Driving change begins with the need to build something you believe in. Seth Goldman is the founder and Chief Change Agent at Eat The Change. He is also the Chairman of the Board at Beyond Meat and the Co-founder and former Tea-EO of Honest Tea.
Seth joins this episode to break down entrepreneurism, how to build something from nothing and how the nine characteristics of elite performance are required to scale and exit a successful business.
Seth also shares his 3-P’s of Entrepreneurship, how the Boston Red Sox taught him important lessons on resilience and adaptability, the selection process for choosing the right business partner, and how entrepreneurs cannot delegate anything in the very beginning.
Seth and Fran also discuss his New York Times bestseller Mission in a Bottle, written with Honest Tea Co-Founder Professor Barry Nalebuff, and Seth’s newest initiatives around plant-based burgers and mushroom jerky!
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I am the Co-founder of Eat the Change®, a brand that empowers consumers to make dietary choices aligned with their concerns around climate and health. Eat the Change® recently launched a line of organic mushroom jerky as part of this mission. I am also the Co-founder of PLNT Burger, a plant-based quick serve restaurant that offers delicious burgers, sandwiches, fries and soft-serve.
After co-founding Honest Tea, and leading it to global scale, I concluded my role with the Coca-Cola Company at the end of 2019. I continue in my role as Chairman of the Board of Beyond Meat, having stepped down as Executive Chair in February 2020.
I graduated from Harvard College (1987) and the Yale School of Management (1995), and am a Henry Crown Fellow of the Aspen Institute. Barry Nalebuff and I are the authors of the New York Times bestseller Mission in a Bottle, a business book told in comic book form, which was published in September 2013.
Seth, welcome to the show.
Thank you. It’s great to be with you.
You have impacted many industries, organizations, people and society. You’ve driven global awareness to fair trade, honest products, and healthy living. You’ve developed organizations that take care of their people. You’ve been the subject of business school case studies and the good ones too, not the ones about what not to do. There are many topics that we could discuss here, many lessons to learn about entrepreneurship, leadership and innovation.
We only have a couple of hours but we could write a book on any one of the topics that we’re going to cover here. You did write a book on it, a New York Times bestseller, Mission in a Bottle. I read it and it was fantastic. I learned so much. Before we started, I was telling you some stories about things that I’m experiencing every day that I’m immediately tying into that book saying, “I’m not the only one who’s lived this.”
I want to tell your story through the lens of the nine characteristics of elite performance as defined by Special Operations Forces. We talked about it in every episode but in a couple of these episodes, the story of the guest is best told if we break each one of these down on their own. The lessons from your journey are captured in the display of these characteristics, drive, resiliency, adaptability, humility, integrity, effective intelligence, team ability, curiosity and emotional strength. I want to start with the core tenet of the show.
We’ve based this show on the premise that we have conversations with visionaries, drivers of change and transformative leaders. I’ve been fortunate to have a lot of different conversations with guests who are driving organizations, societies and industries forward. A vision for a better world requires strict adherence to a mission to achieve that vision. Without it, you don’t get there. It’s what we call on the show winning no matter the challenge.
We’ve spoken to CEOs, chief marketing officers, founders, Olympians, professional athletes, doctors, spymasters, chief soul officers. You are the first chief change agent. Before you were the first chief change agent, you were at TEO. Mission in a Bottle states a few things about you, “It wasn’t a question of if Seth would start a business but when and what kind. He needed to find something that had a social mission.”
[bctt tweet=”Change is about moving from where we are to where we could be.” username=””]
In referencing Rainforest Crunch, you said, “What an amazing concept that a business could make change happen and fund its growth through profits.” Your self-defined interest is in business as an agent of change. You’ve even referenced Martin Luther King in your teachings in China and said that I Have A Dream speech was about hopes for a better world. Can you define the change that you seek and your hopes for a better world? What does that end state look like?
Change is about moving from where we are to where we could be so it’s an aspirational vision. A little bit about the title, the reason I chose nonconventional titles is the businesses I made are not conventional also. I think of myself as not conventional. I don’t want to fall into the traditional patterns or expectations people have in businesses. Going back to Honest Tea, the most important thing was let’s make sure the tea is great.
I’m calling myself the TEO. That’s my focus. If we make great tea, a lot of other things will happen. Even here at Eat The Change, let’s make sure we’re making change happen. We’re not here to be on a treadmill. We’re not here to sell more stuff to people. We’re here to take their diets in a different direction and to help them move from where they are.
Where we are right now, especially with our food system, we have the most developed food system in the history of the world. People have never been able to have so much access to many different nutritional things in such a convenient way. Yet, we have the least healthy population in American history. It’s not due to the pandemic but our life expectancy in the United States is lower than it’s ever been relative to the rest of the world. Despite our wealth and knowledge, which are enormous. We’re ranked around 40th in terms of average life expectancy against the rest of the world.
You’d hear it and you’re like, “That can’t be,” with all the resources and all the wealth. It’s due to a lot of factors. There’s stress and lack of exercise. Our food system is what we are. What we eat is what we become. We have a tremendous opportunity to change that. The work I’ve been focused on is how do we shift people? Part of it is shifting what people choose. How do you shift people’s diets? Part of it is shifting what is offered to us. It’s hard to blame people for having unhealthy diets if the only thing available to them is not healthy. If you go to a store, there are healthy products but they’re not as popular as the less healthy products. They’re not as affordable or they’re not as well packaged. It is about trying to direct our whole food system in a different direction. That’s the change I’m focused on.
Why lead? Let me quantify that question a little bit. Too often, it’s easy to sit back and say, “Someone else will do it.” It’s a lot of work. It’s hard. It’s like, “People might not like me and they might not agree.” We have what we call limiting beliefs. It’s these limiting beliefs like, “Someone else will do it. We can’t. There are other things I can focus on.” What’s in you that says, “If I don’t do it, no one else will” or “If someone else is going to do it, it’s this way?”
Every Monday in our company, Eat The Change, we start the day with an open question. Since we don’t get to have those watercooler conversations, when everyone is in the office, we start our Monday call with everyone being able to share something. The question for Monday was, “What is your theme song?” There’s not a wrong answer. I apologized after I said it but when our MBA intern talked about how she loves the song Waiting for the World to Change by John Meyer, I said, “I love the tune. I hate the message. You can’t wait for the world to change. You’ve got to be changing it.” I hope I said it politely. I certainly didn’t want to make her feel bad about it.
We are the ones who are going to make this happen. There’s no big government, actor or third party that’s going to make change happen. We are the ones who are entrusted and empowered to make change happen. There’s no one else we should be waiting for. It starts with our daily choices and personal choices and everything we do. The amazing thing about food, and I didn’t even get into this when you asked about why change. I focus on health when we talk about changing our food system. The other reason we need to change our food system is it’s the single biggest daily interaction we have with our planet.
When we look at global warming, it is driving a tremendous impact when we’re wasting roughly 1/3 of all the food grown that doesn’t make it to people. That’s a tremendous waste of resources on water and energy used. When 1/5 of global greenhouse gases come from the animal livestock industry, there’s a huge impact on greenhouse gases and global warming.
We have to recognize that every time we eat a meal, we have the chance to make an impact. We do have an impact on whatever we choose. Can we take that impact to make it consistent with our hopes for the world and a better future? Ultimately, this phrase “Eat The Change” is a call to action, a call to empowerment, but it’s also a call to accountability without trying to create a guilt trip for people. We want to make sure everyone understands that we’re all responsible for what happens here.
We all have a part in it. We can’t sit back and say that we’re not impacting the environment or impacting society in any way. Elite performance, change, impact, success in anything starts with a drive. We define drive as the need for an achievement and growth mindset. Be better tomorrow than we are today. We always say success is earned. You said, “I reject the notion that we were lucky to be in the right place at the right time. It took us ten years of hard work to end up in the right place at the right time. Ten years in which several competitors with better access to resources arose and crashed. This was not an overnight success story.”
This is in reference to the building of Honest Tea. You’ve been called an eternal optimist, a risk-taker, an all-in kind of guy. Your cofounder said, “Fueled by his sense of purpose, Seth has amazing stamina. That’s key in a startup, which is more a marathon than a sprint.” What is it about the drive that is critical to entrepreneurs, to leaders in general? How do you then tie in this optimism, this risk-taking, and the criticality of having to be all-in? The reality is you took a company from an idea to 100 million units per year. It took 21 years and that’s a long grind that you sustained but how do you do that? How do you wake up every day and say, “I’ve got to keep going?”
Let’s keep in mind that for all entrepreneurs, by definition, we have to be optimists. You wouldn’t start something if you didn’t have the hope for it to work out. The other thing that’s important to recognize is our competitive advantage has to be our drive because the big companies have more resources, information and more money. The thing that differentiates us as entrepreneurs is an idea. We can think differently and we can act and not give up in a way that a big company won’t. I saw that. As we started to work, Honest Tea got bought by Coca-Cola.
I started to see when new venture ideas emerge in Coke, they weren’t as committed to success. In Honest Tea, I had not just my living and paycheck on the line. I had bet the house. I had bet everything against it. I was signing letters of loan guarantees for the business that was far in excess of my net worth. The only way that I was going to fail is I’d be carried out on a board.
There’s extra motivation in there.
[bctt tweet=”It’s hard to blame people for unhealthy diets if the only thing available to them is not healthy.” username=””]
There’s also this belief. Going back to our earlier discussion around change, this is an urgent cause both around diet and around the planet. As a species, we cannot continue the way we are living. There’s a great Chinese proverb that if we don’t change the direction we are headed, we will end up where we are going. All of those trends are not where we want to go. We can’t afford to go, our planet can’t afford to go.
I had been a Government major in college. I thought I was going to get into politics as a form of change. What’s been rewarding about this career in business is this is an impactful and enduring way to change behavior. I do look at this as a cause. At this point, money was never the motivating factor for me. It’s nice that both Honest Tea and Beyond Meat have worked out. The change, we’re still in the middle of it. It’s too early to say. If money were the thing, I would have stopped. I would have lost that drive but it was never the driver. It’s about getting to that place. We’re never going to get there. There’s always more to do but feeling that urgency is a great way to feel the drive.
No matter how much drive you have, things aren’t always going to go perfectly. Sometimes things may not go perfectly for days or weeks on end. There’s this element of resiliency and adaptability, two other core characteristics that are essential for an entrepreneur at any level in an organization. It’s important to quantify that in this conversation we’ve had, specifically in episode one, where we talked about how entrepreneurs exist at every level in organizations.
If you build an organization that encourages innovation, growth and bottom-up input, you will have people who will drive the organization forward, even from the bottom up. We want to make sure that we think about these terms in this conversation. It’s not always about the top-down. It can be from anywhere in the organization. We define resiliency as perseverance in the face of challenges. Adaptability, we say we adjust one’s behavior to the situation. Change, when things aren’t working, we find solutions to complex challenges without throwing our hands up and claiming, “It’s not possible. It’s too hard. It can’t be done.”
You’ve referenced the three Ps of entrepreneurship, passion, persistence and perseverance. I would call them drive, resiliency and adaptability. Two of your biggest challenges were distribution and operating capital. They’re two challenges that you were able to navigate due to what you called lessons learned as a Red Sox fan in the ‘70s and ‘80s. We have to dig in here because you were at Harvard and I was across the river at BU. We have this connection and this affinity for the Red Sox there at Fenway. If you don’t know, in episode three, we had a former Red Sox second baseman from that era and Red Sox Hall of Famer, the president of Red Sox Nation, Jerry Remy.
Jerry came on and he talked about the lessons learned from the Red Sox that are applied to people’s lives in whatever they do. A big part of that was this resiliency and this adaptability and having to grind it out, having to figure it out, especially in those formative years. He recalled them in very much the same way of the ‘70s and the ‘80s when they were like, “Another day.” He talked about how in one year, they won almost 100 games and they have deemed failures because they didn’t go to the playoffs. They had lost a one-game playoff to the Yankees. It was like, “We won 100 games. What do you want?” Everyone’s like, “You’re terrible. You suck. Get out of here.”
You credit these three lessons primarily to the fandom of the Sox. It’s what you call the manufacturing runs, “There’s always April and you’ve got to win in New York.” I’m hoping that you might be able to break these down a little bit. Talk about how the Red Sox has this need to have to figure it out, get back at it, reverse the curse, and what it can do for you, and what it did do for you in building the business.
Let me clarify it. It absolutely played a role. There were others as well. I’m sure we’ll talk about those too. As a young fan, and everyone can probably relate to this, you get identified with your heroes. You want your heroes to succeed. It just so happened that I had the exact same birthdate as Carl Yastrzemski who was the heart of the club in the ‘70s. He was my guy. They would get into these heartbreaking losses. I was ten years old in 1975, which was the year they did go all the way to the World Series and lost in a heartbreaking way.
When they lose, it’s painful but then you get back every spring and you’re like, “Maybe this is the year.” It’s this renewal of hope and that is an important and useful skill. As an entrepreneur, you have to renew that overnight. You could go to bed and crash, “We’re unable to make the product. We got some issues.” You’ve got to wake up in the morning and you’ve got to be able to renew that hope.
I’ve always said the most important resource an entrepreneur has isn’t time, it’s the energy the entrepreneur has. What kind of energy? Hopeful energy and positivity are something you can infuse into your team. Conversely, negative energy is something you can also infuse into your team. It’s critical to be able to regenerate that hope.
The Red Sox is such a fun organization because they’re such a diverse group of people in terms of who the fans are. They’re closely connected to the city. There are a lot of characters like Jerry Remy, Yaz and Carl Yastrzemski. It’s an easy team to get closely associated with. They always had that underdog mindset. To put it in beverage terms, the Yankees were the big beverage companies and the Red Sox were the challenger brand. Could they ever succeed? I identify with that mindset of the challenger.
Even with Honest Tea, when we’ve been bought by Coca-Cola, I still have that challenger mindset. That’s critical because even though our brand now had resources, we still were challenging the prevailing dietary preference around beverages, which was for more sweet drinks. I was part of the Coca-Cola Company with a challenger mindset and it continues to be the way I look at the world. That’s an important mindset to have for entrepreneurs, baseball teams or fans.
Specifically, in manufacturing, it was an interesting way you approach solving the manufacturing and some of the distribution problems where people said, “We’re not going to take you.” You’re like, “I don’t need the big guys.”
The distribution was classic. I tried going to the big guys and saying, “Can you distribute this product? We think we have some potential here.” Like any large company, they’re going to say, “There’s not enough volume to make this worthwhile for us.” First, I was making the deliveries myself for a few weeks’ worths. I got some nice accounts up and running, but I couldn’t keep up with it and it certainly wasn’t the way to grow the business. Every time I was driving my Saturn station, raging around making deliveries meant I wasn’t focused on selling in the chain, worrying about production or the capital to grow the business.
I quickly started to identify alternative routes to market for our business. The first one we worked with was a cheese distributor who is going to gourmet stores. I’m like, “If you’re going to gourmet stores, you can take us along.” I found that I wanted to get into the delis. I found a corned beef distributor who was going there and I said, “You can take us on the trucks.” Even to get to the grocery store, I was trying to figure out how to get there. It turns out, there was a guy who distributed charcoal. He was happy to put us on his truck as well.
We put a patchwork of distribution together and eventually, these big companies started to see our brand taking some shelf space from them. I wouldn’t say they returned my calls, but that’s when I started to at least be, “Let me be in the lobby and wait until the CEO would walk in. I can give him a bottle and a little bit of a pitch.” You’ve got to find a way to achieve your outcome. If I had only said, “I’ve got to get it with a big distributor,” the business would never have gotten off the ground.
Let’s talk about money or in your case, a lack of money because this is another area where you had to show tremendous adaptability. You experience things like your customers aren’t paying. I think about this in our own business. You run a cashflow model and you think, “I’m going to send the invoice and they’re going to pay me right away. I’m going to have operating capital to cashflow everything else.” All of a sudden, that invoice doesn’t get paid and you’re like, “What do you mean you didn’t pay me?” They’re like, “I don’t have it.” You had to deal with this. You had to deal with inventory bills and investment in marketing. Can there be an investment in marketing?
I always tell companies what happens. From my time in security, you notice what happens is when money gets constrained, the first two things that go out the window are security and marketing. They’re gone and cut. You said, “Limited resources forced us to find creative ways to achieve our goals. You need to raise enough money, so you don’t run out of cash, but not so much that you feel flush. Too much money will make you stupid.” What’s the sweet spot when it comes to money? How do you maintain fiscal discipline when there is constant pressure to have more money because people will start to think, “If I have more money, all my problems will be solved?”
[bctt tweet=”Understand the terrain, understand your tools, and use them as well as you can. Don’t try to compete with somebody else’s tools.” username=””]
I go back to that challenger mentality. It was interesting because Honest Tea started in 1998. If you think about what was happening in 1998, 1999 and 2000, it was this whole dot-com boom. I had classmates of mine from Yale School of Management who are raising millions of dollars to launch their dot-com ideas. I was trying to raise $25,000 at a time from Angel investors for a beverage business that seemed very old school to them. I never was burdened by having too much money around.
There were some distributors who didn’t pay us and cheated us, but then there were other distributors. I see this even now here in Eat The Change as we launched the new business. I was expecting a check for $34,000 from the distributor. By the time we got all the different charge bags for this slotting and this promotion, I got a check for $93. I’m like, “What?” That wasn’t what I was expecting. You’ve got to find different ways to still achieve your goals.
One of the things we did on Honest Tea very well was we developed great relationships with our suppliers. Beverages are seasonal. What I mean by that is I’m not selling a lot of iced tea in January but I’ll sell a lot in April and May. I would go meet with our bottle supplier. He was our largest vendor and I would drive up to King of Prussia, Pennsylvania. I’d sit down with him and I’d say, “The way our business works, we’ve got to build inventory to be available in April. My cash gets tight as I look at February, March. Let’s extend the terms. Rather than having me pay you in 30 days, can I pay you in 60 or even 90 days for some months? We’ll get back up to speed on good terms by the time we get to July.”
He agreed and every year, we got to good terms by July. It was an annual thing. For more than ten years, we worked on that basis but it allowed me to achieve my goals. He grew his business and he was one who had resources to help support it. There are ways to still achieve your outcomes. The one area that I was always clear with our team is we’re never going to out advertise our competition. We shouldn’t be doing conventional marketing. That’s not going to be how we reach our consumers. That’s an important mindset as well. Understand the terrain, understand your tools, and use them as well as you can but don’t try to compete with somebody else’s tools.
Especially in marketing, you were going up against the big ones like Pepsi and Coke. Those marketing budgets for a single campaign of one product were larger than your gross revenues at that time. I want to talk about humility, which we define as accurate self-awareness and introspection. It’s the ability to accept that we don’t have all the answers and we may need help. Humility is often the first step to resiliency and adaptability. You can’t be resilient and adaptive if you never can look inside and say, “I’m not doing well.”
If you’re looking in the mirror going, “I’m amazing. The numbers lie.” We always say that the numbers don’t lie. You’re lying to yourself if you think the numbers are lying. Many humble moments come on the back of failure and loss. One of the biggest failures, both financially and in terms of time and effort was probably this purchase of the production plant. The decision to buy the plant came out of one of your earliest realizations in a core value, which is critically important. It doesn’t matter how good it is for you if it doesn’t taste good.
The theory became, “In order for it to always taste good, we have to control production. If we control production, we control quality.” There are all these other things that happen like contamination or glass in the bottle that then make you look inside and go, “Do we want to run a manufacturing plant?” Can you talk a little bit about why did you feel at that time it was so important to control production? Why did it become such a challenge so quickly? When did you and when does an entrepreneur take a step back and have to say, “We’ve got to cut our losses and we got to figure something else out?”
It’s an important strategic question entrepreneurs face. In addition to ensuring quality, we also wanted to assure supply. We initially set up production in an apple juice packing plant when we were trying to figure out how to make our first batches of tea. We would use these big mesh bags that you might use to clean up a pool or an oil spill. We would put tea leaves in them and dump them in water in this apple plant and they were humoring us over the early spring when we launched and through the early summer.
When we got to the fall and they said, “Now it’s apple juice season and we can make more money packing apple juice than we can with your tea so we’re going to cut your production days way down.” I’m like, “I did the math. We’re not going to be able to sell more than a few hundred thousand dollars of tea with these guys if that’s how it’s going to work.” What could put us out of business is not having any product, so we decided to become part owners of a bottling plant. In retrospect, it was the wrong decision because, in addition to all the headaches you outlined, it also meant that I was putting a ton of energy into running a bottling plant. I ultimately realized that what I’m much better at with Honest Tea where I became more valuable is to build a brand, a team, a culture and a passion that connects with consumers.
It was outside of Pittsburgh. Instead of spending eight hours on the road every few weeks driving there and back to Pittsburgh, and worrying all about cashflow, change parts and labor shifts at a bottling plant, I should have been focused on building a brand, connecting with consumers and innovating. It was only after we made that step away from the bottling plant that I was able to do those things, and the brand started to realize its potential. It’s a common mistake. As a business, we lost over $1 million on that plant.
In retrospect, what we should have done was go back to that apple juice plant and say, “I know you guys can make more money packing apple juice, but let us pay $0.50 more a case to stay at the apple juice plant.” All of a sudden, maybe that would have cost us $100,000 more a year but it was still better than losing $1 million over time. That is often a mistake that entrepreneurs are making. Ultimately, it was a recognition of what was the value we were building. By the time we were with Coca-Cola, they had much better production facilities so we were like, “We don’t need that.”
We want a valuable brand. You have to think about what you are building that’s ultimately going to be valuable. For the entrepreneur, what are you passionate about? While I did a respectable job managing the bottling plant or doing my part to help manage it, it was not my wheelhouse. It wasn’t my passion so it wasn’t feeding me. Going back to what I said earlier about how the energy of the entrepreneurs are the key asset of the enterprise, I was sucking the energy out of me and out of my passion for the business. Every time I would be driving to Pittsburgh and worrying about things that had nothing to do with building a powerful brand.
Shelly Paxton was on a couple of episodes and she talked about soul sucks and soul fuels. Shelley was the CMO of Harley-Davidson and then she left. She walked out and said, “I’m going to go.” She’s the chief soul officer and she became the chief soul officer of her own life. She wrote a book called Soulbbatical. In the episode, she said, “You have to define your soul sucks and your soul fuels. If you can eliminate those soul sucks in favor of the soul fuels, whether it’s in your personal or professional life, it allows you to then channel that energy on the things that have been more impactful.” When I think about this, I think about that. That was your soul suck right there.
Integrity and curiosity. You said, “You have to build something you believe in right from the start.” We define integrity as the quality of being honest and having strong moral principles. I personally believe that we’re most impactful when we’re acting and serving in good faith and with honesty because it’s easy. It’s easy to devote energy when you’re being honest and truthful. It’s harder when you’re trying to deceive someone.
You also said, “Think ahead about what you want to accomplish.” We define curiosity as the desire to learn or the desire to know something. Personally, visionaries and transformative leaders challenge the status quo. They seek answers to these questions that a lot of people don’t even realize that they may have. They develop products that people don’t even realize they want or need. Think about Apple, the iPhone, the EarPods, and the things that we can’t live without. Beyond Meat comes to mind and the things that you’re doing with Eat The Change and PLNT Burger in a sense of people didn’t even know they want these things and now they can’t get enough of them.
Honest Tea’s mission was to create and promote great-tasting healthy organic beverages. You said, “We strive to grow our business with the same honesty and integrity we use to craft our recipes with sustainability and the great taste for all.” Eat The Change’s mission is, “Our choices about what we eat represent our single biggest daily opportunity to change our environmental footprint. Eat The Change combines marketplace solutions with education and activism to empower consumers to make dietary choices aligned with their concerns around climate and health.” For PLNT Burger, “We strive to respect and celebrate the beauty of life on our planet in the most delicious and fun way possible with indulgent crafted plant-based burgers and an uplifting dining experience. We invite you to eat the change you wish to see in the world.”
[bctt tweet=”It takes humility to empower others. ” username=””]
Nothing is more forward-looking, honest or has this curiosity than that because I think about these three mission statements that have defined so much of what you’ve done. This is honest. This is integrity. This is the curiosity to want to do more. I’m wondering what you learned in the development of Honest Tea that you are now applying now at PLNT Burger and Eat The Change? It would have been so easy to put high fructose corn syrup, increase sugar, forget the plant-based food, put something processed in there, and worry about cost margin, ease of production and scalability. You have always stood up for fair trade, community integrity and curiosity.
Honest Tea initially started as an idea, which was could we achieve these goals around health, environment, and economic opportunity as a business. The answer was yes, we could. The key to it was we had to be able to build a brand that was meaningful. When we did that and the consumers embraced it, then we could help provide lower-calorie drinks that did help remove billions of calories from the American diet. We can help shift the way tea has grown to more emphasis on organics, meaning avoiding the reliance on chemical pesticides, fertilizers and artificial ingredients.
By buying through fair trade, we were able to bring economic opportunities to the communities that didn’t have access to it. All of those things are achieved when we sell a bottle of tea. What attracted me to Beyond Meat was this idea that if we can successfully commercialize a plant-based protein, so it tastes and replicates the texture of meat but is made with plants, we have the ability to impact people’s health. There’s less cholesterol and other externalities associated with animal-based meat.
We can help move what happens in the environment because greenhouse gases come from the livestock industry. We can also affect the constraint on resources when a Beyond Burger can be grown with 99% less land and 93% less water compared to an animal-based product. The idea is, can a business be a vehicle for change, a vehicle for an activist to pursue agendas? My background before I went into business school was in the nonprofit sector. I was quite comfortable thinking about making change happen, either nonprofit or as I mentioned in politics. I learned with Honest Tea that it can be done. The key is you have to still make sure you’re providing a solution for the consumer. Just because I care about these issues doesn’t mean the consumer cares about them.
When a consumer goes to the store, they don’t say, “I’m hungry. Maybe I’ll go find something that can save the planet.” It’s, “I’m hungry. I want something savory, delicious or that’s going to give you some energy.” That’s what we’ve got to make sure we’re communicating. I’m fortunate with Eat The Change. My cofounder is Chef Spike Mendelsohn who’s a wonderfully creative chef. We didn’t just make a plant-based jerky. We took mushrooms which for a chef is the ideal palate because they can take on any flavor. I said to Spike, “Make the most delicious mushroom jerky you can make. Use any ingredient you want. We’ll figure out how to make it sustainable,” and that’s what he did. He came up with these amazing recipes and I said, “This tastes great.”
For example, he made teriyaki ginger mushroom jerky. What we’ve learned is that it has to be organic because that’s part of our environmental commitment. We also learned that we want to address food waste. We’ve got to be able to use all different shapes and sizes of mushrooms. That doesn’t impact what he’s doing at all because, for him, the mushrooms take on the flavor, whether they’re small, big or misshapen. That’s not an issue. I also said, “It turns out there are six crops that are responsible for 57% of all agricultural production. If we’re serious about biodiversity, we’re going to leave all those crops out of the recipe.” He’s like, “That means no soy, no wheat, no corn, potatoes, sugar, cane or rice. That is a lot of the food that we eat.”
What’s left?
It turns out, that’s a chef’s challenge. He was a contestant on Top Chef. He was like, “All right.” He was able to work with it. The point is we ended up with recipes that were delicious, well branded, and well packaged. As long as you do that, whether the consumers share our agenda or not, they are going to have their needs met. If we’re meeting the consumers’ needs, then we get to pursue the issues we care about. It’s nice that the consumers support us and agree with those issues, but it doesn’t matter at the end of the day.
The mushroom jerky is cool.
Thank you. It’s fun.
I’ve ordered some but you have sea salt and cracked pepper, hickory smokehouse, maple mustard, teriyaki ginger, and habanero barbecue.
That’s a spicy one.
The size of some of these mushrooms is absolutely massive.
It’s so fun. Spike is so creative with the recipes. He’s not just putting in a chipotle but let’s go with habanero. That’s where the real heat comes from. We partnered with a fourth-generation family farm in Pennsylvania that grows the mushrooms. When we visited, there’s a bin of mushrooms that goes to the retail stores and there are the rejects. I’m like, “What’s going on with those?” “The stores don’t want to carry those mushrooms because they don’t look good enough to be on a shelf.”
I said, “We can take those for the jerky because by the time you’ve infused it in a marinade and put it through a wood smoker and chopped it a little bit, people can’t tell if it was big or small.” Those mushrooms which would not normally go to the retail shelf are perfect for jerky as well as the stems because those also taste great but aren’t sold at retail. For us, those are what we call perfectly imperfect mushrooms. That’s a great way for us to address food waste but also lowering our cost of goods. To the consumers, it all tastes great.
You brought up your partner in this, Spike Mendelsohn. I want to use that to transition into team ability because he’s not the first partner or cofounder you’ve had. In fact, co is all over everything that you’ve been a part of. That’s hard. In the military, we said, “You can’t have two people in charge or if we’re all in charge, then no one is in charge.” There’s tremendous value in this title, co, especially when it’s a partnership and there’s a complementary partnership.
At Honest Tea, your partner said, “Seth’s personality makes him a great match for me. As business partners, our skillsets complement one another.” Barry was the conceptualizer. He was logical, analytical, fact-based, organized, practical, outgoing. He was the coordinator of sorts. You were what he called the protector, dutiful, meticulous, supportive, optimistic, enthusiastic values-driven. You were the constant enthusiast driving everyone forward.
Barry also said that you spend a lot of time with a business partner, so you should enjoy being with that person. He said, “Seth helps me become a better person.” Can you talk about these partnerships? How do you assess a partner? In both of these situations, this was you going and saying, “I have this idea. I need someone.” You pushed the Beyond Meat burger under Spike and said, “Try this thing.” Initially, he’s like, “I don’t know,” but he got on board and the same with Barry. How do you assess partnership? How do you look at someone and say, “This is somebody that I want to work with?” Many of these business relationships are sometimes worse than a marriage.
First, we’ll go back to what we talked about around humility and that’s a critical quality. Part of humility is a recognition that you don’t have all the answers or you can’t do it on your own or there are other people who can do certain things better than you. Humility is an important quality. Humility is not just important in terms of getting cofounders but in terms of an organization. Unless you have humility, you’re not going to empower your team to take action.
It takes humility to empower others. Going back to Honest Tea, I’ve never learned to run a business before. Barry was a professor and he’d been on corporate boards and had more experience. He was somebody who had a lot more knowledge about a business. He had been my professor so he’s a wonderfully creative and divergent thinker. There’s a phrase, “If two people are thinking the same thing all the time, one of them is not thinking.” We needed a diversity of thought to understand to find the right approach. When there were things neither of us knew, we can work through an issue and decided together.
Cofounders are great. What often is missing and it hasn’t been missing in my enterprises is clarity of roles. As long as there’s clarity of roles, the cofounders can be great. If it’s fuzzy or if you have a co-CEO arrangement, which I don’t believe in, then no one is in charge. With Eat The Change, as I was building this brand, I had a name that I loved but that’s not a name that drives taste. You’ve heard me talk about our environmental commitments. Those are important to me and to what the brand represents, but those aren’t about taste. I needed somebody who could make sure we had taste addressed as a credential for the brand.
Working with Spike who I had already known from our work at PLNT Burger, I knew he could deliver a delicious product. He is creative not just within the kitchen, but even in social media. We have a perfect balance there. I’m the CEO of the business or the chief change agent but we both understand that. I consult him on any important strategic decision but I don’t pretend to tell him what to do in the kitchen. He doesn’t pretend to tell me our cashflow should be adjusted or something like that. As long as we have clarity of roles, then we can be complementary with each other.
I want to ask you about personal relationships. You’ve made that a big part and it dovetails after the conversation about these partnerships and having to develop these close partnerships. Trust comes into play. It’s a huge part of this but you spend a lot of time, and still do, developing deep personal relationships. You talked about it with your fair trade partners, your suppliers, and your distributors. You also spoke about it with your team and how you developed your team and the organization. You said, “The unheralded moments were what made the difference in our success, and those extra efforts represent the behavior you can’t buy. They are the result of dedicated people inspired and united by a common mission and goal.”
This is important because you can’t bring people together to a common mission and goal if there’s no trust. If you don’t know what each other are after, you don’t understand their roles and clarity behind that, you don’t build that common bond, you’ll never get there. Can you talk about building an organization that’s based on the importance of people, the relationship between them, and the trust factor?
It is critical and it goes back to what I was saying around empowerment. You can’t motivate people. If you tell people what to do the whole time, then they feel like they’re order takers. They’re not entrepreneurs in their own right. If you help them identify a goal and help them identify how to get there and provide them with the resources to get there, but then step out of the way, that’s the best way to create trust. They’ll say, “This person believes in me and believes I can do it.” That is an empowering opportunity for an individual.
You have to make sure you’re giving them the right guidance along the way and hold them accountable. That is how you create trust with people. It’s also important to recognize the roles and respect. The most important relationship I have in the world is the one I have with my wife because she’s my cofounder in our family and in our relationship. I’ve always got to make sure that I don’t take that for granted.
It’s easy when you’re the leader of a company to say, “I’m a leader of the company. I’m a leader of a family,” and you’re not. You’re a cofounder. You should have a say. Every once in a while, it’s funny because we’ll be cooking a meal together and she’ll say, “Cut up the onion,” and I’ll start doing them. She’ll step in and say, “You’ve got to do it this way.” I said, “You’re not empowering me. You’ve got to respect. Give me the knife, give me the onion, give me the cutting board, tell me what to do, and let me do it.” It’s a little bit of teasing or a bit but in every relationship, you do need clarity of roles, but you also need to have trust. Ultimately, the best way to demonstrate trust is to give people the power to act on what they care about.
There’s the other side of trust though that we need to explore for a moment because you have put a lot of focus on building the team and empowering others. Also, one of your core tenets is don’t delegate at the beginning. You’ve said, “The best way to get a handle on the business is to learn every aspect. You’re not supposed to know what to do, but don’t be afraid to try doing it all because you’ve done all this. I can have a conversation with any employees, supplier or customer on what they do, ask challenging questions, and not get snowballed.”
That takes an incredible amount of time and energy, especially if you’re scaling a business. There’s a risk of being too involved and not delegating enough. There are so many examples of founders who stifled growth and innovation. They won’t get out of the way. They’ve been in the company for 8 to 10 years. If you ask someone a question, they still say, “I’ve got to go to the founder and ask them if that’s okay.” This is a simple question, “What do you want for lunch?” You don’t have to ask the founder.
Maintaining this balance takes what we call emotional strength. We define emotional strength as emotional control in a stressful situation, bringing calm to chaos. When you’re involved in all this, it creates stress. When you’re not involved with all this, it creates stress. You have to have this emotional strength to control your emotions and balance that. What is the balance between making it happen yourself getting out of the way and letting experts handle it? How do you know?
[bctt tweet=”In every relationship, you need clarity of role, but you also need to have trust.” username=””]
It’s about scale. My comments about the entrepreneur and everything are important at the beginning of the business. When you’re standing up the business, you do want to be exposed to all the details because by definition, if you’re growing the business, eventually you won’t be exposed to all those details. You still have to understand how things work under the surface. As you grow, it does get more complex. You ideally hire people who know more and can do more, but you have enough knowledge of the dynamics of the structure of the business that you can still have relevant conversations. That’s how I think about it. Not every startup starts super small but I like to do that. I like to start from scratch because that ensures that I’m on the ground floor of our learning because you learn so much in those first few months. Those learnings inform how the business grows going forward.
The advice you give to new entrepreneurs is to run away. You spent over twenty years building Honest Tea. You sold it to Coca-Cola in a successful exit. You’re chairman of the board at Beyond Meat, another innovative transformative company. You have now jumped back into the startup world and launched Eat The Change. Let’s discuss effective intelligence, which is the application of one’s past experience and knowledge to the current situation.
The cumulative information that we have lived and our experiences are what then shapes our ability to make decisions and affect our future. Your lessons in the past have provided you with a perspective on how to build a business in success and failure. We could sit here and make a viable argument that you’ve made it. You don’t need to go start over in something else. Why jump back in? Why say, “I spent a career doing this. Everything’s good in my life but I’m going to jump back and start again in something different.”
It goes back to that opening conversation we had around the change. If I felt we’re on the right trajectory, if our agricultural system is getting better for the planet, if the health trends suggest people are shifting toward more organic or more plant-based diets, I’d say, “We’re good,” but it’s quite the opposite. The work is not done. If nothing else, I feel a responsibility to use what I’ve learned to help us move in that direction but I’d also say I feel an opportunity. I do like growing things. I see where there’s more opportunity to move people to certain categories where the options aren’t as healthy or aren’t as sustainable as they could be. Can I play a role in shifting what we eat and how we eat it?
Eat The Change is a combination of several initiatives. There’s PLNT Burger, which is rapidly scaling and opening new stores. You have Eat The Change, Impact, which is a grant program with the goal of donating more than $1.25 million over the next three years to support diverse groups of nonprofit organizations. We spoke about the mushroom jerky. You have the incredible planet challenge, which are these 21 challenges that allow you and show you that you can make simple changes, simple swaps in your every day to then bring change to the world. Can you talk about these different initiatives and how each one of them is driving towards that goal that you talked about?
This is a movement to shift people’s diets. Any movement needs participants from all sectors. With the grant program, we announced 36 organizations around the country, whether it’s an urban farm in Los Angeles or a Native American community that’s trying to reconnect to some of the historical crops they used to live on. These are different organizations working to shift people toward healthier diets. That’s on the nonprofit side. The restaurant PLNT Burger is a food service to make plant-based eating delicious and fun, and as accessible as any fast food restaurant. We are opening up our tenth restaurant. It’s a fun way for people to access that product or that approach to eating.
Eat The Change is an on-the-go snack. The mushroom jerky is the first product but these are all part of the same theme, all part of the same emphasis. We hope consumers will embrace what we’re doing, whether it’s at a restaurant, or maybe they’ll be involved and exposed to one of the nonprofit organizations who are supporting. Also, be able to pick up a bag of jerky when they’re hungering for a savory snack.
Seth, as we close out, the Jedburghs had to do three foundational core skills every day to win. They had to shoot, move and communicate. If they did these three things every day and they did them with precision, it didn’t matter what challenges came their way. They could divert their attention into solving those other challenges. What are the three things that you do every day to set the conditions to be successful?
The first is I wake up with my wife and we make the bed. It’s not only important because it means at the end of the day, we’ll have a welcoming place to lie down but it’s our way of saying, “I’m your partner in the day, in your home and in your life.” We’re living together. That’s one thing. The next one for me is I’ll go out for an hour of some form of exercise. Running, biking and swimming are usually the ones I’m most frequently doing. It’s a great moment to clear my head to put things in perspective. I always do it outside even in the coldest months. It’s a great way for me to also connect with the earth.
When I was out in Los Angeles, I was able to run alongside the water, the sand and to feel the air around me. It helps me keep my place in the world in perspective. That’s an important thing. I get to work and the one thing I am always mindful of is follow-up. As a work discipline, I never commit to something I can’t execute on. I never let somebody reach out to me and not hear back. Doing what you say and coming through delivering on what you say is a critical part of how I work. I want to be regarded as someone who lives up to the word commitment and being authentic about that.
Make the bed every day, exercise, follow up, stand by your word or do what you say you’re going to do. I love those three. We spoke at length about the nine characteristics of elite performance. We told your story through the lens of these and provided those lessons learned. Also, those valuable ways in which we can become better every day if we can think about these characteristics and apply them into our everyday world personally, professionally, emotionally, spiritually and mentally.
We talked about the nine and I say, as an elite performer, you have to have all nine. You can only demonstrate a certain number of them at any one time. I always go the opposite direction at the end of this and I’m going to give you one. I’m going to tell you the one that you exemplify. I will tell you in transparency, before this conversation, I would have said drive for you but I have to change that. I’m going to say integrity because integrity is doing what’s right. Identifying right from wrong, but integrity for you has been your driving factor. It’s what has led you to create Honest Tea and to be part of an innovative company like Beyond Meat to then create Eat The Change.
There is integrity behind doing what’s right for people and for empowering people to become better versions of themselves for themselves, for their families, for society. That comes down to a true understanding of what is right for all factors involved. Seth, you’re an inspiration. You’re an entrepreneur. It was amazing to sit here and speak with you. I’m a guy who has 35 new ideas a day and I always want to pursue them all.
After hearing your story, speaking to you and reading your book, it has certainly forced me to think about maybe a couple that I should focus on and drive them to success because if there is this focus, you can get further. We all have something to learn from you. I sincerely appreciate your time and I look forward to the future of Eat The Change and what you will continue to bring to the world.
Thank you, Fran. I enjoyed the conversation and I certainly appreciate your kind words around integrity. That’s a wonderful characteristic or trait to try to live up to. I’ll do my best.
Thank you.
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