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Honest Tea built itself a tall order when it came up with such a virtuous name. But this growing brand on the cusp of a nationwide breakthrough is out to prove it can stay true to its socially conscious mission while accomplishing an aggressive distribution push that will bring better-for-you, organic products to a mainstream audience.
During the past two years, Honest Tea has grown at a rate of 50 percent a year, and its products are available nationwide through natural foods retailers. This year, with the organic movement ill full swing and an infusion of cash from investors, company executives have been criss-crossing the country to build its direct-store-delivery presence, thus solidifying its place in the rest of the retail world. Their efforts have paid off. The company has signed on five new Coca-Cola distributors during the past year, as well as a number of independent soft drink bottlers, such as Polar Beverages, and beer wholesalers. Just this spring, the company opened 2,000 new, decidedly mainstream, retail accounts, including Wawa, Duane Reade, Circle-K and Smart & Final.
Based in Bethesda, Md., Honest Tea was founded in 1998 when President and "TeaEO" Seth Goldman and his former professor at the Yale School of Management, Barry Nalebuff, teamed up with the idea of creating a low-sugar beverage product.
"There seemed to be a large hole in the beverage market," says Nalebuff, who still teaches at Yale while serving as chairman of Honest Tea. "Given how many thousands of products are introduced each year, you would have thought that there couldn't be any holes. Despite all the flavors, caffeine levels and carbonation levels, there was essentially no difference in the sweetness levels."
During a trip to India, Nalebuff discovered the broad range that exists between varieties and qualities of tea, and decided there was not only a market for low-sugar beverages, but there also was a void in ready-to-drink teas made from …