Case | HBS Case Collection | February 2018
Nykaa.com: A Passion for Beauty
Paul Gompers, Anjali Raina and Rachna Chawla
Keywords: Entrepreneurship; Leadership; Organizational Culture; Technology; Human Resources; Brands and Branding; Operations; Marketing; Decision Making;
Citation:Gompers, Paul, Anjali Raina, and Rachna Chawla. "Nykaa.com: A Passion for Beauty." Harvard Business School Case 218-049, February 2018. View Details
Seth Goldman, co-founder of Honest Tea, drank a lot of liquids. An active person, Seth was continually in search of the perfect drink to quench his thirst after a run, a game of basketball or between grad school classes. Yet, Seth found most drinks either too sweet or too tasteless.
Barry Nalebuff, Seth’s professor at the Yale School of Management, found that he and Seth shared a passion for the idea of a less sweet, but flavorful beverage during a class discussion of a Coke vs. Pepsi case study. They agreed that there were tons of sweet options and lots of watery drinks, but in 1994, there was nothing in between to fill the void.
Fast forward to ’97. Seth goes for a run in New York City with a college friend who used to concoct juice drinks with him after class. As they found themselves doing the same beverage mixing after the run, Seth knew then that if he was going to quench his thirst for good, he would have to create the drink himself. He e-mailed Barry to see if he was still excited about the idea.
Timing was everything. Barry had just returned from India where he had been analyzing the tea industry for a case study. Among other things, he came away with the impression that the tea many American companies purchased for bottling was the dust and fannings left after whole tea leaves had been brewed. Barry had even come up with a name to describe a bottled tea that was made with real tea leaves–Honest Tea. When Seth heard the name, the simmering idea began to boil–it was the perfect name for an all-natural brand that would strive to create healthy and honest relationships with its customers, suppliers and the environment.
Seth took a deep breath, quit his job at Calvert mutual funds, and started brewing batches of tea in his kitchen. Five weeks after taking the plunge, he brought thermoses of tea and a recycled bottle with a mock-up label to Fresh Fields (Whole Foods Market). The buyer ordered 15,000 bottles, and Seth and Barry were in business–if they could figure out how to make that much tea. They did, and they’re still at it 15 years later.
In March 2011, The Coca-Cola Company purchased Honest Tea after an initial 40% investment in 2008, which helped expand the distribution of HONEST® beverages. Today, Honest Tea is run as an independent business unit and their HONEST TEA®, HONEST ADE®, HONEST KIDS®, HONEST SPLASH™ and HONEST Fizz beverages can be found in more than 100,000 stores across United States. The dream that took root in Seth’s kitchen in 1998 became a company that just celebrated its 15th anniversary. Seth continues to run the business as the President and TeaEO in Bethesda, MD with the same passion towards health, the environment and social responsibility.