The Coca-Cola - Honest Tea Deal: Promoting Sustainability or Corporate Greenwashing?


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Case Details:

Case Code : BECG113
Case Length : 22 Pages
Period : 1998-2009
Pub Date : 2010
Teaching Note : Available
Organization : Honest Tea / Coca-Cola Company
Industry : Non-carbonated Beverages
Countries : US

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

The Beginning

In 1995, while Goldman was a second year master's student at Yale, a case discussion came up about rivalry in the beverage market between Coca-Cola and Pepsi. He then started exploring the water and beverage industry. Goldman noticed that the industry consisted of bottled water and high-calorie sugary drinks and lacked healthy beverages with less sugar...

Going Organic

Initially, organic tea was not popular in India and China, where most of the tea was grown. In these countries, organic farming had not taken off as it had in the US and Europe. In the mid-1990s, a study conducted in Germany showed that tea had residues of pesticides like DDT and organophosphates, which were harmful to the nervous system...

Distribution

Honest Tea was built from scratch with a few employees. According to Dan Cavanaugh, one of the first employees in Honest Tea, "It was hard in the day. We were out there pushing, doing a lot of sampling, opening new accounts, shelf resets, just going to these stores, trying to sell it and getting better space, better location, believing in the brand."...

Sustainability Practices

By developing and selling tea in a sustainable manner, Honest Tea planned to address several issues pertaining to the environment and social responsibility. According to Goldman, "The relationship of economics, well-being, and social responsibility all work together to create the customer loyalty that makes a brand possible. It is crucial to our success and survival."...

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