Will Innocent bounce back?

Will Innocent bounce back?

Smoothie makers may be pleased to hear that UK consumers’ spend on smoothies is expected to more than double by 2013.

According to Datamonitor, spend is expected to smash the GBP1bn (US$1.52bn) barrier in three years' time, with smoothies set to become a “must-have purchase”.

It seems that, with 65% of UK consumers now consciously attempting to eat healthily, a smoothie is one of the quickest and most convenient contributors to achieving a person's recommended daily five portions of fruit and vegetables, the report states.

So, what happened to the uphill struggle that we all understood smoothie makers were having as, last year, we watched consumers ditch the category as an unaffordable luxury?

According to the annual Britvic Soft Drinks Report published last month, smoothie sales slid in the UK in 2009, falling by 27% in value and volume during the year, to GBP127m (US$193.7m) and 47m litres.

Indeed, sales started to slide the year before, down by 20% in 2008 to GBP172m, the previous year's Britvic report noted.

Not even a vote of confidence from the UK's Food Standards Agency - which said last year that one smoothie could count for two of the five-a-day - helped to stop the rot.

Indeed, leading producer Innocent Drinks reported pre-tax losses for 2008 as a result of tougher trading conditions and one-time charges. In November, the firm reported pre-tax losses of GBP11.2m for 2008, compared to profits of GBP12m the year before. The firm also suffered a sales fall to GBP98.9m, from GBP112m in 2007.

Innocent tried to escape the pinch by expanding further into other healthy food and drinks, such as This Water and on-the-go lunches, and more controversially, signing a deal with The Coca-Cola Co, which now owns a controlling stake in Innocent.

Vicky McCrorie, a consumer analyst at Datamonitor believes that the move hasn’t dramatically affected Innocent’s sales and that the firm is “ahead of the game” on health and ethicality.

However, with more smoothie manufacturers rapidly coming up with innovations in an attempt to gain some ground, Innocent may have to move a little quicker.

The firm will need to continue to innovate, not only in their product development but in their advertising to ensure they remain different and on top of their game.

So, perhaps it was a clever move by Innocent to allow Coca-Cola to up its stake. And, if the analysts are proved right, we may see the US soft drinks giant as the owner of a decidedly more successful smoothie firm in the very near future.