Honest Tea Joins The Coca-Cola Family

Honest Tea® and The Coca-Cola Company announced that The Coca-Cola Company has exercised its option to acquire the remaining portion of Honest Tea. The move completes a transaction which began three years ago when Coca-Cola, led by the Venturing and Emerging Brands (VEB) unit of Coca-Cola North America, purchased a minority stake in the company. Financial terms of the transaction were not disclosed.

Honest Tea, the leading organic bottled tea company, will continue to be based out of Bethesda, MD. In order to retain its entrepreneurial culture, it will operate as a stand-alone business under current TeaEO Seth Goldman, his management team, and current Honest Tea employees. Goldman and VEB have developed a unique operating model that allows Honest Tea autonomy to continue to run its day-to-day operations while accessing the scale benefits of the Coca-Cola system in various areas, including manufacturing and distribution. As part of the VEB team, Honest Tea will also begin to sell current VEB brands to the natural channel.

Under an innovative arrangement with The Coca-Cola Company, Goldman has chosen to reinvest most of his proceeds from the sale back into Honest Tea. Goldman's co-founder, Barry Nalebuff and Gary Hirshberg, CE-YO of Stonyfield Farm, will continue to provide informal guidance to Honest Tea as part of the Advisory Council.

Since receiving an investment from Coca-Cola, Honest Tea has made exciting progress in a variety of areas, including the expansion of Honest Tea distribution from approximately 15,000 outlets in 2008 to more than 75,000 today, the introduction of a ground-breaking Honest Tea plastic bottle that uses 22 percent less material, and doubling the number of offerings as well as the sales of organic, zero-calorie drinks. Additionally, Honest Tea has committed to transitioning its entire tea line of Honest Teas to Fair Trade Certified™ by the end of March 2011.

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 Fresh Fields (now Whole Foods Market). Since then the brand has become the top-ranked tea brand in the natural foods channel and has expanded into mainstream grocery and convenience stores.