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When David and Goliath Work Together: Scaling Up Through Business Partnerships

Words by Net Impact
Investment & Markets

What happens when small do-gooders buddy up with big corporations?

Oftentimes, these kind of partnerships can spur a lot of controversy; some argue that smaller companies could dilute their missions or that this kind of collaboration is more for the press than for the public good.

Yet two high-profile partnerships – Honest Tea and Coca-Cola, Recyclebank and Waste Management – show that partnering big can help companies take their social and environmental impact to the next level.

Taking on a big investor – and its big distribution channels

When Honest Tea, an organic tea company known for wholesome ingredients and socially responsible practices, was acquired by global beverage leader Coca-Cola in 2011, some wondered if the Bethesda-based company would stay true to its founding mission.

But Honest Tea's co-founder and TeaEO Seth Goldman put the partnership in perspective. "The partnership with Coke is fundamental to taking Honest Tea's mission and impact to scale,” he told the New York Times in 2010. “The Honest Tea party is just getting started."

And he was right: Coca-Cola's brand and resources have boosted national distribution of Honest Tea’s socially and environmentally conscious products, while Coca-Cola’s industry position has grown in the booming bottled tea category.

High-profile partnerships like Coca-Cola and Honest Tea’s speak to a fundamental shift in business: using boundary-pushing partnerships as a step toward injecting triple bottom line values into companies who wield big economic influence.

Partnering cooperatively with your competitor

Take the story of another duo: Recyclebank, a young, VC-backed incentive-based recycling startup, and industry giant Waste Management, North America’s largest recycler.

"[The partnership] not only provides us scale of operations, but also scale of resources to really expand across all the pillars of sustainability very quickly now," says Recyclebank CEO Jonathan Hsu.

Instead of competing with what is arguably its biggest competitor, the partnership allows Recyclebank to bring the power of incentives to the industry leader’s 20 million customers. Waste Management can likewise leverage its partnership with green initiatives when approaching potential contracts in new municipalities.

It’s a win for both companies. Breakthrough opportunities like these enable small companies’ innovations to reach a huge scale, while allowing larger corporations to engage in innovative approaches to sustainability.

Moving away from fringe movements

Driving social and environmental change shouldn’t just fall to sustainability managers, social entrepreneurs, and weekend activists. Driving impact from within – through typical business partnerships or conventional roles – is as crucial to changing the status quo as working off-the-grid.

These stories only touch on the surface of what it really takes to make these partnerships work amidst competing agendas and different ways of doing business.

To dive deeper into the details of their struggles and successes, Seth Goldman of Honest Tea, Recyclebank CEO Jonathan Hsu, Coca-Cola’s VP and Chief Sustainability Officer Beatriz Perez, and Dave Aardsma of Waste Management will pair up to give keynote speeches at the upcoming Net Impact Conference on Oct. 25-27 in Baltimore, MD.

Learn more about how they are partnering for impact and get the inside look at the opportunities—and challenges—that confront companies who dare to partner for impact.

Catch these visionary leaders at the 2012 Net Impact Conference, the premier event for students and professionals using their careers for good, taking place in Baltimore, Maryland this October 25-27.

image: A Girl With Tea via Flickr cc (some rights reserved)

Net Impact

Net Impact 2010 will be hosted by the Ross School of Business at the University of Michigan. Stay tuned for coverage!

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