2013 Mission REPORT 2 Honest Mission Report 2013
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® 2013 mISSION REPORT 2 Honest Mission Report 2013 LETTER FROM THE TEA-EO honest impact ‘Shades of Grey’ isn’t just a reference to the book I Being honest with ourselves is the first step away The Honest Tea business cycle motivates see people reading in airports. It’s an apt description from the grey areas for us, and for our customers us to innovate and create new beverages, of the space we often occupy as a mission-driven who are our counterparts in the consumption which spurs the growth of our company, brand operating in a profit-driven economy. economy. If we only saw things in black and the organic supply chain, and the consumer Honest Tea has made a commitment to white, this report would be much shorter and we base that we reach. sustainability even as we operate in a consumer would probably be spending more time patting economy. “Sustain” is defined as “to nourish and ourselves on the back and less time struggling uphold,” while “consume” means “to devour and with the contradictions. But these are complex destroy.” We strive every day to decrease the gap problems, and we take to heart the words of between our values and our practices, but we also one of our favorite bottle cap quotes, “For every have to recognize that if we are being honest with complex problem, there is an answer that is clear, mission ourselves and continually challenging ourselves to simple, and wrong.” do better, that contradiction will never go away. As we mark Honest Tea’s fifteenth year, we are So we operate in that grey zone between what’s pleased to see how the positive impact of our ideal and what’s possible and each decision brings business continues to grow. Our expansion of trade offs. We are conscious of it every time we distribution helps us democratize organics in sell single-serve packages, which add to the waste exciting new ways - and the increased demand for stream. We continue to work to lightweight our organic and fair trade ingredients helps accelerate packaging and to increase national recycling rates, the growth of suppliers who meet those criteria. but with rates for PET plastic averaging 30%, But as our mission report makes clear, there’s a lot we can assume that most of our bottles are not more work to do. recycled. As you’ll read, we recently added safety seals to our glass bottles – more packaging. And Honestly yours, yes, the seals are made of a compostable resin, but odds are most won’t get composted. In 2012 we took the step of launching our first non-organic drinks after 8 years of only producing organic ones. Why would we do that? See page growth 18 to see how we came to that decision. innovation We took some exciting steps in the past year. We eliminated organic cane sugar as an ingredient in our Honest Kids line and sweetened it with organic fruit juice instead. Securing the majority of the world’s supply of organic, OU Kosher white grape juice was not an easy task. See page 6 to learn how we pulled it off. Honest Mission Report 2013 3 table of contents MISSION 4 SOURCING ORGANIC ................................ 6 SOURCING FAIR TRADE TEA ................. 8 MAKING THE proDUCT ............................ 9 EXPANDING THE ConVersAtion ... 10 At THE store ...............................................11 HittinG THE streets .............................12 A stronG CommUNI-TEA ..................14 INNOVATION 17 proDUCts ................................................... 18 PACKAGinG ................................................. 20 GROWTH 22 ACCELERATING IMPACT ........................ 23 Xitou Tea Estate, Jiangxi, China Photography by Theodore Kay © Fair Trade USA 2013 4 Honest Mission Report 2013 OUR MISSION HONEST TEA SEEKS TO CREATE AND PROMOTE GREAT-TASTING, HEALTHIER, ORGANIC BEVERAGES. WE STRIVE TO GROW OUR BUSINESS WITH THE SAME HONESTY AND INTEGRITY WE USE TO CRAFT OUR PRODUCTS, WITH SUSTAINABILITY AND GREAT TASTE FOR ALL. Honest Mission Report 2013 5 A MESSAGE FROM MISSION CONTROL At Honest Tea, we like to think of our mission as resting on five complementary pillars that embody our values and our approach to running PROMOTING HEALTH & the business. WELLNESS While the pillars are somewhat distinct, our business activities often cross multiple areas. Likewise, our Great Recycle events seek to reduce our collective environmental footprint by building a stronger REDUCING OUR community. Sourcing Fair Trade Certified™ tea ENVIRONMENTAL creates economic opportunity for the villages that footprint grow our tea leaves, but it also brings a higher level of transparency to our supply chain. We strive to build both our business and our mission through all of our activities. That’s why CREATING ECONOMIC you’ll see examples drawn from every Honest Tea OPPORTUNITY department, including operations, marketing, sales, finance and human resources. We believe this integrated approach can create substantial, long-lasting positive impact on all the people MAINTAINING we’re connected to and the planet we all share. TRANSPARENCY Jenny Burns Director, Mission BUILDING COMMUNI-TEA Opposite Page: Far Left: Xitou Tea Estate, Jiangxi, China; Top & Bottom Right: Maud Tea Estate, Assam, India Photography by Theodore Kay © Fair Trade USA 6 Honest Mission Report 2013 supplier PROFILE sourcing ORGANIC Göknur Food Co. ORGANIC INGREDIENTS ARE A CORE PART OF OUR BUSINESS. WE CREATED THE FIRST Göknur Food Co., one of our juice ORGANIC READY-TO-DRINK BOTTLED TEA IN 1999 AND IN 2004 WE CONVERTED ALL concentrate suppliers, produces a delicious OF OUR TEA AND JUICE DRINKS TO CERTIFIED ORGANIC. and organic white grape crop. • Göknur is the first and largest organic & new organic SOURCING ORGANIC GRAPE JUICE Demeter (biodynamic) fruit grower and ingredient purchases This year we moved to sweetening our Honest manufacturer in Turkey. Kids Organic Juice Drinks only with fruit juice. • The company owns and operates over orGANIC We have been sourcing organic white grape juice 1,000 hectares of organic farmland for 5,000 lbs erytHritoL concentrate since the launch of Honest Ade growing fruits and vegetables. in 2005, but this reformulation substantially % orGANIC WHITE increased our orders. • More than 35% of Göknur’s total 270 GRApe JUICE The transition required more than simply production is organic, and 40% of total revising the purchase order. Our sourcing team white grape juice concentrate product is % 70 orGANIC steVIA traveled to Turkey and Argentina, along with organic. several orthodox rabbis, to inspect and certify * INCREASE CALCULATED for CALENDAR yeAR 2013 the white grape juice crop as kosher. After Göknur has made a strong commitment to (estimATED) OVER CALENDAR yeAR 2012 furthering organic agriculture in Turkey. The months of planning, our orders now account for company provides free organic fertilizer, a majority of the world’s kosher, organic white grape juice supply. training for organic farmers, contracts for fruit purchase guarantees and financing for contracted organic farmers. Left to right: The White Grape Juice team, including a rabbi, Honest Tea and Göknur employees; Göknur white grape vineyards; White grape vineyards at a supplier in Mendoza, Argentina Honest Mission Report 2013 7 did you know... Organic Trade Association organic certification Leadership Our organic products are inspected and certified by In 2012, we continued our support of OTA as Pennsylvania Certified Organic (PCO) according to the members of its Leadership Circle. The OTA their standards as well as the regulations of the USDA National Organic Program. represents over 6,500 farmers, ranchers, handlers, 81% processors, distributors and retailers across the of U.S. FAMILies ARE BUyinG country. With less than 1% of the United States ORGANIC PRODUCTS farmland certified as organic, the organization our tea couNtrIES of origin plays a critical role in advocating for the growth of organic agriculture and educating consumers 1% 2% about its benefits. SOUTH AFRICA EGYPT rooibos HIBISCUS % Rodale Institute 56% 41 INDIA CHINA This year we joined the Rodale Institute to support BLACK TEA the work it has been doing for over 60 years in organic GREEN & WHITE TEA OVER 10% farming research and outreach to farmers and scientists IN 2012, U.S. of ALL FRUits AND VEGETABLes SOLD throughout the world. ConsUMER SALes of to U.S. ConsUmers orGANIC ARE orGANIC proDUCts REACHED $35 BILLION Maud Tea Estate, Assam, India Photography by Theodore Kay © Fair Trade USA ORGANIC fooD & BEVERAGE SALes representeD ApproXIMATELY 4 % OF OveRALL U.S. FOOD AND BeveRAGE SALES IN 2012 SOURCE: ORGANIC TRADE AssoCIAtion, 2013 U.S. FAMILies’ ORGANIC AttitUDes AND BELIEF STUDY 8 Honest Mission Report 2013 SOURCING FAIR TRADE tea supplier PROFILEs Fair Trade certification is all about empowering IN 2012, OUR FAIR TRADE PREMIUMS WERE Chamong, Assam, India — Maud Tea Estate farmers and workers to fight poverty through better INVESTED IN A VARIETY OF PROJECTs — trade. We work closely with Fair Trade USA to help us BOTH NEW AND ONGOINg — fOR TEA Our Fair Trade monies helped create a loan source teas (and some herbs) that support better prices program for farmers to purchase a cow. and wages, safe working conditions, environmental FARMS WE SOURCE FROM, INCLUDINg: Farmers can sell the milk in local markets, protection, and long-term community development. India sell the dung as organic compost, and Every time we purchase Fair Trade Certified™ retain ownership of calves creating three • Installation of biogas units in many workers’ ingredients, we pay a premium on top of the market diverse revenue streams. price that in turn goes directly to the farmers for homes. The units trap methane emitted from community development projects in areas such as cow dung and pipe it to a stove in the kitchen. DaZhangShan, China — education and healthcare. Our Fair Trade premiums • Research of crops such as the Indian Olive Organic Tea Farmer amounted to $126,304 in 2012, which is about 7% of tree as an alternative revenue source our total cost for teas.