Case Study: Can Honest Tea Say No to Coke?

"HONEST TEA makes juices and teas with natural sweeteners, including the pouch drinks Honest Kids. In early 2008, Coca-Cola took a 40 percent interest in the Bethesda, Md.-based company, which had revenue of $47 million last year. Coke has an option to buy the whole company next year.

THE CHALLENGE Maintaining Honest Tea’s integrity while adjusting to a new relationship with a financial backer that has a different way of doing business.

THE BACKGROUND Seth Goldman, now 44, left a mutual fund job in 1998 convinced that he could develop a wholesome alternative to sugary drinks that never seemed to quench his thirst. He joined forces with Barry Nalebuff, a professor he knew from the Yale School of Management, to start Honest Tea."

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