Innocent but no ingenu
An offbeat and laid-back style belies a clearly focused and steely approach to brand marketing at the UK's leading smoothie company innocent which has taken the soft drinks market by storm. Annette Farr spoke with co-founder Richard Reed about the brand's phenomenal success and plans for the future.
In August 1998, university chums Richard Reed, Adam Balon and Jon Wright spent GBP500 on fruit, made some smoothies and took them to a London park jazz festival.
They erected a sign saying 'Do you think we should give up our day jobs to make these smoothies' and provided, one 'yes' and one 'no' bin for the empty bottles. The full 'yes' bin prompted the trio immediately to begin the "innocent" adventure.
The story, of course, is now legendary. From innocent's humble start in 1999, the brand has become the UK and Ireland's No 1 smoothie.
Back in 1998, while familiar in the juice bars of California, the smoothie was a relative unknown in Europe. The category's growth has been remarkable and innocent's particularly impressive.
Over the last two years, the brand's market share has leapt from 25% to 65%, crucially overtaking PJs, the company responsible for first introducing smoothies to the UK, acquired by PepsiCo in early-2005. Turnover has rocketed from GBP16.7m in 2004 to a forecast GBP75m this year. Over 1m drinks are sold each week in 6,000 outlets. The workforce at Fruit Towers has grown from 45 to 105 in one year (with vacancies waiting to be filled) and there are now four production sites.
Smoothies are on a roll. Britvic Soft Drinks Category Report 2006 noted that the smoothie category itself outperformed all others in 2005, growing by 73% in value.
As co-founder Richard Reed says: "They've grown from niche to something much wider. With health being such a key issue, they tick all the right boxes on quality, taste and goodness. In a way they're the panacea for the food world."
Rather than reach a plateau, Reed maintains smoothies will eventually outgrow juices. "We have a very clear path of growth to 2010 and beyond. We're incredibly chipper about the future."
The key to innocent's success has been to remain focused and to innovate. For example, the recent launch in 1-litre Tetra Pak cartons has generated some GBP30m revenue and the introduction of the first smoothie for children has been very well received. Juicy Water, introduced some two years ago, is "nowhere near as big as smoothies but has nevertheless doubled in size," Reed says.
The company's first love though is the smoothie. Visitors to innocent's headquarters at Fruit Towers off London's Goldhawk Road with its faux grass carpet, picnic tables, umbrellas, table football and beanbags, should not be fooled by the 'laid-back' atmosphere. The operation is slick and professional with a dedicated workforce. Drinks are delivered on time, beating industry best practice standards, solid customer partnerships have been created, and retailers supported by promotional and marketing activity, all building brand awareness.
The heart of Fruit Towers is the kitchen. This is where 'Cherry Picker' Lucy E and colleague Lucy T experiment with fruits, concocting new smoothie recipes. Eighteen have been introduced over the last two years along with seasonal smoothies, such as cherry and strawberries for this summer, special guest smoothies, the most recent being mangos, lemongrass and coconut, and thickies, a more indulgent yoghurt-based drink.
Taste remains the company's number one priority. innocent has won more taste test awards than its competitors, scooping Best UK Soft Drink in the Q Awards, the UK's principal food industry competition, every year since 2002. Only 100% fresh crushed fruits and pure juices are used. Concentrate is not an option.
Sourcing quality ingredients is paramount. Strawberries, for example, are the senga sengana variety grown in Poland because they are the most flavoursome, colourful and juicy. Reed has recently returned from a trip to Costa Rica bringing back examples of the acai berry now being used in a new recipe with pomegranate and blueberries.
Supply and distribution problems can arise over seasonality, as Reed admits. "Yes it can be tricky," he told just-food. "We had to delay the launch of a blueberry smoothie variant simply because we had to wait for the blueberries to grow."
Inspired by the work of the Rainforest Alliance, which Reed saw first-hand in Costa Rica, the company is now aiming to use fruits that have been produced in an ethical and sustainable manner. Bananas, used in all smoothie recipes, are sourced from Ecuador and Honduras and have Rainforest Alliance certification.
Then there is the 'Sustainability Squad' at Fruit Towers, a team which looks at procurement, packaging and emissions, headed by Reed. "We want to become the first fully sustainable FMCG," he explained. "Even at office level we measure our landfill waste versus recyclable waste, we look at how many flights we really need to make, make sure our company cars have low emissions. We also encourage our suppliers to adopt ethical and environmental procedures."
innocent is serious too about its corporate responsibilities, having established its own foundation, whereby 10% of profits go to supporting projects in areas where the fruits are sourced. For example, the company has been working with the Dalit communities in India to assist in regenerating the coastline.
On the face of it, innocent's success seems to have been achieved with unerring ease. Do these guys ever make a mistake?
"We've made tons," admits Reed. "I made a massive faux pas when I spent some GBP10,000 on our first marketing promotion which was to supply our outlets with beautiful metallic fridges in which to keep our drinks suitably chilled. I fell for a salesman's blag as the fridges turned out to be horrid grey plastic boxes which didn't even keep the drinks cold."
However, to date all growth targets have been met and surpassed. But innocent has keen competition from own label, PJ's and Josephine Carpenter's The Big J. The company cannot afford to be complacent, especially since its products are premium priced. So what does the future hold?
"To profit from ethics and to build the brand across Europe," says Reed. "We are currently recruiting for the Scandinavian office, then we shall look at Germany and Spain. Our ultimate aim is to become Europe's favourite little juice company."
Is this all too good to be true? Some would like to think 'yes', but cynics will note that innocent has been likened to Ben & Jerry's, has the corporate philosophy of a Body Shop and product integrity of Green & Blacks.
Surely innocent has had some offers. Reed says: "We're not really on that path. We're not anti-big business though, just anti-bad business. We want to build and grow. We care passionately about what we do and there's a long, long way to go on building our business on ethical lines. We have absolutely no plans to sell."
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