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Brisk Sales Still Brewing at Honest Tea

The economy may be down, but sales growth is still brewing at Honest Tea.

CEO Seth Goldman says his company's line of bottled organic teas are an "affordable indulgence," and that is keeping sales brisk.

Sales are up by more than 60 percent in the past year, and without the slowdown in the economy, Goldman says he's sure sales would have risen more.

"I think one of the things that have helped us is that we've always maintained a minimal price premium," Goldman says. "So it is premium, it is organic, but we've not been priced at 100 percent more than Snapple or the other drinks, it's 10 or 20 percent. That keeps it within reach."

(To hear the full interview, watch the video above.)

Although Goldman also credits the brand's growth to consumer interest in organic and sustainable products, there's no doubt the brand has gotten an extra boost from the Obama factor and from a partnership with beverage giant Coca-Cola .

Honest Tea's Black Forest Berry is President Barack Obama's favorite drink, and this bit of trivia has lavished a little more attention on the brand in recent months.

Meanwhile, Coke's purchase of a 40 percent stake in the company in February 2008 has had a few benefits as well. One has been increased distribution, and another is a shift in its packaging to a material that allows it to use less plastic resin.

Honest Tea
Source: honesttea.com
Honest Tea

Goldman estimates the lighter package means it will use 1 million pounds less of resin this year alone. And with the price of resin tied to the price of oil, that not only fits in with the company's image, it makes economic sense.

The deal with Coke is one of a handful the Atlanta company has made with start-up beverage companies. The partnerships allow Coke to support brands that may drive potential growth without eliminating the entrepreneurial spirit behind them. This has become important as consumers shift away from carbonated soft drinks and seek wider variety in the beverages they drink.

Coke has the option of buying a bigger stake in Honest Tea in February 2011.More from Consumer Nation:

Questions? Comments? Email us at consumernation@cnbc.com

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