Celestial Seasonings Case Study

Celestial Seasonings Case Study: Exchanging ethics for popularity Is it more important for a company to stay true to its roots or chase profits? Celestial Seasonings is the original herbal tea company in the USA Originating in 1969. They began by producing packs of herb tea and sold to local health food stores in Colorado. They were quickly met with challenges trying to get their products into larger distribution networks. CS was unable to get to sell their products at large groceries and continued selling their products through small independent health stores and groceries. In an effort to increase reach, Celestial was sold to Kraft foods in 1984 which ultimately did not provide a solution to CS’s problems.This is a small example of why it is more important for Celestial Seasonings to stay to their core values rather than sell out. Celestial Seasonings in order to stay true to their values need to be creating healthful, naturally oriented products that nurture people’s bodies and uplift their spirits. Partnering with a large food organization takes away from their core values due to cost, ingredient optimization for mass production. A possible alternative is that CS takes funding they need from Hain and continues to operate on their own. Another option is that they stay partnered with Hain and benefit on their distribution networks however this would damage the authenticity and value of CS’s product. Celestial Seasonings is headed in an unwise path, the proposed solution is to embrace their core values and stay “true to our roots” raise sale price of product to remain independent and authentic. Their strength is in specialty tea and they have an opportunity due to

external/niche factors. Since they have a weakness in the broader tea market because of competitive threats like Lipton they need to dominate the specialty tea market by embracing their ethical and unique ingredient production as this gives them the advantage over the competition. With the globe shifting to a more environmental approach, more consumers are switching to green and ethical trade products. A Captera survey of 1200 US consumers stated “75-t0-80 percent [of consumers are] willing to pay higher prices for sustainable items across food and drink, apparel and household products categories” (Capterra, 2021). With this mindset shift of consumer’s CS is in a great position to capitalize on profit while staying authentic. Since the origination of Celestial Seasonings they have been providing consumers with “delicious teas that improve people’s lives by inviting balance, and commitment to our customers, our community and our planet’ (Celestial, n.d). Staying true to their roots they need to remain independent and authentic.