



As our nation starts a debate about how to make America healthier, we need to make sure we aren’t impairing access to healthier beverage choices. A bill moving through the Maryland General Assembly would do just that by taxing any drinks with caloric or non-caloric sweeteners.
Take the case of Honest Kids. In 2017, McDonald’s began offering Honest Kids as the default beverage option in its Happy Meals, replacing Minute Maid apple juice. Minute Maid is made from 100% juice while Honest Kids is a 42% juice drink.
Honest Kids has only 35 calories per serving compared with the 80 calories in the full juice drink. McDonald’s sells over 200 million cartons a year, so this change effectively removed and continues to remove over a billion empty calories from the American diet every year. In addition, exposing millions of kids to less sweet (not to mention organic) drinks helps cultivate an appetite for less sweet drinks that can create long-term health benefits.
The Maryland bill (H.B. 1469) would tax drinks like Honest Kids but not the higher-calorie Minute Maid — punishing the parents who are trying to make healthier choices for their children. The bill would impose a 2-cent-per-ounce tax on any drinks with sweeteners, whether they are caloric or non-caloric. It exempts milk and 100% juice. The bill would add 32 cents to the price of a 35-calorie (9 grams of sugar) Just Ice Tea bottle while the price of a 16-ounce Tropicana orange juice with 220 calories (44 grams of sugar) would remain unchanged. And a Starbucks chai latte with 240 calories (60 grams of sugar) would also go untaxed.
I’ve been working to promote lower calorie drinks since I launched Honest Tea out of my Bethesda home in 1998. Being an early stage beverage entrepreneur, especially one trying to sell less sweet drinks, can be brutal. In contrast to the big drink companies, we start with zero awareness, distribution or shelf space, and of course, zero advertising budget. One of the things that keeps us going is the ambition to shift what people drink. Over the past two decades, I’ve seen numerous attempts by cities and states to tax or penalize caloric drinks. While the motivation behind these bills might be to advance public health, I have yet to see one that doesn’t also undermine those of us trying to shift the American diet in a healthier direction.
In 2012, New York City Mayor Michael Bloomberg announced plans to ban sugary beverage containers larger than 16 ounces. At the time, Honest Tea was packaged in a 16.9-ounce bottle (500 mL), which meant our Honey Green tea, which had 70 calories, was going to be banned while a 200-calorie Snapple Peach Tea in a 16 ounce bottle would keep its place on the shelf.
Bloomberg’s ban was overturned at the 11th hour but only after we scrambled to find a 16-ounce bottle, design and print labels for the smaller bottle, and commission a full scale production run that eventually had to be written off.
As a smaller brand, Bloomberg’s proposed ban was distracting, not to mention costly — we lost tens of thousands of dollars due to that fire drill.
Since Honest Tea launched in 1998, the beverage industry has seen a transformation toward lower-calorie drinks. Bottled water already outsells bottled soda. Seltzers from La Croix to Spindrift have exploded as their own category. Even the traditional soda category is being disrupted by lower-calorie probiotic and prebiotic sodas like Poppi, Olipop and Culture Pop, which average fewer than half the calories of regular soda.
Bottled drinks in Maryland are already subject to a 6% sales tax, so this additional tax would add to the burden people in our state are already paying.
Furthermore, it is being proposed at a time when Maryland is vying to compete against Virginia to show it is a business-friendly state. This competition has become even more vital as we witness massive federal job cuts that impact millions in our state.
When we add in the extra pressures consumers face from inflation and a housing crisis, this is not the right time to impose a regressive tax, not to mention a levy that penalizes all beverage producers, including the folks trying to offer healthier options.
Seth Goldman is the co-founder and CEO of Bethesda-based Just Ice Tea. He was also the CEO of Honest Tea, which was sold to the Coca-Cola Company in 2011.