US-based drinks group Coca-Cola Company has acquired for an undisclosed sum the remainder of Honest Tea after exercising its option taken out three years earlier when its corporate venturing group took a minority stake in the tea producer.
In 2008, Coca-Cola, led by its Venturing and Emerging Brands (VEB) unit, purchased a minority stake in Honest Tea, an organic bottled tea company.
Honest Tea will operate as a stand-alone business under chief executive Seth Goldman, who will reinvest most of his proceeds from the sale back into the company. However, the company will still gain the scale benefits of the Coca-Cola system, including manufacturing and distribution, and, in return, Honest Tea will also begin to sell current VEB brands to the natural foods distributors.
Since receiving an investment from Coca-Cola, Honest Tea has expanded distribution from about 15,000 outlets to more than 75,000, started using a plastic bottle that uses 22% less material, and doubled the number of products its sells.
Deryck van Rensburg, President and General Manager, Venturing and Emerging Brands, Coca-Cola North America said: "Beyond growth, having the unique vantage point of a minority investee and watching Honest Tea has helped our company in many other ways, from encouraging Coca-Cola to obtain organic certification at three of our facilities, to establishing a state of the art tea brewing and filtration system at a bottling plant. Additionally, it enabled us to participate with Honest in a number of sustainability initiatives on recycling."
In addition to the recent acquisition of Honest Tea, VEB manages brands such as illy issimo, Cascal, Sokenbicha and has an equity investment in Zico Coconut Water.