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Coca-Cola Buys Remainder of Honest Tea

Honest T drinks

The Coca-Cola Co. has exercised its option to acquire the remaining 60 percent of Maryland-based organic bottled tea maker Honest Tea, reports The Atlanta Journal-Constitution. The companies described it Tuesday as a chance to make organic drinks more mainstream.

What they didn’t say is that it also may be a chance to invigorate Coca-Cola’s tea business, which lags behind PepsiCo’s. The deal completes a transaction that began three years ago, when Coca-Cola bought a 40 percent stake in Honest Tea.

According to the AJC, Honest Tea will operate as a stand-alone business under co-founder Seth Goldman and his management team.

Financial terms of the deal were not disclosed. Coca-Cola reportedly spent $43 million in its initial investment in Honest Tea, which had sales of $72 million last year.

Honest Tea, started in 1998 in Goldman’s home, has expanded its distribution from about 15,000 outlets in 2008 to more than 75,000.

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