Robin! To the CulturalStudiesMobile!

Barry Nalebuff defends his company's tea-sweetening policies as those of an honest agent making tea in accordance with what the rational utility-maximizing choices of its principals (the tea-drinkers) would be if its pricipals thought hard about the tradeoff of sweetness of taste versus inches on the wasteline:

Marginal Revolution: HonestTea: Barry Nalebuff responds : In May an MR reader alleged that the graph on Barry Nalebuff's tea (NB: Nalebuff is both an economist and entrepreneur) involved an elementary economics mistake. Nalebuff asked if I would publish his response:

I'm afraid Randy Goldstein would have trouble in our freshman economics course at Yale where the Honest Tea label has become an assignment problem. It is true that we at Honest Tea don't put in sugar to maximize taste even by our own standards. That's because the peak of the taste profile is flat -- like most maxima. Cutting back the sugar costs you very little in flavor but still save you a whole lot of calories. In technical terms, it is a second-order loss of flavor but a first-order savings in calories. We like to think that we maximize the flavor-calorie tradeoff, which is not the same thing as maximizing flavor ignoring calories. To say this one more time. Each additional teaspoon of sugar adds 17 calories. But each additional teaspoon of sugar has a declining additional benefit in terms of taste. We stop before the incremental value is zero (the maximum) and only add sugar where its value is worth the 17 calories.

See what you think: try Honest Tea for yourself: learn more at http://www.honesttea.com.

I think that there is much more going on here than rational utility maximization over characteristics of sweet taste and calories. Here is what it says on the Honest Tea label:

Around the world Chai (chi) means tea. In Kashmir, people have mixed spices into their chai for generations. Our recipe features cardamom, a memer of the ginger family which grows wild in tropical forests. We brew our tea in spring water and add just a hint of sugar cane juice. The result is a spicy, aromatic flavor and a sixth of the carlories of the super-sweet tea-flavored drinks.

Barry and Seth think that it is important to tell potential drinkers that Honest Tea contains "sugar cane juice," that one of their spices--cardamom--"grows wild in tropical forests," and that their recipe is derived from one that has been made in Kashmir "for generations." They somehow miss saying that tea has been grown in India for less than two centuries, that the cardamom that goes into Honest Tea has not been gathered wild from the forest, and that "sugar cane juice" is just a way of saying "sugar" that gets the S-word into the position of being a secondary adjective rather than a noun.

The tea is excellent. And the limeade was the only high-yuppie product we could find in the Kings Canyon general store, and was excellent as well.

Nevertheless: "Robin! To the CulturalStudiesMobile!"

Comments

[shah8]

Ah, one of those things that should aid you in your quest for the crunchy granola degree...

Anyways...One modification. Sugar cane juice may well be exactly that. It's actually fairly nutritious if it's the juice and not refined. Also, there is a granolan pushback against corn syrup (which doesn't taste as good as sugar, and much more stressful in terms of sugar hits). Thus the reasons for inclusion may not be marketspeak, or *as* marketspeak as the other items...

[wcw]

Of course, tastes are subjective. I do not take any sugar in my coffee or tea drinks, ever, so for me, every drop of cane juice diminishes utility.

On the bright side, I save a lot of pocket change not buying sweet drinks.

[anonymous]

"that 'sugar cane juice' is just a way of saying 'sugar' that gets the S-word into the position of being a secondary adjective rather than a noun."

The above could only be written by someone who can't
tell the difference between a drink sweetened with
high fructose corn syrup and a drink sweetened with
real sugar!

[piotr]

A tea fanatic:

(a) does not leave his hometown without two-weeks worth of favorite tea-bags (brewing loose tea is tad difficult in field conditions, although it is worth investigating)

(b) eschews bottled tea, which spares him/her investigations how honest Honest Tea is. My 2c: show me tasty sweetened tea and I will show you citric acid added to tea, less acid = less need for sugar.

For drinkers of black tea, conserved milk is a good invention for camping trips (although generals stores typically carry milk in small packages).

[Eve M.]

Regarding sugar vs. sugar cane juice: Nalebuff does appear to say directly in the quote above that they add "sugar"...

[MarcinGomulka]

Holy Sugar, Batman!

[harv]

Still getting used to ordering iced tea in South Carolina. Every other place in the world you order iced tea, you get iced tea. Here, sugar is added unless you specify unsweetened, and sometimes not even then. Maybe a good place to begin your "culturalstudiesmobile" field trip.

[Auros]

I tried an HonestTea product once, because I was amused by the presence of Opus (from Bloom County) on the label.

Personally, I thought it sucked. I'll stick to Tazo, when I want yuppie bottled tea. At home, I just brew my own.

[Mark Kuperberg]

In defense of my former student, Randy Goldstein, the graph on the back of Green Dragon Tea is subject to the misinterpretation that Randy put on it. This is why about 2 years ago we emailed Honest Tea suggesting that they include upward sloping convex indifference curves to indicate clearly that sugar was considered a bad and that the optimum was to the left of the top of the parabola. While Barry Nalebuff responded at with scorn to Randy's comment in Marginal Revolution, we never received a response to our email.

[clew]

The Tale I keep reading about tea in India is that it was growing there before anyone thought of harvesting it; that, when the English decided to clear some forest and try tea-plantations to undercut the Chinese, they found that they were cutting down full-grown, wild tea trees.