UK: Innocent Drinks owner narrows FY losses

Fresh Trading, the parent group of smoothie maker Innocent Drinks, narrowed its losses and increased sales in 2009, boosted by significant investment outside of the UK.

Fresh Trading sales for the 12 months to the end of December increased by 6.8% on the previous year to reach GBP112.2m (US$164m).

The privately traded firm narrowed its net losses to GBP3m, from GBP7.5m in 2008. Operating losses fell to GBP2.5m from GBP7.9m.

Failure to achieve a profit was due to to ongoing investment in subsidiaries in mainland Europe, said the group, which includes the This Water brand and international business of Innocent Drinks.

In the UK, Innocent Drinks saw its profits almost halved during the year, to GBP5.7m from GBP10.9m in 2008. Sales also slipped to GBP96.5m from GBP98.9m.

“Competitive risks have continued to increase with the introduction of new competitors and supermarket own brand smoothies and the increase of promotional activity and discounts in the market,” Fresh Trading said in accounts filed with Companies House.

Smoothie sales in the UK fell by 27% in value and volume in 2009, in a market where Innocent constitutes around two thirds of the volume, according to the annual Britvic Soft Drinks Report.

Innocent's head of finance, Jess Coles, told just-drinks today (2 June) that the firm's smoothie sales were not struggling.

“There has obviously been a downturn in economic activities in the last two years and in particular 2008, where we did have a slight drop in sales in that year and our accounts reflect that. But since mid or late 2008 we’ve had increasing sales, obviously from a lower base, but smoothies sales have been going really well,” said Coles.

He said that sales growth has been driven by European markets, where Fresh Trading has grown its market share.

“We’ve moved from somewhere in the 10% market share region at the beginning of 2009 up to about 20% in Europe and while the smoothies market has shrunk in that time, we are taking a larger share directly from our competitors, which demonstrates the strength of our products and our brand,” Coles said.

Of the UK market, he added: “Our market share over the last two years within the UK has increased not decreased and I guess the own brand smoothies are our main competitors now in the UK market, but again we have increased our market share and it shows what good value our products are.”