn't left vacant. Others have gone in. So we have to go resell. Like nothing has been given to us and that's how it should be. So we have to earn our place, every shelf space we get. We work with a lot of the same distributors, even a lot of the same retailers. And so I'd say we’re lucky it used to give this much color space to Honest Tea, but you're only giving us that, and then it's a new brand. So, you gott

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