Kate GrossmanA Fellowship With Honest Tea
I knew I was going to have a great summer as soon as I walked in the Honest Tea door. The office is situated near a metro, in the heart of Bethesda. It is a big loft space with signs to draw attention to the sustainable features of the office- the bamboo floors, windows that actually open; the office has an open floor plan for light, recycled glass countertops, and showers in the bathroom. I had wondered how eco this company was because the website didn’t say too much, but my first glance around assured me that these were my kind of people.
Honest Tea is growing at a phenomenal rate. Seth Goldman, the founder and TeaEO, built a product for an underserved segment at just the right time. The company was founded 10 years ago and put the first “just a tad sweet” and unsweetened organic iced tea on the market. Some people would label Honest Tea as a triple bottom line business, defined as a company that accounts for not only its profits but its effect on the people in the value chain and the planet. Earlier this year Coke bought a 40% stake in the company as the flagship of its efforts to capitalize on growing consumer environmental and health concerns. “We need to learn from how you do business,” Coke execs tell Seth. At Columbia I have been working toward “greening” my business degree; this summer is an opportunity to see how- and if- it is possible to scale sustainability.
Only three hours in to my first day I was on a one-on-one field trip with Seth to a video interview he had. I felt like I had been given an all access pass and it was clear right then that I had chosen the right internship. In addition to a behind the scenes look at the beverage business, I knew I would have my own project for the summer, but I found out I would actually have three projects plus whatever else popped up. I am analyzing two new products- one an extension and one a move into a new market- to determine if they are viable. I also am working on a sustainability project to close the loop in our manufacturing process. All three projects seem interesting and will allow me to use skills I learned this past year. I am looking forward to delving in . . .
Diary 2:
I have been at Honest Tea for a month now. The office is full of great people, all busily building our brand and hitting new record sales each month. As I mentioned previously, the company is growing quickly. Most people in the office have been here less than six months. The first week I worried a bit that I might not have enough guidance and interaction and maybe this would be an internship where they weren't really prepared for an MBA. While I thought I could learn a lot from my projects, I really wanted to know about the whole business. Luckily, those fears were unfounded. Seth has an MBA, so he understands what I need to get out of this summer. Last week I sat in on a top management meeting where we forecasted numbers for the year. Where else would you get this type of access?
Seth is open to exposing me to every side of the business. For example, earlier this week I met him at his house - at 3:30a.m! We had to travel to one of our new manufacturing plants a few hours away. It was well worth a day's less sleep. In fact – Wow! It was fantastic. We still had to perfect the tea being made at this facility, so in between touring the plant and watching hundreds of bottles a minute be filled with tea, we tasted various versions and decided if they were acceptable for bottling. My tea taste testing skills still need some polishing, but tea tasting is surprisingly like wine tasting. And because we are entrepreneurial, bare knuckled and small, we drove back to Bethesda in the afternoon and worked for the rest of the day.
My projects are going well. I am enjoying watching what I've learned in class be played out in front of me. I had the five forces on my computer screen the other day as I double checked to make sure I had hit on all in my report. Last week I had a flashback to the Beer Game when we were discussing inventory difficulties - I shook my head in an understanding way, my team had a lot of inventory at the end of the game but never when we needed it. I love that I am not confined to just one department; every day I learn about a myriad of topics: marketing or operations, the beverage industry, what natural flavoring actually means or even how to make good tea. And just when I get a bit fidgety from staring at my computer, someone shouts delivery and I head out to the loading dock with my coworkers to unload the Canada Dry truck full of Honest Tea. In addition to "regular" responsibilities, it's all hands on deck when the product that we drink in the office and use for donations and sampling arrives. I suspect not too many of my classmates will be unloading 400 cases of tea this summer.
Diary 3:
My internship at Honest Tea is nearing its end. Over the summer, I have gained valuable knowledge about the meaning of a green and/or triple bottom line business. I wanted this internship, and in fact came to business school, because I think that big shifts- like tackling climate change or cleaning up supply chains - will happen because of the for-profit sector (thanks to consumer demands). And so I came to Honest Tea.
Much of my experience this summer has reinforced the notion that business is business. At the end of the day, if Honest Tea is not selling its product, then everything else it does is irrelevant. Like any consumer packaged goods company, the truly relevant bottom line, even in a triple bottom line CPG, is sales, sales, sales. The daily tasks of running a successful business aren’t sexy. It can be frustrating because I want to feel like we are improving the world right now, but I remind myself that all of these little actions add up to bigger changes - Rome was not built in a day. And green business is about improving business models, not doing away with business.
Today is the Wild West era of this movement. There are no agreed upon standards, regulations or even long term studies to make the case for what makes a business a green or triple bottom line. Honest Tea’s products, which use all organic ingredients and limit sugar levels, have a core impact on society. Every bottle sold means an organic tea plantation is making money and its workers are not being exposed to harsh chemicals. The consumer is also not drinking pesticides. The daily tasks of every Honest Tea employee are thus creating positive effects.
So what if Honest Tea stopped there - which they don’t? Would it still be green if it did not examine its packaging or energy use - which it does? While I would like sustainability to filter into every decision this company and all others make, we are not there yet. But when I step back and look at the big picture, it is breathtaking to see the shift that has begun and I can see that all of those little daily tasks have actually influenced other players in the market, and changed the game.
