Honest Tea: Seth Goldman

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In this paper, the selected podcast is Honest Tea: Seth Goldman. This podcast provides details from Seth Goldman on how he and his partner created a beverage that was different from what was offered in the market by other manufacturers and gained a large share of the market within a short period of time. This podcast was created on June 11, 2018.

According to the podcast, Seth came up with the idea of creating Honest Tea. The conception of the idea was from the demand of a drink with little sugar. One day in the year 1997, Seth had just completed a long run during an exercise session. He was desperately in need of a drink and went into a store. However, Seth could not find a perfect drink for his condition. All the beverages on the shelves were sugary drinks (Guy, 2018). According to Seth, the sugar amount in these drinks was too much. Due to frustration, Seth did not buy any of the drinks. During that moment of need and frustration, the idea was conceived. Seth identified that the market lacked beverages with low sugar levels. He saw a gap in the market and this presented him with an opportunity to invest. Goldman consulted with his college professor. The two had worked on a case study about the beverage industry and realized that there was a gap in the market. Goldman started Honest Tea right away. He used the money he had just received from his father's investment into the business. His partner, Barry Nalebuff, also contributed some amount but did not commit to the company as he continued with his day job. Goldman left his job at a finance firm and focused on the company (Guy, 2018). He created a business plan and started selling his idea to the investors.

The two partners made the product samples at Goldman's kitchen and packed them in thermos flasks. The product was accepted by Whole Foods Market and an initial order of 15000 bottles was placed (Guy, 2018). The initial production was done from a rented apple juice company. The other task was marketing the new product. This involved giving out many free samples since people did not know what it was. However, the marketing campaign was successful because Honest Tea was one of the best-selling beverages in Whole Foods Market retail stores by the end of 1998. The company had established its bottling plant and expanded its market by acquiring more retail stores for displaying their products. In the year 2008, Coca Cola purchased part of the company and eventually acquired it in 2011 after rapid success (Guy, 2018). Honest Tea products are now in over one hundred thousand stores.

One of the challenges Goldman and his company faced is the shortage of capital. During the start-up phase, the company was spending a lot of money on product promotion and the returns were limited. This presented operational difficulties. The sales strategy involved giving out free samples (Guy, 2018). According to Goldman, the number of free samples given at one time exceeded what the company sold in the market. What makes this problem stand out is how the company improved its financial situation within a short period of time. The solution to this challenge stemmed from the choice of market entry strategy. Honest Tea brought a new product to the market and hence enjoyed the benefits of product differentiation. This is personal to me because I believe that for a product to thrive in a competitive market, product differentiation is the best marketing strategy. In this case, the differentiated beverage brand held a competitive advantage over the rivals.

For me as a potential entrepreneur, one of the most significant takeaways from the podcast is perseverance and patience. This implies the resilience of an entrepreneur to the challenges that face a new business before it can finally start thriving. The successful businesses did not start as big corporations. They came from somewhere and have grown and broadened their base with time. As Goldman indicates, the success of Honest Tea company did not occur overnight. The entrepreneurs persevered many difficulties and were patient enough to steer the company through the hardships (Guy, 2018). Starting from a home kitchen, presenting samples in unbranded bottles, giving out free drinks, and getting rejected at times required the investors to be persevering and patient.

One thing from the podcast that is connected to the course is that an appropriate marketing strategy is vital for the development of the business. An entrepreneur may create a good product, but the returns would be realized only when the customers purchase the items. Turning ordinary people in the community into customers that would buy the products requires a good marketing strategy. From the podcast, Goldman and his partner developed a new brand and people did not know about it. Therefore, the sale returns of the company depended on the success of their marketing strategy. Honest Tea marketing campaign involved selling the brand by giving free samples which resulted in business success.


Guy, R. (2018, June 11). Honest Tea: Seth Goldman. [Audio podcast]. Retrieved from https://www.npr.org/2018/06/08/618252345/honest-tea-seth-goldman

September 18, 2023


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