Coca-Cola Buys 40% Share of Honest Tea: Buy In or Sell Out?

Coca-Cola, the world’s largest beverage company, is now the largest shareholder in the small and organic beverage company Honest Tea. Is this a “buy in” to help the Honest Brand or is Honest selling out to the large corporations?

My knee-jerk reaction to this news was a feeling of disappointment with my favorite bottled beverage company. Et tu, Brutus? How could you?! But as I read the owner’s blog posted on the Honest Tea website dated Feb 5th, (http://www.honesttea.com/blog/index.php/category/from-seth-and-barry/) I realized that this is a much more complicated issue than just wanting to make more money or "sell out."

Honest Tea wants to spread their brand and distribution, and with Coke’s help, they can infiltrate the market in ways it cannot do alone. They have no plans to change their mission, which is to be a company that strives for authenticity with a product that says what it is and is what it says, uses organic ingredients, and strives to cut down on the “empty calories” Americans consume with other conventional teas and sodas (since Honest contains only a fraction of the sugar other conventional beverages have).

This is why Honest decided it was a good idea to have Coke be the largest shareholder, because, in the words of the owner/founder “When we buy 2.5 million pounds of organic ingredients, as we did in 2007, we help create demand for a more sustainable system of agriculture, one that doesn’t rely on chemical pesticides and fertilizers. But when we buy ten times that amount, we help create a market that multiplies far beyond our own purchases.”

Other small, eco-friendly companies have already pounced on the corporate carrot: Clorox bought Burt’s Bees, Colgate bought Toms of Maine and General Mills bought Cascadian Farms. Is this a bad move or the start of a paradigm change in the way goods are manufactured and produced on the mainstream level? On one hand, I think that organic farming can be given a boost because large corporations have the distribution and market share to bring organic more to the mainstream.

On the other hand, if these companies start ruining a good thing by buying from foreign markets or having their products or packing manufactured overseas, it’s not a good thing. The carbon cost of shipping resources and products back and forth just seems to eliminate the benefits of having an organic “eco” product.

It can’t be a bad thing if the overall percentage of industrial conventional agriculture is being replaced by organic agriculture, industrial or not. These companies aren’t simply taking over a company and changing the ingredients or dissolving the competition by taking the product off the market. They are continuing the product “as is” and increasing the marketshare and distribution into more mainstream grocers, like Safeway, Wal-Mart and Target.