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By: Andreya Peru
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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
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BMC for Honest Tea 1999 Brewing Tea Bottling Tea Distributors
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 Tea Tea Growers Distributors Facilities Partnerships Free coverage Articles Loyal celebrity following Crow Tribe Buying, Bottling, Brewing tea Facilities Shipping Distribution Bottles of tea Varitea packs 5 flavors
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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
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Key Partners Distributors Cafeterias Higher End Food Service Companies
Marketing Suppliers
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Channels Free media coverage Articles Loyal following of celebrities
Crow Tribe Honesttea.com
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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
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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
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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
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Key Resources Tea Tea Growers Distributors Facilities Partnerships
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Cost Structure Buying, Brewing, and Bottling Tea Shipping teas
Facilities Distribution
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Revenue Streams Single 16 ounce bottle: $1.19 - $2.00 “Varitea” pack
5 flavors
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BMC for Honest Tea 1999 Brewing Tea Bottling Tea Distributors
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 Tea Tea Growers Distributors Facilities Partnerships Free coverage Articles Loyal celebrity following Crow Tribe Buying, Bottling, Brewing tea Facilities Shipping Distribution Bottles of tea Varitea packs 5 flavors
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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
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Competitors TeJava The Republic of Tea Tazo All west coast companies
Their existence means there is a market for Honest Tea
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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
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Methodologies Effectuation Traditional planning and market research
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
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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
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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
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Resources HonestTea.com Seth Goldman and Barry Nalebuff’s Business
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