EXCLUSIVE Interview with Seth Goldman of Honest Tea: Kombucha Back in Second Half of July

Yesterday I talked with G.T. Dave, the founder of Synergy, about kombucha being pulled from all Whole Foods stores due to concern over slightly elevated alcohol levels. Today I talked with Seth Goldman, the co-founder and CEO of Honest Tea, whose brand of kombucha just hit the shelves in January and has also been pulled.

MindBodyGreen: How are you doing?

Seth Goldman:
"I’ve had better weeks but overall I’m doing OK. Its all part of building a business, I guess… but it’s certainly not what you hope for when you launch a business or build a brand…"

MBG: When did you first find out about concerns over alcohol levels?

SG: "Our first interaction was a week before last – so that would be a week before the voluntarily withdrawal occurred. They asked about our process and about the testing that we conduct, and we shared with them what we do. It is a rigorous system, where we had confidence in what we were producing was within specification.  For that matter, we also kept ‘retains.'  That is, we retained samples of what we produced to make sure that was within specification."

MBG: Where are you now in the process?

SG: "We’ve just done a whole battery of tests to confirm all our ‘retains’ were in spec. While our retains were within spec, we took the step of taking a voluntarily withdrawal beyond Whole Foods – and we went out and pulled product from other stores that contained products that were out of spec… This is about protecting the integrity of labeling...

"What’s striking is that we’ve done tests on the same batch and gotten different results, so it raises questions, in my view, how wide is the margin of error here? I don’t yet know, but it’s clear that there is a margin of error… I can understand how this happens when products are handled differently in different temperatures, but when the same product, literally connected -- like Siamese twins -- how can you get any variation of the testing? We have seen this. It’s certainly puzzling and it certainly gives us pause as we reformulate – to ensure that we have a product that tests correctly however it’s handled."

MBG: So is this purely a testing issue?

SG: "My point of raising the testing is that going forward we’re all going to want to have products out there that are within the legal specifications -- in any circumstances. I don’t believe that this is the case where something 0.8 was really 0.2, but it’s conceivable that 0.8 might have been 0.5 or it might have been 1.2 – I just don’t know. This is one of the things that we are really digging in on here. We literally tested hundreds of samples because we just had to get more rigor around understanding what’s happening here."

MBG:
Are you in the reformulation stage right now?

SG: "Yes. Once we began to see some variability in the results we said we need to find out a way to make this where this won’t be an issue. We never put the pasteurization option on the table. That’s not an option that we will be pursuing. Obviously we do have to find a way to deliver the same functionality and, of course, taste."

MBG: How will this effect the taste?

SG: "It will… I will say that I don’t know if kombucha ever sold on its taste… I guess you get used to it , but I think functionality is the main selling point of kombucha to the consumers who buy it."

MBG: Are you weeks a way, months away?

SG: "It’s a matter of weeks. It’s not one or two weeks, I’d say certainly less than two months. It’s not just coming up with a product that tastes good and has functionality – we’re going to be doing all sorts of stress tests on the product as well. It’s in July, but it’s probably the second half of July."

MBG: Because your product is somewhat new to the marketplace (January in Whole Foods, March for the rest of the country), do you think you've experienced less of an impact?

SG: "It’s hard to put a positive spin on this type of situation. It’s never a good thing to have to take a back a product you’ve made – that’s not good for business under any scenario. We were seeing great momentum for the product, so this clearly stops it, as I suspect it does for a lot of other companies. I think the only upside is ultimately how you handle this kind of situation says a lot about how you act as a company. While we are not helping our sales by pulling our product off the shelf – if you show me a business model where that works I’d be curious to see it (laughing). It’s about how we communicate with our consumers and our partners, and if you handle it the right way then ideally you’re creating and establishing trust. Although we’re not selling anything now, if we handle this right we’ll be able to sell more in the future. It’s easy to hold hands and sing kumbaya during the good times, but can you hold someone’s hand and look them in the eye during a challenging time? That is something we’re hopeful that we can do."

MBG: Is there one message you’d like to get out there?

SG: "We’re working intensely but also cautiously to make sure we can bring back a product that delivers everything our honest kombucha previously delivered. We can’t wait to get our product back on the shelves."

Stay tuned for more kombucha news!





This interview was conducted by Jason Wachob


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