The Coca-Cola Company Signs Agreement for 40% Stake in Honest Tea
Coca-Cola Interest in Fast-Growing Organic Tea Company Gives Honest Tea the Opportunity to Reach More Consumers
The Coca-Cola Company and Honest Tea, Inc. today announced that the two companies have completed an agreement resulting in Coca-Cola holding approximately 40% interest in the fast-growing maker of certified organic beverages, including the best-selling Honest Tea(R). Coca-Cola may elect to buy, and the remaining Honest Tea shareholders may elect to sell to Coca-Cola, the outstanding interest not currently owned by Coca-Cola in the future. Financial terms of the investment were not disclosed.
"We started Honest Tea ten years ago with modest resources, but an ambitious vision for offering a new type of beverage - a delicious healthier drink produced with a consciousness about the way the ingredients are grown. As more consumers become aware of how their decisions impact the health of the planet and themselves, we are thrilled to receive this investment from the world's largest beverage company to help take our brand and our mission to a larger scale and wider audience," said Seth Goldman, co-founder and TeaEO, Honest Tea.
The strategic opportunity was identified by Coca-Cola North America's Venturing and Emerging Brands (VEB) Business Unit. "Honest Tea is on the forefront of the rapidly growing organic beverage business, and Seth Goldman and his management team have successfully anticipated and met consumer needs in this expanding category," said Deryck van Rensburg, president and general manager, Venturing and Emerging Brands, Coca-Cola North America. "This transaction is a superb example of our mission in VEB to seek out and invest in the best beverage entrepreneurs and the highest growth-potential beverages."
Honest Tea was started in 1998 when Goldman and his co-founder, Barry Nalebuff, brewed samples of tea in Goldman's Bethesda, MD home and brought them to the regional office of a natural foods chain. Since then, the brand has become the top-ranked tea brand in the natural foods channel (according to SPINScan) and has begun to expand into mainstream grocery and convenience stores. "This is our chance to bring organic beverages to the mainstream," said Barry Nalebuff, co-founder and chairman, Honest Tea. "Customers will get to discover that they can have it all - great taste, less calories, and organic. Honest." In 2005 the company created Honest Ade organic thirst quenchers, and in 2007 it launched Honest Kids, a line of low-calorie organic thirst quenchers sold in 6.75-ounce pouches.
"The knowledge and access that Coca-Cola North America and its distribution system can provide comes at a perfect time as Honest Tea is at an exciting inflection point. I look forward to helping Seth and the team continue to build the business the right way in the years ahead," said Gary Hirshberg, president & CE-Yo of Stonyfield Farm and longtime board member of Honest Tea. Hirshberg will continue as a member of Honest Tea's Board.
About Honest Tea
Honest Tea is the nation's best-selling and fastest-growing organic bottled tea company with a mission to make great-tasting, truly healthy organic beverages sweetened with less sugar and calories than most bottled drinks. The company has been repeatedly ranked in Inc. magazine's annual list of the 500 Fastest Growing Companies in the United States. Honest Tea's product line includes Honest Tea ready-to-drink teas, Honest Ade thirst quenchers in plastic bottles, and Honest Kids pouch drinks. All varieties are certified organic. For more information, visit www.honesttea.com.
About Venturing and Emerging Brands
Venturing and Emerging Brands (VEB) is a dedicated operating unit of Coca-Cola North America charged with identifying high-potential growth brands in the North American beverage space for investment or ownership by The Coca-Cola Company and exploring potential synergistic relationships with these investments. With direct access to the global resources and industry expertise of The Coca-Cola Company and its system, VEB is uniquely positioned to develop emerging beverage brands of The Coca-Cola Company to their full potential.
About The Coca-Cola Company
The Coca-Cola Company is the world's largest beverage company. Along with Coca-Cola, recognized as the world's most valuable brand, the Company markets four of the world's top five nonalcoholic sparkling beverage brands, including Diet Coke, Fanta and Sprite, and a wide range of other beverages, including diet and light beverages, waters, juices and juice drinks, teas, coffees, energy and sports drinks. Through the world's largest beverage distribution system, consumers in more than 200 countries enjoy the Company's beverages at a rate exceeding 1.4 billion servings each day. For more information about The Coca-Cola Company, please visit our website at www.thecoca-colacompany.com.
Source: The Coca-Cola Company and Honest Tea, Inc.
Released February 5, 2008