OUR MISSION
Honest Tea creates and promotes great-tasting, truly healthy, organic beverages. We strive
to grow our business with the same honesty and integrity we use to craft our products, with
sustainability and great taste for all.
Table of Contents
I. Product
Organic
Ingredient Sourcing
Sugar Content
Fair Trade
Keeping it Honest
Page
3
3
3
4
5
5
II. Packaging
Plastic vs Glass
New Plastic Bottle
Other Packaging Materials
Keeping it Honest
6
6
7
8
9
Page
III. Planet
Organic
Carbon Emissions
Water
Waste
Marketing Materials
Honest HQ
Keeping it Honest
10
10
10
11
12
12
13
13
IV. People
Consumers
Employees
Keeping it Honest
V. Partnerships
Keeping it Honest
14
14
14
15
16
17
Seth
Company Meeting 2009
2
A LETTER FROM THE TEA-EO
Welcome to Honest Tea’s second “annual” Mission
Report. “Annual” is in quotes because although this is
our second report, our first examination of whether we
live up to our mission was written in 1998. Back when
the company was still being run out of my house, I
hired two wonderful Net Impact MBA interns – Beth
Bracken (U of Maryland) and Danielle Mihalko
(Georgetown). When they weren’t selling, delivering
and sampling tea, or finding office space, they wrote
the first analysis of how well Honest Tea lived up to its
mission. You can view that report at:
http://www.honesttea.com/community/sustainability/
2010missionreport/
Although Honest Tea’s Net Impact interns have
continued to measure our performance against our
mission over the years, we didn’t publicly share the
results. With “Keeping It Honest”, we commit to an
annual cycle of disclosing our progress, failures, and
areas of improvement. We are thankful to our 2010
Net Impact MBA intern, Taylor Brekke (USC), for her
help with this document.
Building our business requires us to work within the
contradiction of being a company committed to
sustainability, (sustain = uphold and nourish) that
operates in a consumer economy (consume = to
devour and destroy). Given this inherent paradox, we
do our best to stay honest about what we can and
can’t do, and we refuse to let the perfect be the
enemy of good.
We hope this publication embodies the same
attributes as our drinks:
• Not too sweet, but satisfying – this should not be a
cheerleading document, but rather one that
discloses progress, shortcomings and opportunities for improvement.
• Healthier – just as watching what you eat contributes to a better diet, we hope that our efforts to
track and report what we are doing will lead us, and
others in the beverage industry, towards behavior
that is better for the planet and the consumers we
serve.
• Organic – we seek to break down the elements of
our business to their granular elements—by identifying each ingredient of our business, we seek to
improve the overall business.
• And of course, Honest.
We welcome your feedback to this report. Though we
strive to live up to the “Honest” brand, our success
has always been in the hands of our customers,
suppliers and other partners. We wouldn’t be in business without you and we hope you will continue to
keep us Honest.
Honestly Yours,
Seth Goldman, President & TeaEO/Co-Founder
P.S. Many corporate social responsibility (CSR) reports include
extensive details on the metrics of sustainability, such as pounds
of waste, carbon emissions, water and energy use. And while we
have begun tracking some of these statistics, Honest Tea is still
very small relative to our competitors in the beverage industry. In
some other, less measurable ways though, our influence has been
outsized. As you’ll read in the pages ahead, we have helped spur
change toward lower-calorie beverages, toward organics and
toward more sustainable packaging efforts. As a result, our
mission doesn’t necessarily fit into the form of a standard CSR
report. And so we’re inviting you to take a broader look at how
we’re meeting our overall mission. In “Keeping It Honest” we
explore and report on how our social and environmental initiatives
relate to our Products, Packaging, the Planet, its People and our
Partners. In each of those five sections, we discuss our progress
in recent years, and more importantly, the challenges we still face.
A summary at the end of each section lays out areas in which we
expect to report on specific progress in the coming year. We hope
this report and the feedback we receive from it, will help us move
further toward realizing our mission.
Cheryl Newman, Deputy Chief of Mission
3
I. PRODUCT
ORGANIC INGREDIENTS:
What We’re Made Of
Total amount of EGCG
Honest Tea created the first certified organic bottled
tea in 1999 and today, everything we make is USDA
certified organic. Unlike other products, such as
fruits and vegetables, a tea leaf is never rinsed. That
means that if pesticides are used in the growing
process, they are likely to end up in the beverage,
and ultimately in the consumer. Organic tea is free
of synthetic chemicals, meaning fewer toxins for the
ecosystem, the people picking the tea leaves, and
the people who drink the tea.
Click here to watch how Honest Tea is made:
http://www.youtube.com/watch?v=pQk0O6Veeoc
EGCG: We don’t make claims about the health
benefits of antioxidants in Honest Tea, but it’s reassuring to know that numerous independent analyses show our tea contains high levels of the naturally occurring antioxidants found in tea, including
epigallocatechin gallate, better known as EGCG.
71mg
25mg
5mg
HONEST ORGANIC
HONEY GREEN TEA
16.9 oz
SNAPPLE ASIAN
PEAR GREEN TEA
17.5 oz
ARIZONA GREEN TEA
WITH GINSENG & HONEY
20 oz
Source: “Ask Men’s Health,” Men’s Health Magazine, June 2008.
SOURCING INGREDIENTS:
A Tea-scription For a Healthier Planet
In 2009, Honest Tea purchased approximately 2.4
million pounds of organic ingredients, including tea,
sugar and concentrates from 3,000 acres of
organic farmland all across the world.
en
Tea Garda
in Chin
Concord Grape Juice
Pomegranate
Apple Juice
Yumberry
Peppermint/Spearmint
Goji Berry
Orange Juice
White Tea
Green Tea
Oolong Tea
Agave
Hibiscus
Honey
Black Tea
Sugar
Sugar
Cinnamon
Açaí
Honeybush
Maqui Berry
Yerba Mate
Lemon Juice
Rooibos
Sugar
Seth
y
rr
& Ba
1998
1998
1998
Honest Tea founded
Landed first account
Fresh Fields (Whole Foods Market)
Sales: $250,000
4
SUGAR CONTENT: How Sweet It Is
Pounds of Organic Ingredients
Purchased 2007-2009
Back in 1998, Seth and Barry believed a refreshing,
lightly sweetened beverage was missing from the
beverage shelf. Twelve years later Honest Tea is still
delivering healthy, low-calorie beverages. Over this
period, the beverage industry has reduced its average calorie and sugar content, resulting in tea
brands moving from an average of 100 calories per
8-ounce serving to 60, and kids’ pouch drinks
moving from 100 calories per pouch to 75. Of
course, there are many factors fueling the shift
toward healthier beverages but the proven success
of our low-calorie varieties has served as a model
for healthier offerings and helped move the industry
in a healthier direction.
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
*In 2008 we took advantage of competitive green tea pricing to
build inventory for anticipated growth in 2009.
CAN A TEA COMPANY
BUY LOCAL?
THEN
The yerba mate used for Honest
Mate comes from an Argentine
family farm that practices sustainable
agriculture and encourages organic
growing methods by its neighbors. Since mate is a
crop that can be grown in the shade, our partners
are planting native trees in their mate orchards.
100
calories
(1998)
As a company, we source our peppermint, mint,
apple juice and some other ingredients from domestic producers, but we can’t do that with many of our
other ingredients. Tea, for example, organic or not,
doesn’t grow well in North America due to climate
and soil conditions. Although we ship our tea leaves
long distances, they’re lightweight and have a
relatively small environmental footprint. Many of our
other ingredients, like yerba mate, rooibos and açaí,
are indigenous plants that can’t be cultivated in the
U.S.
HONEST MATE
100
calories
AVERAGE CALORIES AVERAGE CALORIES
IN COMPETITOR’S
IN COMPETITOR’S
READY-TO-DRINK TEA
KIDS POUCHES
NOW
60
calories
75
calories
(2010)
JUST A TAD SWEET From our unsweetened
Just Green and Just Black Teas (no calories, no
sugar) to our “Just A Tad Sweet” drinks (50 calories
or less), Honest Tea makes it easier for people to
enjoy lower calorie refreshment. On average, our
plastic-bottled beverages have 22 grams of sugar
per bottle and our glass-bottled beverages have
12.75 grams per bottle. Other sweetened bottled
teas on the market have an average of 42 grams of
sugar per bottle.
1999
1999
Introduced First Nation Peppermint,
world’s first certified organic bottled tea
Sales: $1.1 million
2000
ole
m, wh
Premiutea bag
f
lea
Introduced tea bag line
5
WE’VE INCREASED OUR
FAIR TRADE OFFERINGS
FROM 3 to 17
Here are a few Makaibari projects supported by
Honest Tea:
FAIR TRADE:
What Does the Fair Trade
Label Mean?
The Fair Trade Certified™ logo on a food product
means the people who work in gardens or farms
where the ingredients come from receive a share of
the profits. It also means the working conditions meet
criteria set by Fair Trade USA (www.fairtradeusa.org)
including minimum wage levels, freedom of association and environmentally sustainable agriculture practices. Honest Tea’s Fair Trade premiums are invested
in a variety of projects, including ones at India’s
Makaibari Estate, one of the oldest tea gardens in
Darjeeling. The 240 acre Makaibari Estate is home to
610 workers and their families.
• Library upgrade
• Health training for villagers
• Hospitality training for the Homestay Programme,
where visitors stay with the villagers
• Stipends for university study
• Fund afforestation, mulching, rainwater harvesting and vermicomposting, using worms to turn
organic waste into high quality compost.
Fair
sponsor Trade
ed class
r
oom
ate
ari Est
Makaib as Unit
Bio-G
Seth at one of
our
Fair Trade tea
gardens
SUMMARY – KEEPING OUR PRODUCTS HONEST
Over the past 12 years, we’ve significantly expanded our certified organic, lower sugar offerings. That
growth has helped eliminate the need for thousands of pounds of pesticides and other chemicals
being introduced into fragile ecosystems, and helped drive the beverage industry towards healthier,
lower calorie beverage offerings.
We’ve also increased the number of our Fair Trade Certified™ products, but we
need to better understand and communicate the relationship between Fair Trade
premiums and their benefit to the growers. Over the next few months, we will
be working with Fair Trade USA to explore whether additional support
from Honest Tea will enable Fair Trade certification to more comprehensively
address the challenges of working conditions in the developing world.
2000
2000
2001
Fastest-growing RTD tea
in natural food stores (SPINS)
Sales: $1.9 million
Included on Oprah’s “O” List
6
II. PACKAGING
OUR BOTTLES
We exist in a contradiction. We are a company
committed to sustainability but the bulk of our products are sold as single serve packages, the majority
of which are not recycled. The production, transport
and waste created by our single serve glass and
plastic bottles are where Honest Tea has the
biggest environmental impact. And, there’s an
on-going debate about which is better for the environment – plastic or glass.
We believe each package has its advantages and
disadvantages, and we know that each has its own
group of fans and detractors. Honest Tea made
significant progress this year with respect to the
environmental impact of our packaging by reducing
the weight of our plastic bottle by 22%.
From: Donna S.
8 PM
Sent: Sunday, May 16, 2010 10:3
To: SethandBarry
Subject: so sad
reasons we first tried
any kind…one of the main
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We are so sad that you
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mor
much
honest bottle.
& attention,
Thank you for your time
Donna S.
From: Todd M.
Sent: Sunday, March 28, 2009 9:34 PM
To: SethandBarry
Subject: Great Product
...the other part I particularly liked was that it's in a plastic container. As you state on
the label, there are many places that glass cannot go. I work in one of them. I'm a deputy
sheriff currently assigned to the jail where I can't bring glass bottles. The plastic bottles
are perfect and get thrown in our big recycle bin when I get home after my shift. The fact
that the ingredients are organic or that there are supposedly health benefits to drinking
your products is secondary to me (but nice). Your products win with me based on how you
sweeten and how you package.
Sincerely,
Todd M.
We also include the following language on every
bottle label:
PLASTIC LABEL:
GLASS LABEL:
2001
2001
50% of SKUs gain organic certification
Introduced Community Green Tea
in partnership with City Year
2001
City Year ev
ent
Sales: $3.2 million
7
RECYCLING:
While our bottles are recyclable, the national recycling rate for both glass and plastic hovers just
below 30%. Through our partnership with Bethesda
Green, our hometown sustainability non-profit, and
with the help of Coca-Cola, we installed 15 recycling bins throughout downtown Bethesda, Maryland. In the first year of the program, recycling of
plastic and glass containers went from zero to
4,000 pounds. We hope to expand the Bethesda
Green model to cities across the U.S., urging communities nationwide to become active participants
in their local recycling initiatives. Seth also recently
joined the board of the American Beverage Association and is working with the ABA on an initiative
to increase national recycling rates.
LIGHTWEIGHT PET BOTTLE:
Don’t Judge A Tea By Its Bottle
Excerpt from Seth’s blog:
Over the past few years, we had been working hard
with bottle suppliers to find ways to decrease the
weight of our plastic (Polyethylene terephthalate or
PET) bottle…such a move (had the potential to
reduce) our consumption of PET resin - up to 1
million pounds on an annual basis. Another advantage of a lighter bottle is that it takes less fuel to ship
(before and after filling). And, of course, we save
money as well because the price of the bottles is
directly tied to the amount of resin in the bottle.
Introduced Haarlem Honeybush, in partnership
with a farmers’ cooperative in South Africa
I just bought a bottle of Orange Mango, and
was amazed that the bottle is so deceptively designed. The bottom of the bottle
has been designed with a hollow to displace
fluid, making it appear that the customer
is buying more than is the case. Yes its
16.9 ounces, but I'm sure your marketing
dept has determined that purchases are
based on visual impressions. I have bought
your product regularly, but will stop With
a name like Honest Tea, I would expect more
than these types of cheap tricks!
My partner Barry responded with a detailed note:
In 2009, Honest Tea’s plastic bottle lost 22% of its
weight, marking the single largest improvement we
have ever taken in terms of reducing our environmental impact. That new bottle also includes a
minimum of 10% factory
waste. We worked closely
with our supplier, Graham
Packaging, to perfect the
new bottle. The design
proved to be somewhat
controversial and
prompted Seth to
address it in his
“Mission-Driven BusiOur new bottle
is
22% lighter
ness” blog for Inc.com.
2002
. . . we have been hearing from consumers who
think that the new bottle is our way of trying to sell
them more air. Who hasn't been disappointed to
open up a bag of chips and find out there seems to
be more air than chips? Here is a typical e-mail that
we received from a customer named John:
... We recently switched to a thinner
bottle, one which is 22 percent lighter.
This saves us money and saves the world
resources. The only problem is that the
thinner bottle had the risk of getting
dented. In fact, this was a real problem
that forced us to redesign the bottle...
Once we explained the physics of the bottle, John's
response was quite different:
Thanks for that explanation. I feel I may
have jumped to conclusions, but I'm glad I
wrote and didn't just abandon you guys!
The physics behind the design solution are
actually very interesting. Thank you for
taking the time to answer my concerns. I'm
glad to hear what it was all about. I will
continue to support Honest Tea!
We know that most consumers didn’t take the time
to write us, and hope we didn’t lose too many
customers because we took a major step forward
for sustainability but didn’t explain what we were
doing. To read Seth’s whole blog on the challenges
of introducing a new bottle, see:
http://www.honesttea.com/blog/2009/10/06/
dont-judge-a-drink-by-its-bottle/
2002
2002
Honest Tea becomes the best-selling
RTD bottled tea in the natural food industry (SPINS)
Sales: $4.6 million
8
OTHER PACKAGING MATERIALS
TERRACYCLE (www.terracycle.net)
CARDBOARD: Inch By Inch
When we launched Honest Kids in 2007, we were
faced with a packaging dilemma – recyclable drink
pouches did not exist and still do not. We partnered with TerraCycle to launch the Honest Kids
Pouch Brigade as a way to divert drink pouches
from landfills. For each pouch collected, schools
receive $0.02 and the pouches are upcycled into
bags and school supplies. Over the past 4 years, it
has inspired other brigades such as yogurt cups
and snack wrappers, and in 2009 our sponsorship
contributed $120,000 in support of the brigade
initiative. In 2009, TerraCycle collected 3.7 million
pouches to be upcycled into reusable products. So
far 9,000 items have been created from Honest
Kids drink pouch materials, including notebooks,
messenger bags, and pencil pouches.
2009 showed us how a seemingly small change can
make a huge impact. By decreasing the size of the
PET bottle trays (the cardboard bottoms the bottles
sit in when they’re transported) from 3” high to 2”
high, we reduced the amount of material used by
24%. Taking into account our June 2009 - June
2010 sales figures, this adds up to a 54,394 pound
reduction in cardboard or the equivalent of 272 trees.
Our case trays are also made from recycled materials. The average percent of recycled content among
all of our packaging trays is approximately 39%.
LABELS: A Work in Progress
The Honest Tea label uses inks that contain a blend of
naturally occurring plant oils. The label itself is made
from polypropylene, the industry standard for packaging and labels. There aren’t many merchandisingfriendly, sustainable alternatives available yet, but we
know this is something we need to continue exploring.
POUCHES
Our Honest Kids® thirst quenchers pouch is made
from a multi-layered laminated material. The innermost layer, which touches the beverage, is made
from LDPE. The outermost layer is made from PET
and has no contact with the beverage. Sandwiched
between the LDPE and PET layers is aluminum foil,
which also has no contact with the beverage.
2003
Introduced first Fair Trade Certified™
RTD tea, Peach Oo-la-long
Since the Drink
Pouch Brigade
s began:
• by42,6ot60heBrrigrgaoudes have been created at scho
ols and
ps
• 48,147,088 used kids drink pouches have been
• ju44ic9,e35po3ucofhesthese were used Honest Kids collected!
• m3,at55er5,ia0l13halbs sbeof defective pouch
en saved from
land
• dr69in,67k2polbucs heof defective Honest Kidfsills
s ha
from the wast ve been diverted
e stream.
$962,984.26 co
ntributed to ch
arities
Sour
•
ce: TerraCycle
2003
2003
Won “Dream Big Award”
by Inc. and VISA
Sales: $5.5 million
9
MULTI-SERVE BOTTLES:
Bigger and Better
We recently expanded our 64 oz. line to include two
of our Honest Kids drinks, which join two tea varieties. Feedback from many of our consumers told us
that their kids loved Honest Kids, but they were
going through too many pouches. While the pouch
is perfect for lunchboxes and to take on the go, the
64 oz. is a more sustainable container for at-home
consumption.
BEVERAGE TO PACKAGING RATIO:
Putting More in Less
15
Beverage Weight to
Package Weight in Lbs.
Our packaging improvements have resulted in a
more sustainable product to package ratio. This
means we are able to bottle the same amount of
liquid using less packaging. In 2007, across all of
our product lines, we packaged 7.2 pounds of
liquid for every 1 pound of packaging material.
Three years later, the ratio has improved to 12.8
pounds of liquid for every 1 pound of packaging
material, for an overall improvement of 77.25%
12
9
6
3
0
16 FL. OZ. 16.9 FL. OZ.
GLASS: 66.1% PET: 94.1%
64 FL. OZ.
PET: 96.5%
8.75 FL. OZ.
POUCH: 98%
Percentage of Liquid Weight in Total Package Weight
SUMMARY – KEEPING OUR PACKAGING HONEST
Despite our packaging improvements and support for local recycling programs, we have a lot of
work left to do. We still sell most of our drinks in petroleum-based packages. We hope to explore
plant-based resins, increased recycled content for our bottles, and novel alternatives to our kids’
pouches. We’ll also continue to explore other materials for our labels and packing materials.
While we don’t anticipate eliminating either glass or plastic bottles from our product lines, we are
eager to explore planet-friendly materials for our bottles.
2004
2004
2004
All varieties become
USDA certified organic
Introduced new line
of PET bottles
Listed on Inc. 500 list of fastest
growing private companies
10
III. PLANET
ORGANIC FARMING
From small family farms to large tea estates, Honest
Tea strives to partner with growers who practice
sustainable agriculture and cultivate their teas using
environmentally-friendly practices such as fertilizing
naturally with compost, mulching to prevent erosion
and releasing ladybugs to control insects, instead of
using pesticides. Organic farmers use sustainable
soil and water conservation methods, and their
practices are monitored by third-party certification
agencies.
TEA LEAVES: Waste Not, Want Not
It takes about 200 pounds of green tea leaves to
brew one 2,000 gallon batch of our most popular
variety, Honey Green Tea. That’s about 1,300 cases
and a lot of left-over tea leaves, so we worked with
our bottling plants to come up with creative ways to
re-use the spent tea leaves, instead of dumping
them in a landfill. We tried feeding tea leaves to
cows, but they didn’t seem to like the way they
taste, and it made them a little jumpy! All of our
bottling plants have implemented innovative ways
to reuse this waste, such as using the leaves in
mulch to amend the soil in a nearby apple orchard
and mixing the leaves with sawdust to fertilize blue-
berry pastures. We’ve also explored making biodegradable plant pots. We’re always on the lookout
for creative ways to use our brewed tea leaves and
would love to hear from you if you have any ideas –
send them to: [email protected]
CARBON EMISSIONS
ENERGY CONSUMED AS PART
OF OUR PRODUCTION PROCESS
Making a bottle of Honest Tea takes a lot of steps
and each step along the way uses energy.
In 2007, we started buying renewable energy credits (RECs) to offset the carbon emitted during the
production of our Jasmine Green Energy Tea and
have continued to do this every year since. This
year, we went a step further and calculated our total
2009 emissions at each stage of production for
both our PET and glass lines.
While we continue to purchase RECs for our
Jasmine Green Energy Tea, we’re aware of the
ongoing debate about the value of carbon offsets.
As a company we are more focused on finding
ways to reduce the amount of energy we use rather
than offsetting it.
Pick, Process
& Ship Tea
Procure Raw
Materials
Make the
Bottles
Transport
the Bottles
Brew & Bottle
• Electricity used to dry
the leaves
• Diesel ship emissions
from tea gardens in
China, India & South
America to bottling
facilities in the US.
• 2009 total emissions:
2,512,825 lbs of CO2
• Diesel truck
transportation of
sand, limestone
ashes, and plastic
resin to the bottle
factories
• 2009 total emissions:
200,568 lbs of CO2
• Electricity running the
bottle production lines
• Electricity powering
the overall facility
• 2009 total emissions:
3,862,382 lbs of CO2
• Diesel truck
transportation of
empty bottles to
beverage
manufacturing
facilities in Oregon &
New York
• 2009 total emissions:
1,059,186 lbs of CO2
• Electricity use for the
bottling line
• General plant
electricity
• Propane powered
forklifts used within
the plant
• 2009 total emissions:
5,915,242 lbs of CO2
2009: Introduced
new 22% lighter
plastic bottle
2004
2004
Partnered with Ford Escape Hybrid for the
“Great Tea Escape Sweepstakes”
Sales: $5.9 million
Tea to
Warehouse
• Diesel truck
transportation of
bottled teas to
distributor and retailer
warehouses
• 2009 total emissions:
3,915,242 lbs of CO2
2009: Reduced
weight of each
truckload by 500 lbs
11
EMISSIONS FROM GLASS
BOTTLE PRODUCTION CHAIN
Pick, Process & Ship Tea
25%
14%
20%
Procure Raw Materials
16%
37%
EMISSIONS FROM PET
BOTTLE PRODUCTION CHAIN
Make the Bottles
2%
6%
Transport the Bottles
Brew & Bottle
14%
32%
1%
32%
1%
Tea to Warehouse
2009 Total Emissions: 13,728,816 lbs of CO2
= 1290 cars driving 12,000 miles/year
(1,000 cases = 1 car)
2009 Total Emissions: 21,304,870 lbs of CO2
= 2,000 cars driven 12,000 miles/year
(1,050 cases = 1 car)
Sources: CleanCurrents.com, carbonfund.org
Sources: CleanCurrents.com, carbonfund.org
In 2009, Clean Currents helped Honest Tea calculate its carbon footprint for Jasmine Green Energy Tea and
purchase RECs that support a family wind farm in Iowa. They also have helped bring wind power and green
energy solutions to over 4,000 D.C. area businesses and residents.
TRANSPORTATION
MOVING OUR PRODUCT
Each bottle of Honest Tea travels a long way before
it ends up on the shelf. Each case travels an average of 640 miles before it reaches the stores where
consumers can purchase it. Our new 22% lighter
PET bottle contributed to a 500 pound weight
decrease in each full truck. This means that each
truck can now go farther on one tank of gas.
MARKETING ON THE MOVE
Instead of traditional advertising spending, we rely
heavily on field marketing teams to promote our
brand and products. Our growing guerilla marketing
teams each log hundreds of miles every month, and
to help reduce that part of our carbon footprint, we
purchased 8 Saturn VUE hybrids for them to use.
The Saturn VUE saves an average of 7 mpg compared to the average SUV. Since we started using
hybrids, our fleet has
consumed 7,100
fewer gallons of gas.
WATER USAGE
We bottle Honest Tea at a number of different facilities across the U.S., and each of them uses a slightly
different manufacturing process.
Water usage varies from facility to facility, but in
general it takes us 2,025 gallons of water to
produce a 2,000 gallon batch of our top selling
variety, Honey Green Tea. This means we incur a
1.25% water loss due to water being absorbed by
the tea leaves, which are filtered out of the liquid
before being bottled.
While we don’t own manufacturing facilities, we
work with them to understand how our bottling
partners are improving their water efficiency. Some
of the steps taken include:
• Air cooled compressors to replace water cooled
compressors, saving 1,296,000 gallons of fresh
water per month in the bottling facility
• Chillers that re-circulate cooling water rather
than continuously replenishing, saving millions
of gallons of fresh water to date
• Automated water cleanup
processes that use water
more efficiently than
previous manual
processes
• Air jets to replace water
jets to rinse the bottles
out before the fill
process
• New boilers to double
East Coa
st
fuel efficiency
Bot
tling Plant
2005
2005
2006
Introduced Honest Ade
organic thirst quenchers
Sales: $9.6 million
Introduced unsweetened,
Fair Trade Certified™, Just Green & Just Black
12
MARKETING MATERIALS:
In 2010, we launched two retail programs that
promoted sustainability among consumers and
retailers. Our sustainable rack program introduced
100% recyclable standing wood racks into retail
stores and, so far, we have placed close to 6,000
sustainable racks.
2010 also marked the start of our reusable bag
program. Contemporary artist Shepard Fairey
designed an Honest Tea-branded reusable shopping bag made from recycled PET bottles. 100,000
bags were distributed and $10,000 raised from the
reusable bag program was donated to The Arbor
Day Foundation. It’s estimated that every time a
reusable bag is used, it replaces up to 3 plastic
bags. That means our program has the potential to
remove 15 million plastic bags from the waste
stream, assuming that the bag lasts for 2 years!
In late 2010, we are partnering with Gorilla Sacks, a
Georgia company, to save our Honest Tea retired
billboards (each one weighing in at 672 sq. ft. of
landfill waste!) from going into landfills by converting
them into a collection of one-of-a-kind products.
100% of Honest Tea’s billboards will be used to
create functional bags and other custom products
that will be sold through Honest Tea and Gorilla
Sacks websites. For every bag purchased, 10% of
the profit will be used to help fund a safe environment for captive gorillas and other animals. Go to
www.gorillasacks.com to learn more.
Gorilla Sack
Shepard Fairey
reuseable bag
Display Facts
Size:
Approx. 66” high x 15” deep x 14.25” wide
Weight: Approx. 35 lbs.
Materials by Volume
% of Total
Rack Weight % Recyclable
Forest Stewardship
Council Certified Pine
Medium Density Fiberboard
65% 100%
18% 100%
Recycled Steel
Recycled Card Stock
10% 100%
5% 100%
(Letters Made From Recycled Pallet Wood)
(All Channel Strips/Header)
Sustainable Rack
Biodegradable Inks
1% 100%
Biodegradable Foam Core
1% 100%
(All Printed Materials)
(Side Piece)
Emissions: Minimal VOC
(Volatile Organic Compound)
CONTAINS: 100%
HONEST INGREDIENTS
FROM MERCHANDISING
RACK TO BOTTLE
2006
2006
Consumer Reports named
Lori’s Lemon ‘Best Bottled Tea’
Partnered with HP for ‘Honest, Fair & Wired Sweepstakes’
giving away computers & supporting Fair Trade
13
HONEST HQ: A View From Seth’s Desk
Windows that open
Reclaimed Brick
Energy Efficient Lighting
Composting Bin
24 quarts compost/month
Open work space
Bamboo Floors
Re-used office furniture
Seth sits here!
When it came time for a new office, we did our best
to walk our talk and create an office that is environmentally friendly to both the planet and our employees. We converted a former mortgage broker’s office
into an open-area workspace right in the heart of
downtown Bethesda, Maryland - where Honest Tea
was born in 1998. Employees enjoy access to the
Metro and the Capital Crescent Trail, as well as lots
of natural light; and by incorporating reclaimed
bricks, bamboo flooring, gently-used desks and
chairs, and a composting bin into our space, we’ve
helped protect Planet Earth a little bit too.
SUMMARY – KEEPING THE PLANET HONEST
We are monitoring our carbon footprint and using hybrid vehicles in our marketing. We started a
successful reusable bag program and have converted much of our marketing materials to more
sustainable resources.
Despite this progress, we drive hundreds of thousands of miles to sell Honest Tea, and transport
millions of bottles around the country. We will be working closely with our suppliers, manufacturers
and warehouses to reduce our carbon emissions, and we anticipate a reduction in miles traveled per
bottle as we begin working with suppliers located closer to our other production facilities.
2006
2007
2007
Sales: $13.5 million
Introduced Honest Kids, organic,
low-sugar thirst quenchers
Introduced multi-serve
64 fl. oz. PET bottles
14
IV. PEOPLE
OUR IMPACT ON CONSUMERS
ORGANIC Organic products promote a healthier
planet and lifestyle. We encourage consumers, and
our employees, to look for the Organic seal on food
and beverage products.
While the USDA maintains that organic food is not
more nutritious or safer than conventional food, we
have yet to see a study that suggests the earth or
humans are better off with exposure to chemical
pesticides or fertilizers. There have been several
studies that show Atrazine, a commonly used
herbicide, produces gender-changing effects in
male frogs, raising concerns about its safety in
humans and the ecological system. More information can be found in Proceedings of the National
Academy of Sciences:
http://www.sciencedaily.com/releases/2010/03
/100301151927.htm
HONEST FEEDBACK
We created the [email protected] email
address 12 years ago, and put it on the back of every
one of our bottles. We hold ourselves accountable
for what we do, and have learned that our consumers are pretty quick to do so too. This dialogue is one
of the ways we stay Honest.
EMPLOYEES:
QUALI-TEA OF LIFE
Our innovative
workplace practices
have helped us maintain the entrepreneurial culture that makes
Honest Tea a “Winning Workplace,”
according to Inc. Magazine and the
Alliance for Workplace Excellence.
Some of the quality of life practices
we follow include:
telecommuting • flextime • paid volunteer time •
commuting allowance • educational allowance •
health & wellness coach
COMMUNI-TEA
Honest Tea provides two paid volunteer days
each year. When we reviewed this program for
inclusion in the Mission Report, we were
surprised to learn that only 8% of our staff used
at least one of their volunteer days in the past
year. One of our challenges is to figure out how
to better encourage employees to take advantage of these days.
2007
2007
2007
Partnered with Jamis Bikes; gave away
500 bikes to consumers and every employee
Partnered with TerraCycle to launch the
Honest Kids Pouch Brigade Program
Sales: $23 million
15
HONEST (TO GOODNESS)
HEALTH & WELLNESS AWARD
While we don’t have deep pockets, we’re always
looking for ways in which in-kind donations of Honest
beverages will help – whether by rewarding volunteers
with a cold beverage, welcoming runners across a
finish line, or treating local non-profits to healthy
Honest Kids pouches. In 2009 we donated over
18,000 cases of product to hundreds of non-profits;
the total value of these donations is over $324,000.
Among the many non-profits we supported are: Girls
on the Run, Juvenile Diabetes Research Foundation
and Chesapeake Bay Foundation.
Employees are encouraged to set health goals at
the start of each year, and the top five employees to
meet their goals are acknowledged at our annual
company meeting. In the past year, we have recognized goals such as quitting smoking after 30+
years and an employee’s weight loss of 40 lbs.
KEEPING THE TEA IN TEA-M
•
•
•
•
Total employees: 130 full time employees
36% women and 13% minorities, year-to-date
87% staff retention
2 of 8 senior managers are women
LABEL BACK:
Health and Wellness is a blend of mind and
body, combining nutritional knowledge, fitness
aspirations, thriving relationships and work-life
balance. Health and Wellness depends on a daily
dose of Honest Tea for hydration needs.
Honestly yours,
The Team at Honest Tea
P.S. Health and Wellness has an extended shelf life.
Ingredients: A mostly organic mix of water, healthy bones and skin,
blended with natural vitality, honest motivation, and a thriving sense
of what’s good for you. Stirred with encouragement and support
from co-workers, family and a wellness coach. Contains a mix of
snackpack goodies, including but not limited to Bear Naked Granola,
Route 66 chips, fruit leather and Peeled Snacks.
Contains 100% Honest Tea Determination.
The Facts
Serving Size - Human
Servings per container 1 person
Amount per serving
Calories per serving
Less than before
Calories per bottle gets ‘em right
% Daily Value*
Total Fat lean & green 100%
Trans Fat 0%
Fitness
a serious goal
Total Dedication
100%
Pro-Team
100%
Iron Will
100%
*Percent Daily Values are
based on a 2,000 calorie diet.
SUMMARY – KEEPING OUR CULTURE HONEST
Over the past 12 years, we’ve succeeded at maintaining our unique company culture as we’ve
grown from 3 to 130 employees. Ten of these employees originally worked for Honest Tea as
summer interns, and we continue to expand our Road Warrior internship program on a yearly basis.
We recognize the need to maintain our culture and employees’ enthusiasm for our mission as we
continue to grow. Maintaining transparency and accessibility to our management staff is a key goal.
With 65% of employees working away from our Bethesda headquarters, we also recognize the need
to find more ways that Honest Tea can become a partner in communities where our employees live.
2008
2008
Launched Bethesda Green in partnership
with local business and community leaders
The Coca-Cola Company
purchased 40% of Honest Tea
16
V. PARTNERSHIPS
FOR THE PLANET
FAIR TRADE VARIETY PACK
RECYCLE BANK
Our 2009 Fair Trade variety pack not only offered
consumers their favorite varieties in one package,
but also gave us the opportunity to give back to five
of our partner non-profits: Green America, Earthshare, Bethesda Green, Environmental Leadership
Program and Sierra Club. On each variety pack, we
directed consumers to a website where they could
select which organization received $.25 from their
purchase, paid for by Honest Tea. In retrospect,
spreading the donations
over five charities diluted our
impact and taught us that
we should concentrate our
focus
to make a more
meaningful contribution.
BETHESDA GREEN
(www.bethesdagreen.org)
We may buy our tea from India and China, but what
is happening in our hometown is very important to
us as well. We worked together with neighboring
companies and local government leaders to bring
together the private and public sectors to create
Bethesda Green.
In the short time Bethesda Green has been around,
it has:
• Developed Maryland’s first Green Business
Incubator
• Created green office space as its home and an
educational community center
• Put 33 recycling bins throughout the downtown
business district
• Initiated a biodiesel fuel research project and
restaurant grease collection system
• Sponsored e-cycling days and collected nearly
200,000 pounds of home electronics
(www.recyclebank.com)
In 2008, Honest Tea joined Recycle Bank’s growing
number of reward partners in support of finding
innovative ways to improve recycling rates. Residents in Philadelphia, Los Angeles, and Hartford,
CT, to name a few, fill their recycling bins, an ID tag
records the amount recycled, and points are
awarded to each household. Families are able to
redeem their points for a variety of items, including
Honest Tea. To learn more and bring RecycleBank
to your local community, visit:
www.recyclebank.com
SIERRA CLUB
(www.sierraclub.org)
In 2009, Honest Tea began a yearlong partnership
with the Sierra Club. We donated $125,000 at the
end of the year-long program, and gave away four
all-expense paid Sierra Club excursions, awarding a
few lucky Honest Tea drinkers an escape to the
great outdoors.
CITY YEAR
(www.cityyear.org)
One of Honest Tea’s first varieties, Community
Green, bears the City Year logo as a way to show
support for one of our longstanding partners.
Honest Tea brings special awareness to City Year
annually on Martin Luther King Day, when we
arrange to donate drinks and volunteer time at
various nationwide City Year projects.
The Bethesda Green model is already being replicated by other local communities, such as Poolesville, MD, and even further afield. If you’re interested
in learning more about what you can do in your
community, take a look at www.bethesdagreen.org.
g Day
E-Cyclin
New Bet
hes
recycle b da
ins
2008
2008
2009
Introduced Jasmine Green Energy Tea; purchased RECs
(renewable energy credits) to offset CO2 emissions
Sales: $38 million
Introduced new plastic bottle
that is 22% lighter
17
GREEN AMERICA
(www.greenamericatoday.org)
OTHER PARTNERS
Honest Tea has had a relationship with Green
America (formally known as Coop America) since
1998. We support Green America’s mission to
harness economic power to create an environmentally and socially sustainable society. Since 2005,
Honest Tea has supported their annual Green Festivals across the U.S. through financial and product
donations.
NET IMPACT
(www.netimpact.org)
Net Impact harnesses the power of business to
create a more socially and environmentally sustainable world. Since Honest Tea was founded, we
have hired at least one summer MBA intern from
Net Impact every year to join our team and help us
continue exploring how business and sustainability
can work together. In 2009, 2,400 MBA students
and professionals participated in the annual conference at which Seth was a member of the closing
keynote panel. He was awarded the 2009 Member
Achievement Award at the conference. Seth is a
member of the Net Impact Advisory Board.
Tea gave
In 2007, Honest
ployee
bikes to every em
If you w
go fast, goanalt to
If you want one.
to
go togetherg.o far,
African Pro
verb
SUMMARY – KEEPING PARTNERSHIPS HONEST
An important part of Honest Tea's growth has been our partnerships, from local organizations like
Bethesda Green to nationwide organizations like Susan G. Komen for the Cure® and the Sierra Club.
We believe in encouraging people to work together to better their communities and we will continue
to highlight our partners’ efforts to further their causes.
Our partnerships have been wide-ranging, touching on everything from climate change and recycling
to health and wellness. As we grow, we need to think about how to connect our partnerships more
closely to issues that are most relevant to Honest Tea’s product attributes and mission.
2009
2009
2009
Launched Honest Kombucha
Awarded Greenopia.com’s coveted
4-Leaf Rating as “the greenest beverage company”
Partnered with Sierra Club
for national marketing program
18
DOES HONEST TEA GO BETTER
WITH COCA-COLA?
It’s been two years since we welcomed an investment by the The Coca-Cola Company and we
haven’t changed the way we do business. We’ve
accelerated our sustainability efforts, and our partnership with Coca-Cola has enabled us to:
• Partner with Coca-Cola to produce organic
beverages in three of their facilities
• Identify new bottle design technology to significantly reduce our packaging to product ratio
• More than double the number of different places
Honest Tea is available, to over 60,000 outlets
throughout the United States
If you’re interested in learning more about our
partnership with Coca-Cola, go to
http://www.inc.com/seth-goldman/2008/08
and
http://www.honesttea.com/blog/category/from
-seth-and-barry/page/3/
SUSTAINABILI-TEA-M
At our 2009 company meeting, we shared sustainability initiatives that had been implemented
throughout the company and challenged ourselves
to find even more ways to be “green.”
What are we hoping for from our partnership with
Coca-Cola? To make it possible to buy healthy,
low-sugar, organic, Honest Tea wherever it’s
possible to buy a Coca-Cola. We’re hoping that we
will continue to be a positive force for change in the
beverage industry.
When Seth was invited to speak at a global CocaCola environmental and sustainability conference in
the spring this year, he introduced Honest Tea’s
mission to hundreds of people involved in
Coca-Cola’s environmental and operations initiatives on a daily basis.
ental
d departm
plete
2009 com
initiatives:
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east coast
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r
u
ec
S
production
s
cal server
ated physi
- Consolid
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into virtual
ls
ly materia
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- Adopted ire binders
for new h
le,
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- Switched le sampling cups
compostab
iesel vans
e use of d
th
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at
in
- Elim
by 90%
A SIP IN THE RIGHT DIRECTION
It’s gratifying to know that we actually met a number of the goals outlined in our 1998 Social Responsibility
Report, like achieving 100% organic-certified products, adding Fair Trade Certified™ products to our portfolio, and switching from solvent-based inks to plant-oil based. We’ve also made important improvements in
our product to packaging ratio, but we still have work to do:
•
•
•
•
Exploring more environmentally-friendly packaging and labels
Finding more sustainable transportation options to reduce miles traveled per bottle
Understanding and improving our water and energy usage
Better understanding and communicating the relationship between Fair Trade premiums and their benefit
to the growers
• Finding more ways to partner in communities where our employees work and live
At the time this report is published, Honest Tea has gained distribution in every state, giving us unprecedented reach and the opportunity to impact the American diet in ways that are increasingly important given
the accelerating growth of obesity across the country. We’re excited about the potential to make healthier
alternatives more widely available and about expanding the reach of our environmental initiatives. We know
there are lots of places where you still can’t buy Honest Tea and we’re working to change that. Similarly, we
know there’s a lot more work to be done to fulfill our mission. Our tea party is just beginning.
2009
2009
2010
Bethesda Green opens
green business incubator
Sales: $47 million
Tune in next year...
HONEST TEA - 16 OZ GLASS
HONEST TEA AND HONEST ADE - 16.9 OZ PLASTIC
HONEST KIDS
HONEST TEA AND HONEST KIDS - 64 OZ PLASTIC
HONEST MATE
HONEST KOMBUCHA
THANK YOU for reading “Keeping It Honest.” We
welcome your honest feedback and encourage you to share
your ideas with us, whether it’s new ways to reuse our
brewed tea leaves, more environmentally-friendly packaging
options, or something we haven’t yet thought of. Send your
comments to [email protected]. And, be
sure to go to http://www.honesttea.com/coupons/ to
download a coupon for your favorite Honest product.
The cover page is a photo of an actual tea crate from India. Since we
like to keep the (re)cycle going, the tea crates are not only cool office
décor, but function as a coffee table and podium.
Think before printing; if you print, please share.
FPO
FPO
Honest Tea, Inc. | 4827 Bethesda Ave. | Bethesda, MD 20814 | 1-800-865-4736 | www.honesttea.com
FPO