Rapid growth for Honest Tea: for a company that is only three years old, Honest Tea has enjoyed...

Is it the name? The packaging? The image? A sense of social responsibility? The use of organic ingredients? Or simply the taste of Honest Tea's product that appeals to the consumer? The company's popularity and rapid growth are probably due to a mixture of

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When Honest Tea was launched in 1998 by Seth Goldman and Barry Nalebuff, the six varieties of tea were brewed in Goldman's kitchen and marketed to a number of outlets, the largest of which was Fresh Fields (Whole Foods). Sales that year amounted to, $250,000. By 1999, seven types were available in 50 states and on line, and sales rose to $1.1 million. By 2000, more than half the product line was organic and sales reached $2.2 million. This year, growth is continuing, and the company will distribute something like 10 million bottles to stores across the U.S., including Barnes & Noble, Albertson's, Harris Teeter, Giant, Food Emporium, other mainstream stores, and natural food outlets. The forecast is that Honest Tea's sales will continue to grow.

This meteoric rise is set against a steady growth in tea consumption in the U.S. and a marked increase in the consumption of ready-to-drink (RTD) teas. Since 1992, when the first RTD teas became available, sales have grown by 60% annually. Sales of roughly $500 million in the early 1990s grew to approximately $2 billion in 1996 and $2.7 billion by 2000. The growth has been fueled by the convenience factor, the recently acquired habit of drinking and eating on the run, and the switch to healthier drinks such as waters, fruit juices and other low-calorie cold drinks. And it is probably the health factor that has played a very important part in Honest Tea's success story.

Only Slightly Sweetened

Aside from the simple, modern and clean design of the packaging, one of the most important features of Honest Tea is the lack of sugar and other sweeteners in the beverage. When he started the company, Goldman had a hunch that his slightly sweetened, all-natural teas would be well-received as an alternative to all the high calorie, over-sweetened carbonated beverages and tea drinks already on the market. The amount of sugar in Honest Tea's brews is remarkably low compared to most other iced bottled tea. There is as little as 2 grams in Jakarta Ginger, giving the drink a mere 9 calories. Customers reactions include, "At last, someone intelligent enough to realize that not all people like that syrupy junk that is on the market," "I did not think it was possible for anyone to make tea with less than 25 grams of sugar. Then I found your tea at Fresh Fields in Arlington I don't think I could brew it better myself even with a British mother," and, "Really good tea with just the right amount of sweet and spice. Then , when I turned the bottle over and saw how few calories were in it I flipped!" The media's assessments have also been positive. Fitness wrote, "Unlike many bottled iced teas, new Honest Tea is sweetened just enough to take out the bite, but not so much that your teeth feel fuzzy when you're done drinking it." And Health said, "If you're looking to quench your thirst without sucking down calories, and you don't like the taste of diet drinks, try Honest Tea."