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“I associate the word tzedakah with tzedek, which is righteousness,” Goldman said. “In the long term, that’s much more powerful [than just giving charity]. There’s a great phrase in the Talmud, ‘Justice shall you pursue.’ It’s not just that you pursue justice, but how you pursue it is equally important.
“If we have a company selling an unhealthy product and give away all or half our profits to charity we would only be pursuing half the commandment.”
The desire to do good helped Honest Tea get off the ground. Goldman’s first sale was to Whole Foods Market, a supermarket chain with a similarly altruistic mission. In fact, the buyer there, impressed by the founders’ passion, made a significant commitment to Honest Tea before Goldman and Nalebuff had a factory or were even certain they could produce their teas in substantial quantities.
The motivation to do good also attracted investors. Jeff Swartz, then the CEO of the Timberland Company, was an early one: “What attracted me specifically was that Honest Tea didn’t do philanthropy. Rather, they sought to integrate doing well and doing good, a philosophy I tried to live by at Timberland,” said Swartz.
Honest Tea’s commitment to altruism sometimes trumps the company’s sense of competition. For example, Honest Tea’s children’s drink, Honest Kids, is just 40 calories, compared with the 100 calorie industry norm. When competitors followed suit (though no one dropped their caloric count all the way down to 40), Honest Tea didn’t consider it a threat but a victory.
“Millions bought Honest Kids and 100 million bought theirs,” Nalebuff said. “We set the example that it’s possible to buy a less sweet version of a kid’s pouch.”
Moreover, Honest Tea didn’t stop there. It was impossible to recycle the pouches because they contained a foil liner that couldn’t be separated from the rest of the pouch. So Goldman went another direction — upcycling.
He contacted a company that was able to reuse empty pouches to make things like pencil cases and tote bags. They even made an Honest Kids gown out of the pouches that a young concert pianist wore for her 2008 Carnegie Hall debut.