You have never thought much about soft drinks before, but ever since your kids started going to junior high school and ordering their own lunches, youve become more and more concerned about how much of the sugary, calorie-loaded drinks they consume every day. And not just with your own kids, you wanted to do something to help kids and parents find delicious alternatives to unhealthy carbonated drinks. So it seemed quite fortunate when you got a management position at Honest Tea, a beverage company that is dedicated to providing wholesome, healthy teas and juices that use all-natural, organic, unprocessed ingredients. The company proudly displays its commitment to natural, wholesome ingredients by including a label on all of its products that says No High Fructose Corn Syrup, a sweetener that has been heavily criticized for increasing obesity, symptoms of diabetes, liver disease, and even containing trace amounts of mercury.

While the label is a small, but very public, part of the companys overall strategy of highlighting the companys commitment to quality ingredients, it has caused a serious conflict with a huge investor. When Seth Goldman and Barry Nalebuff started Honest Tea, they had a great time inventing new flavor combinations. What was hard for them was finding stores that would sell their products. They went from store to store with their teas in insulated containers or sample bottles made from empty Snapple bottles.

A few years ago, however, Coca-Cola bought a 40 percent stake in Honest Tea for $43 million. And while the cash infusion was great for the company, what was even better was that Coca-Cola was able to give a huge boost in distribution. Honest Tea was able to take advantage of Coca-Colas nationwide network of distributors, so that it could find a place for its products in stores, restaurants, and cafes all over the country.

But the investment from Coca-Cola had its downside, as well. Coca-Cola executives were quite disturbed by the No High Fructose Corn Syrup label. While it was meant to tout the healthiness of Honest Teas products, the Coca-Cola people saw it as an implicit criticism of its own products, most of which use high fructose corn syrup. So senior managers from Coca-Cola approached Honest Tea with a requestchange the label so that it says sweetened with organic cane sugar or no fake stuff, or better yet, just get rid of the label altogether.

While you and the other managers at Honest Tea want to maintain a good relationship with Coca-Cola, youre worried that any changes to the label will violate the companys philosophical commitments. Some worry that removing the label altogether will go against the companys commitment of letting people know that the products contain no hidden ingredients. Others argue that changing the label at all will be misleading, since it wouldnt be crystal clear to consumers that the ingredients are not artificial or highly processed. But at the same time, you and the other managers dont want to anger Coca-Cola, who not only owns 40 percent of your company, but has an option to purchase all of it in the future.

You and other senior managers have been assigned to a team that will engage in negotiations with Coca-Cola. How will you respond to your biggest investor? Will you give in to Coca-Colas wishes; and if yes, how? Or, will you decide just to stick to your guns and do nothing?

Source:

Elizabeth Olson Can Honest Tea Say No To Coke, Its Biggest Investor? The New York Times, 8 July 2010 available online at http://www.nytimes.com/2010/07/08/business/smallbusiness/08sbiz.html?dbk (accessed September 30, 2016).

Questions

1. How is this decision emblematic of a mangers role as a liaison?

2. How would your team choose to respond to Coca-Colas request?

Your initial response should be 300 words