Can An Entrepreneur Be An Activist?

0:00From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch. I'm Jason Pfeiffer, the editor-in-chief of Entrepreneur Magazine.

0:22Most entrepreneurs approach business like a business person, but not Seth Goldman. So I approach it differently. I actually approach it as an activist. And Seth is a very successful activist. So in 1998, he started Honest Tea. I'm sure you've seen that brand. He started it out of his home, grew it into an international business that sold to Coca-Cola in 2011, went on to do a whole bunch of other things, including be the chair of the board of Beyond Meat. And now he has a company called Eat the Change, which is a food company focused on, well, a kind of activism, which we'll talk more about in a second, but just to kind of continue the biography.

1:02So ETH Change is a umbrella company that has mushroom jerky and a snack brand that's called Cosmic Carrot Chews. And then quite to his surprise, a new beverage brand, or actually kind of a old new beverage brand. In 2022, I got an unexpected call telling me that Coca-Cola was going to discontinue on his tea. And that brought me back into the beverage industry. And so under the umbrella of Eat the Change, we launched a new brand called Just Ice Tea. Which is to say that he actually bought back Honest Tea from Coca-Cola and then reinvented it as a new brand called Just Ice Tea. And the reason why I'm talking to Seth today is because I wanted to understand more about how to bring not just a mission to your company, which we all talk about a lot, but to go a step further to call yourself an activist, to think of business as activism.

2:03It's a really interesting idea. So I think, okay, if I wanted to try to move society in a particular direction, what would I do? And the inspiration behind Eat the Change was I recognizing climate change is happening. It's having such a dramatic and drastic effect on our planet. How do we move people to lighten their environmental footprint? And what they eat is the biggest daily part of our environmental footprint. So how do I move people towards choosing more planet-friendly food? And so then I thought, okay, well, I know how an activist might do it. You can try to run information campaigns.

2:39You could try to run lobbying campaigns about certain companies or certain retailers to carry certain products. My approach is, all right, well, let's try to make a business that sells planet-friendly food and let's make these products delicious and fun and accessible. But delicious and fun and accessible is not easy. It's not easy to source these products. It's not easy to make sure that you can make a delicious and fun and accessible and eco-minded product that's also affordable. And Seth, being in the industry as long as he has, has really mastered this. And so today on Problem Solvers, what I want to talk to Seth about, what I want to engage us all in thinking about is how to not just say, oh, here's a mission for that.

3:26I'm going to slap a mission onto this company. No. How do you think like an activist and an entrepreneur and navigate the complexities of doing good and doing it in a way that is fun and accessible for all? That's what we're talking with Seth Goldman about today on Problem Solvers coming up after this. With more and more brands looking for smart solutions to help them meet their sustainability goals, innovative paper-based packaging stands out as an ideal choice. Today, makers of everyday items from cosmetics to liquid detergents are now turning to paper as the preferred packaging material. Beyond product protection and retail shelf appeal, paper-based packaging is highly sustainable because it's made from a renewable resource and is designed to be easily recyclable, something that's good for brands and consumers who want to do their part for the environment.

4:21And here in the U.S., paper companies work with private forest landowners to grow and maintain forests at a rate nearly double the volume needed to make the paper packaging and boxes we rely on every day. So when brands choose paper-based packaging, they're helping to support the growth of our forests. Paper-based packaging is an easy way to do good for the planet. Learn more at howlifeunfolds.com slash innovations. All right, we're back talking with Seth Goldman of Eat the Change and Just Ice Tea. And we're talking about how to think like an activist, but also how to navigate the great complexities of building the kind of mission-driven company that you want.

5:02This is a really tactical conversation that you're about to hear about what it takes and the lengths around the globe that you must go to to build something that really meets your standards. And we're going to start by picking up where Seth is talking about what he was thinking about when he said, all right, well, what is the goal that I want as an activist? I want to move people's behavior and I'm going to start this food brand to do that. So now I have to start thinking about, well, what is the mission of this food brand? What are the guidelines that are going to define what we'll do and what we won't do.

5:39And we use those guidelines as the structure to build the business. And so for us, organic, for sure, everything, you know, we want to try to reduce the chemicals, synthetic pesticides and fertilizers going to the planet. Also, let's think about plant-based only because animal and livestock production is having such a huge impact on the planet. Let's make sure there's not, let's try to avoid all the water, energy and land being used to feed and create that whole part of our diets. Then think about biodiversity. There's six crops that represent over 60 % of all agricultural production. So let's avoid corn, soy, wheat, potatoes, rice, and sugar cane from any of our recipes.

6:18And so those guidelines as a starting point really help define what we're about as a business. Well, actually, sorry, before you move on, I just want to go back to the activist thing for a second, because what you say makes sense, but I wonder what it's in contrast to. So, you know, like everything else out there, right? Well, sure. But yes, yes. But so you could be I mean, I've talked to a lot of entrepreneurs. So you work with many or you're surely advised many over the time who are mission forward and think of themselves as wanting to be responsible stewards of the planet while also making good product.

6:59But I haven't heard anyone say, I'm going to approach this as an activist. What's the difference between approaching something as an activist and approaching something as an entrepreneur who's mindful of mission? Yeah. When you're an activist, you're doing it because you have a set of beliefs you want to bring into the marketplace. And just as an example, I mentioned those six crops we want to avoid. And that kind of made sense when we were doing it for mushrooms and carrots. But then we said, well, we didn't have a business plan to get into tea. That was kind of fell in our lap. If I went back to the Honest Tea playbook, I would say, well, at Honest Tea, you know, the sweetener we use was organic cane sugar.

7:31and even though we used just a tad sweet so it was less than most we were using a lot buying millions of pounds of it and at eat the changes that look this is the platform this is what we're our belief is we want to support a more resilient biodiversity in the planet then we're not going to use cane sugar and so the business person would have said hey that made sense that approach made sense for a snack business it doesn't make sense for a beverage business and the activist says i believe in supporting a more biodiversity in our diets and in the planet. So we're going to carry that commitment over to the beverages as well.

8:06So this is clearly a bias that I bring to the word activist, but I'm going to tell it to you so that you can respond to it. When I think of activists, Seth, I often think of impractical, right? I think of someone who's so anchored to a mission that they will do things that either aren't that practical or that don't resonate with a broad enough audience because people are like, yeah, yeah, yeah. But I have to move along with my day here. So you're not just being an activist. Yeah, you're describing the idealist activist. I'm probably more of a pragmatic activist. That would be the distinction. Yeah.

8:40And I am still idealist too, but I do have to run a business. And by the way, not only do I have to run a business, I've taken in money from investors who aren't my family and I need to give those investors their money back at some point too. So I take that commitment very seriously. And those investors invested because they know how I'm going to lead the business, but it doesn't mean I just take their money and thank you. And just pour it into the mission until the money runs out. Yeah. So, all right, you lay out this foundation of mission driven by a view of yourself and your responsibilities.

9:17How do you build from there? Because if you're going to rule out a whole bunch of the most common crops in the world, for example, then something very different has to happen for you to build a product. Well, it creates the guardrails. Some people look at guardrails as constraints and, you know, sort of limits. I feel the guardrails is actually freeing because it creates a structure. It creates definition in a marketplace where there's so much going on and everybody's doing everything. Like we know exactly what we're doing, what, you know, what we stand for. And if we do it well and we can communicate it, then hopefully our consumers and our retail partners will know what we stand for as well.

9:57So that actually is very empowering to bring that to the market. And sometimes we've seen this, even with Eat the Change, where a retailer will say, we know there's an opportunity in this space. And since it feels like that would be something you guys could pick up on. So that's always great when we hear that, because that means they understand what we're about. Tell me about Mozambique, which has become a solution to a lot of the constraints that you've put on yourself. Yeah. So let's start with just the framework or the mindset, which is that tea is one of the cheapest commodities in the world.

10:32Tea, coffee, and sugar are all very low-priced commodities. Generally, the tea, those commodities are sold at auction, and there's very little differentiation in price. And we, knowing that, said, look, we're spending pennies a bottle for our tea. And it's great tea. There's no compromise for our quality. But if we're spending pennies a bottle, we should be able to make our product economically accessible in the marketplace and still make sure we are sourcing with integrity. And what I mean by that is there's no child labor, no prison labor. The wage we're paying to the workers is meeting international labor standards.

11:09But on top of that, we should be able to pay an extra premium per pound that goes to a workers' council for them to invest as they deem appropriate. And it's important that it's the workers, not the owners of the garden. And so this is tracked as a third party verifying the money trail. And to see these workers invest in water, access to clean drinking water, or to invest in health care or education. And it's also important to know that the money decisions of how the money is spent is the workers are representative of the community of work reflects the workers. So it's giving women a voice in their economic future, which they would not normally have, or just if they only had their wages, it would be a much smaller voice.

11:55So it's empowering them. And so the other thing to know is that Mozambique, which is now a key supplier of ours, is one of the poorest countries in the world. But the province where we source, Zambizia province in Mozambique, is one of the poorest provinces and one of the poorest countries in the world. So we can really start to make a material impact on the quality of life, not just the quality, but the length of life. The average life expectancy in Zambizia province is 54 years old, which means I would already be dead if I were an average citizen there. And so being able to invest in this community, it really for us helps us bring to life when we talk about Just Ice Tea.

12:33I mean, the name is not accidental. And so it's certainly one of the important approaches to what we're doing. And layer on top of what you just said, what you were just saying a second ago about guardrails. So you had set out all of these guardrails for the kinds of suppliers you wanted to work with. That limits you and probably knocks out the majority of the suppliers around the world. So is that how you end up in this place in Mozambique? Well, it gives us clarity about who are the suppliers we do want to work with. And so this garden now is the largest organic tea garden. It's also, by definition, would also be the largest Fairtrade certified tea garden.

13:12And so that for us is a perfect partner. And it's one that we can scale with. It's one that can also supply diverse ingredients. We started with just one kind of tea they were supplying us. But as soon as Spike and I visited, we were so excited about it. We started asking them not only just about tea, but other herbs and botanicals we buy. Could they supply us with honey? Could they supply us with some of the other herbs that we buy? And so they've been super responsive and engaged. And we hope to do more. We're actually now working on a project with them where we're going to actually raise money from external sources to help support their economic development.

13:48One of the exciting connections we've made is with the Rotary Club here in Bethesda, Maryland, and they are excited to help fund a joint project with the Rotary Club in Mozambique to support this community. How do you find a place like that? So we have some tea suppliers who we had been, they're brokers who we'd been buying from during the Honest Tea days. And they were as heartbroken as we were to hear Honest Tea was being discontinued. And then as we started to talk about getting back into this business, I said, let us, you know, show us all the suppliers you have. And this was a relatively new supplier, which it sounds weird because obviously tea's been around for decades, but Mozambique had a civil war and basically all tea cultivation, or at least from this garden, had stopped.

14:32So this garden, the fields lay fallow. And then after the civil war and things settled down, it came back to life. And so they were very eager to show us these tea leaves for our consideration. And how do you verify that a farm all the way out in Mozambique? Which is not around the corner, by the way. I mean, when Spike and I traveled there, it was 60 hours to get there. Oh, my God. So first of all, it's great when we can go, but I don't want to suggest or represent that that's our enforcement mechanism. The fair trade does have an active inspection element to it. So it's not just the money trail, though that is important, but there's also on the ground inspections, not always scheduled to look at the working conditions, to look at the wages paid.

15:17And so that is a key part of the fair trade program. How much does sourcing in this way impact the cost of the ingredients and the production? And then how do you create a mass market product that isn't absurdly expensive? Right. Well, the interesting thing about tea is that it is so relatively inexpensive. So we're spending pennies a bottle for our tea. I spend easily my, my glass bottle, my empty glass bottle is four times the price of the tea. So I work hard to make sure I get a good price on glass and, and glasses is a commodity. I, I'm going to basically buy, as long as I have a good supplier who I can rely on, I'm going to try to get the lowest price I can with the glass with respect to the tea.

16:08We can buy the really some of the highest quality tea in the world. That's also organic and fair trade and still be a competitively priced product in the marketplace. The tea is not the big swing factor. If the price of glass goes up 10%, then I got an issue. But you're not just in the tea business and don't aspire to just be in the tea business. What's the answer to that question when you're cost-intensive products? Yeah, I always am going to want to talk to a supplier and try to give them an appreciation of what we're trying to build. Nothing makes sense for our business when we're selling less than a million dollars.

16:40And it probably doesn't make sense for the supplier either. So I'll say, look, I want you to price this for me as if we're a$10 million company. And then we can go from there. But you have to make sure you've got a supplier who understands what you're trying to do. And so part of that is literally treating them as an investor. Like, here's my business. Here's my plan. Here's what I'm looking to do. Here's the channels I'm going after. Here's the margins I'm trying to create. And not everyone's on board. They'll say, well, I got to make the same money, then you're not the right supplier for us.

17:09And we're happy to walk away from them. And for the good news on the T suppliers, the ones who came with us, we're already over that$10 million number less than a year into the business. And so for them, that was a good bet for them to make. A bunch of what you've said already answers this next question, but let me just ask it to you this way, because I'm curious what you'll say. what's your advice to entrepreneurs who want to be more fill in the blank, sustainable, mindful, mission forward about the thing that they're making, but don't have the level of experience that you do. And so don't have the, you know, the ready suppliers who can point you towards this newly opened farm in Mozambique.

17:51How do you, what's your advice to entrepreneurs about how to make their supply chain more sustainable. It really is important to start that way, right? Don't sort of build a business and say, oh, I'll get to that when I'm profitable or I'll get to that when I scale. It's like, no, do it right from the start. It's much harder to retrofit than... And so the gift of being able to do this, the benefits of being able to do this is that you have discipline, you have a focus. You know, if I were just a tea company, boy, it's such a competitive marketplace. I would hate to just be a bottled tea brand without any definition.

18:30And my team, not just me, but our sales team is thankful. And we just completed a big crew drive last week where we're all selling all across the DC market and everywhere we could go. And every store is like, well, why do I need another tea brand? Well, organic, fair trade, less sweet, and then locally based. All of those things were selling points. And so it's, it's a benefit. It's, it's, it helps to have that kind of definition as opposed to feeling like it's a sacrifice. So what you just said there about the messaging and how that differentiates in the marketplace reminds me of this story that I just heard.

19:04So let me share it with you. Maybe you've heard this, Jim. So Philips, the light bulb company in the, I don't know what this was, the eighties, the nineties, something, they came out with one of the earliest, this was pre-LED bulbs. So they came out with the earliest compact fluorescent bulb. And they marketed it as the name of it was Earthlight. And the primary selling point was that because it lasts longer and it uses less energy, it is less wasteful in every way. And they just could not get this thing to sell. Nobody wanted to buy it. So they stepped back and they started interviewing their consumers and asking what drives your purchasing decision for light bulbs.

19:44And eco-friendliness, even though everyone says it's important. It's like number four on the list, right? Number one is convenience. And so Philips rebrands, same exact bulb, they get rid of the name Earthlight, and they call it Marathon. And they pitch it as this is the light bulb to put in the hard to reach places that you don't want to have to change every four months. And so instead, they're going to last you for years. And then it becomes a great seller. And the lesson, of course, is that although consumers say that they care about eco-friendliness. It's often not the thing that actually drives the purchasing decision.

20:17So you have to be balanced in how you talk about it. I am curious how you handle that as someone who calls himself an activist, which is a very mission forward kind of thinking, but you're a practical activist. So you are thinking about what is actually going to move product. How do you balance the way that you talk about the mission with the way that you talk about every other attribute of the product? Right. So we've obviously been talking a lot about mission in this conversation, but if I were pitching this product to a consumer, I'd first talk about taste, right? I mean, the consumer, so it's delicious.

20:52Why is it delicious? It's delicious because it's made with incredibly high quality tea and it's minimally sweetened. Now that may be, you may like the calorie side of that, but one of the reasons the name Just Ice Tea makes sense is because you're tasting the taste of the tea, not all the other stuff in there. So this product has to work even if somebody doesn't even know about the mission or maybe doesn't even care about the mission. And that's the beauty of what we're building. It is not at all dependent on that. Somebody doesn't go to a convenience store and say, boy, I really want to change my environmental footprint.

21:24I think I'll go buy a tea. They go to a convenience store and say, I'm thirsty. And I'm going to find the one that tastes and maybe I don't want so much sugar. I'm trying to lower my carbs or something. Then I'll try that tea. So it has to work. The brand and the taste and the product have to work for somebody who just has no knowledge of those things. And of course, it doesn't matter if they know all about what we're doing in Mozambique, because whether they know it or not, every time they buy a bottle of tea, they're helping make that impact happen. So from my point of view, of course, I'd love it if everyone was driven by that.

21:56I know that's not the case. And my business isn't dependent on that either. Although, interestingly, what you said at the beginning was, you know, if you're thinking like an activist, you want to change people's behavior. and so changing people's behavior in some way means they got to be aware of the value of this so how do you how do you make sure that you're communicating that do you have some rule about how to weave the mission into the message no i i try i mean i what one thing that's neat both with honest tea and just hasty we make a name that sort of communicates there's something there but also creates a taste expectation if you dig deeper you'll find out more but i'm never going to hit someone over the head with it.

22:32It's got to work just because the product is what it says it is. So do you have any kind of rules or guidelines for how to tell that story, where to tell that story, how much to tell that story? Yeah, to be careful with it, just like you said. I mean, you know, if you lean too much into it, when people hear organic, really front and center, they may think either it's expensive or it tastes like grass. So don't go too hard on that. But, you know, one reason we talk about organically important is because we think it leads to a higher quality tea, you know, a healthier product for the consumer. Obviously, we can't make any claims like that.

23:06But that's certainly what we hope part of what gets communicated. So I think it's, you know, keep in mind what the customer is hiring you for, not necessarily what matters to you the most. And that's okay. And then how do you then get the customer if you aspire to do this on board for more, on board to think of themselves as a organic consumer, on board to think of themselves as an advocate for these causes. Our label language, our website, our social media, all of those things, we get to go deeper on it. But again, we don't want to be heavy handed. We want to make sure if someone who wants to gain that information can gain it, they will.

23:45We also put a huge effort on field marketing. So we've had four interns today was their last day, they just finished up. But all summer, they were sampling and every interaction, they had the chance to talk about what we're doing. Every interaction, there was a little video of a trip to Mozambique so they could look and learn. But it wasn't like, oh, you can't drink this tea unless you care about what's going on in Mozambique. It's more like, drink this tea. And by the way, there's this little video if you want to learn about more about what we're doing. It's interesting. It's almost like thinking about the product as the opening part of the conversation.

24:17That's right. It has to be. It has to be. And because you're thinking, are you thinking the first interaction with the brand might be the product? They'll be in the store. They'll pick it off. Oh, for sure. Yeah. Yeah. If the label doesn't work, if we're not in the right shelf space, we don't get any chance to talk about those other things. And then they'll engage with you on social or go to your website after. Yeah. Yeah. Yeah. Huh. Seth, final thought here for entrepreneurs, again, who are working to do this, to do this better. What might they be missing? What might they not be thinking about as they think about creating sustainable, responsible products and making sure that they connect with consumers?

24:57So it's too easy to get excited about your mission, excited about your recipe and not think about the market niche. It may mean a lot to you to bring your family's recipe to market or to source a particular ingredient, but if it doesn't go after a specific space and customer need, those things don't matter. And so make sure you can get objective enough with the marketplace to know. So for me, it was actually a very easy decision to go into tea because I knew the Honest Tea market space. And when Honest Tea went away, I'm like, I know there's a hole there. I know there's$100 million worth of customer business that I can take.