By: Andreya Peru

1. By: Andreya Peru

2. Honest Tea • Founded by Seth Goldman and Barry Nalebuff • Goldman and Nalebuff share a passion for a less sweet but flavorful drink • Goldman realizes he’ll have to make this drink himself • Nalebuff returns from studying the tea industry in India • Goldman quits his job • 5 weeks later brings thermoses of tea and a mock up bottle to Whole Foods where the buyer orders 1,500 bottles

3. BMC for Honest Tea 1999 • Brewing Tea • Bottling Tea • Partnerships • Distributors • Cafeterias • Higher end food service companies • Marketing • Suppliers • In-store samplings • Giving people a healthier beverage that provides genuine natural taste without the artificial sweeteners and preservatives • Low in Calories • Health benefits • Cultural experience • 60% women, 40% Men • Ages 30-65 • Live in urban area • Graduated college • Current bottle tea drinker • Interested in outdoor activities • Average income: $52,000 • Free coverage • Articles • Loyal celebrity following • Crow Tribe • Tea • Tea Growers • Distributors • Facilities • Partnerships • Buying, Bottling, Brewing tea • Facilities • Shipping • Distribution • Bottles of tea • Varitea packs • 5 flavors

4. Value Proposition • Giving people a healthier beverage that provides genuine natural taste without the artificial sweeteners and preservatives • Low in calories • Health Benefits • Cultural Experience

5. Key Partners • Distributors • Cafeterias • Higher End Food Service Companies • Marketing • Suppliers

6. Channels • Free media coverage • Articles • Loyal following of celebrities • Crow Tribe • Honesttea.com

7. Customer Relationships • Looking for customers who are: • Experimental • Holistic • Aggressive consumer of cultural products • Desire authenticity • Disdainful of mainstream media • Offering in-store samples • As many as 8 times/month • Recycling Events • Word of Mouth

8. Customer Segments • Target Customer: • 60% women, 40% men • Median age 42, with a range from 30-65 • Likely to live near a concentrated urban area • Likely to have graduated college or have an advanced degree • Likely to currently be bottled water or RTD tea drinkers • Interested in running, hiking, and outdoor healthy activities • Average family income $52,000

9. Key Activities • Brewing Tea • Bottling Tea • Partnerships with distributors, Crow Tribe, and Tea Growers • Producing healthier beverages that are made with real loose leaf tea

10. Key Resources • Tea • Tea Growers • Distributors • Facilities • Partnerships

11. Cost Structure • Buying, Brewing, and Bottling Tea • Shipping teas • Facilities • Distribution

12. Revenue Streams • Single 16 ounce bottle: $1.19 - $2.00 • “Varitea” pack • 5 flavors

13. BMC for Honest Tea 1999 • Brewing Tea • Bottling Tea • Partnerships • Distributors • Cafeterias • Higher end food service companies • Marketing • Suppliers • In-store samplings • Giving people a healthier beverage that provides genuine natural taste without the artificial sweeteners and preservatives • Low in Calories • Health benefits • Cultural experience • 60% women, 40% Men • Ages 30-65 • Live in urban area • Graduated college • Current bottle tea drinker • Interested in outdoor activities • Average income: $52,000 • Free coverage • Articles • Loyal celebrity following • Crow Tribe • Tea • Tea Growers • Distributors • Facilities • Partnerships • Buying, Bottling, Brewing tea • Facilities • Shipping • Distribution • Bottles of tea • Varitea packs • 5 flavors

14. The Tea Market 4 Trends that fuel demand for Honest Tea 1. Explosive growth in ready to drink tea 2. Emergence of tea culture 3. Boom in natural foods 4. Rise of cultural creatives

15. Competitors • TeJava • The Republic of Tea • Tazo • All west coast companies • Their existence means there is a market for Honest Tea

16. Their Biggest Mistake • Thinking they were in the business of manufacturing tea • Spent too much money on their bottling plant because they wanted to maintain quality, lower costs, and have the ability to scale output • Distracted with production problems, broken manufacturing equipment, and labor disputes • Their long-term value is in the Honest Tea brand

17. Methodologies • Effectuation • Quick to actions • Brewed juice concoctions then pivoted to teas • Traditional planning and market research • Design thinking • Prototyped quickly • Brought thermoses and a mock up bottle within 5 weeks of starting

18. Product Development Cycle • Plant ideas • Seeds • Begin prototyping • Seed takes root • Tasting • Exposing the seedling to light 4. Launch • Tree is planted and has to face the elements on its own

19. Where Are They Now? • Currently carry 7 product lines • Over 37 flavors and products • Ranging from their original glass bottled teas to Honest Kids, Honest Fizz, and sports drinks • Bought by Coca-Cola in 2011 • 2015 they had 39 employees and $178M in sales

20. Resources • HonestTea.com • Seth Goldman and Barry Nalebuff’s Business • http://www.inc.com/seth-goldman/i-love-you-youre-fired.html • https://www.forbes.com/sites/ericwagner/2014/01/07/honest-tea-a-100-million-brand-15-years-in-the-making/#1991879e313a • https://www.cleverism.com/selecting-managing-channels-business-model-canvas/