Honest Tea Challenges New York City Bottle Ban


Combatting obesity by singling out bottled beverages is the wrong direction for the city says Honest Tea founder Seth Goldman who wrote shared his opinion with readers of the Wall Street Journal.

As a fellow entrepreneur with a public-service orientation, I have been a longtime admirer of Mayor Michael Bloomberg's entrepreneurial spirit and commitment to acting on his principles. Having launched Honest Tea 14 years ago with five thermoses and a belief that consumers were thirsty for a lower-calorie natural and organic beverage, I appreciate all he has accomplished. However, I write today as an entrepreneur frustrated by a proposal that arbitrarily complicates the practical realities of commerce.

When the mayor announced his proposal to ban sugar-sweetened drinks in portions over 16 ounces from New York City restaurants, many of my friends assumed Honest Tea would welcome the news as a public initiative to complement Honest Tea's long-standing commitment to marketing lower-calorie drinks. Yet the mayor's proposal would actually prevent Honest Tea from selling most of our drinks in New York City restaurants.

Under the proposed changes to Article 81 of the NYC Health Code, food-service establishments would not be able to sell packages larger than 16 ounces for drinks that have more than 25 calories per eight-ounce serving. Honest Tea's top-selling item is our organic Honey Green Tea, which has 35 calories per eight-ounce serving and is in a 16.9 oz. bottle. We label 70 calories on the front of the package so consumers know what's in the full bottle.

We initially went with 16.9 oz. (which is 500 milliliters) because it is a standard size that our bottle supplier had in stock at the time. We subsequently invested several hundred thousand dollars for 16.9 oz. bottle molds. Is 16.9 ounces the perfect size? Who knows? As a beverage marketer, we willingly submit to the unforgiving judgment of the market. What we did not anticipate was an arbitrary decision to constrain consumer choice.

One response we considered was putting 0.9 ounce less liquid in our bottles, but that would create a separate set of complications. We fill our bottles to the brim—not just because we like to deliver an "Honest" value, but also to ensure quality since we do not use preservatives. Then there is the costly prospect of having to change all of our UPC codes (those complicated black bars found on every product on a grocery shelf) because we would be offering a different liquid volume—all for 0.9 ounces!

And what if next year, Cambridge, Mass., comes up with a ban on 15.5-ounce containers? As soon as government starts getting between us and the consumer, we quickly find ourselves considering scenarios that are not based on market realities or consumer needs.

I challenge the mayor and the New York City Board of Health to seriously consider the impediments that entrepreneurs already face in our efforts to offer lower-calorie drinks. Starting a business and building a challenger brand with modest resources is already a daunting task. The proposed ban would create additional barriers to beverage innovation.

One of my favorite Honest Tea bottle-cap quotes is the Chinese proverb "If we don't change the direction in which we are headed, we will end up where we are going." Given that the life expectancy of our children's generation is lower than ours, there's no question our nation's health indicators are headed in the wrong direction.

But the mayor's proposal will not move us in the right direction. The obesity problem was not caused by one industry alone, and targeting one industry is not the solution. Working together on a multifaceted approach is.

Mr. Goldman is co-founder & TeaEO of Honest Tea.

Source: Wall Street Journal