Eat the Change Raises $14M as Tea Biz Grows

Eat the Change (ETC) has brought in another $14 million in growth capital to fuel its quest of changing consumers’ eating habits by widening distribution of Just Ice Tea and further testing its Cosmic Chews snacks.

“[Building a company] takes resources, but the fundamentals of the business are solid,” Goldman said. “We’ve been really fortunate to have a smart strategic team of people who are advising us and supporting us.”

The round was led by returning investors S2G Ventures and Collaborative Fund, along with the family office for Jeff Swartz, the former CEO of apparel and footwear brand Timberland. Honest Tea co-founder and Eat the Change board member Barry Nalebuff and Chuck Muth, the former VP of sales for Honest Tea, also both took part in the round. When asked if any retailers or strategics had invested Goldman said “no comment,” and that there were “none that he could talk about.”

Prior to this funding, the company had raised over $20 million, most recently bringing in $14.5 million just over a year ago. Goldman said this round will fund ETC for several years, and take it through to the point of cash flow positive. With over $12 million of sales year-to-date, Goldman projects ETC will close out 2023 with $16 million in revenue.

Much of the funding will go towards building out the company’s Just Ice Tea line, which Goldman and his co-founder Spike Mendelson launched in summer 2022 following The Coca-Cola Company’s announcement that it would discontinue Honest Tea, which it acquired in 2011. Goldman said Just Ice Tea is sold in over 5,000 accounts, which is equivalent to the distribution Honest Tea achieved only after eight years in business.

“The growth has happened faster than we thought,” Goldman said.

With 70% ACV in the natural channel, Goldman said ETC now plans to layer in more distribution for Just Ice Tea in conventional grocers and c-stores, and is in active discussions with retailers in both channels . Club, he added, will come further down the line.

“[Natural] is the foundation, it’s your beachhead,” Goldman said. “Becoming the top selling brand in that channel is important and I’m pleased with how quickly we’ve done that. That’s the launchpad that gets us into all the other channels.”

The company debuted a line of Just Ice Tea cans last month at Expo East, which Goldman said offers more of a take-home package and allows the brand to go after multiple placements within the store. Snacks still only  account for 10% of the business and ETC recently discontinued its Mushroom Jerky due to flagging sales. Meanwhile, ETC’s Cosmic Chews have also been given a packaging makeover and Goldman said the team is taking it slow with the carrot-based fruit snack alternative, which is sold in some regions of Whole Foods Market, Giant, Stop and Shop and Central Market. The tea’s performance, he added, is offering a bit more of a grace period to further refine the carrot product.

“Right now we’re a diversified food and beverage company. But again, that could change,” he said. “We’ve got to understand what’s the opportunity with the snacks.”

Capital will also be used for hiring, though Goldman said he plans to run the company leaner than Honest Tea, a reflection of the changing nature of CPG, he added. Many Honest Tea members have returned to work at ETC, including sales directors Becca Ray, Melanie Knitzer, and Richard Tidrow as well as director of people and culture Meghan Horn.

Goldman used the term “karma” to describe the chance to work with and receive investment from prior partners, adding “good relationships and doing right by people, you don’t do [that[ for selfish reasons. But there’s no doubt that having done that the right way the first time is reaping benefits now.”