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Coke's Honest Investment

It's odd to be blogging about a blog, but that's what we're doing today, after being invited by Seth Goldman, the "TeaEO" of Honest Tea, to read through his entry on why he approves of Coca-Cola taking a 40% stake in his company.

"Our challenge is to find a partner who wants to 'buy in' to our mission, rather than one who wants us to 'sell out,'" he wrote. We know exactly what he's talking about. Large CPG companies have become huge investors in the health and wellness business. In the process they're often maligned by core consumers as faceless corporations that strip their acquisitions and partners of everything for the sake of profit.

These types of investments do have benefits. A small company can't spread its ideals to the masses if it can't get the product out. This lack of adequate capital for research and development, marketing and distribution is what everyone, including Goldman, talks about when the conventional manufacturers step in with a proposal like this.

There's been a bit of hand-wringing lately. Clorox snapped up Burt's Bees and Kellogg's acquired Bear Naked. Now this. Indeed, sometimes these deals go bad. There's a sense of betrayal and compromise — think Ben & Jerry's or Silk, as Goldman did in his blog.

"The world of mission-driven business is littered with entrepreneurs whose companies lost their soul or at least lost their leadership," is how he put it. The company takes pains to point out that it will continue to operate as an independent business with the same leadership.

To Goldman's (and Coke's) credit, there's a lot of transparency in the announcement. The reasoning is sound, even if current fans might be disappointed. If that turns out to be the case, it's good Honest Tea has (pardon the pun) acquired the ability to reach to new customers.