LAUNCHING INNOCENT INTO THE GROWING FRUIT SMOOTIE MARKET

Since lauching the business in 1999, Innocent has not only witnessed the rise of its own
business, but also the growth of smoothie business and the rise of competitors. Whilst
being the market leader with a UK market share of 80 percent, it can expect fierce
competition from PepsiCo as it attempts to be the dominant smoothie brand in Europe.
Smoothies are fruit-based beverage (usually 100 percent crushed fruit and very little
else). They are nutritious and versatile, and are an excellent way of grabbing a quick
meal. In the America, smoothies have been popular for health-conscious people for many
years. They are, generally, low in fat and calories and make an excellent drink and/or
snack, especially at lunchtime.
As people worry about levels of obesity in Europe, they pay more attention to what they
eat and drink. International F&B companies are succesfully tapping into changing
consumer tastes by selling healthier product without having to conduct detailed
marketing and market research. The growth of this type of business solely relies on
WOM. Consumers taste the products and told their friends. It is noticeable that brands try
to get away from bad labelling, deciding instead to use just pictures of apples and oranges
since they are fun, relevant and interesting with the packaging.
Innocent is now a brand leader in the UK smoothie market, generating revenue of £80
million annually. It is the fastest growing food and drinks company in the country. From
only 03 recipes of smoothies at the beginning, now it offers 20 different drinks to their
customers. Through constant innovation and refusal to compromise, innocent continues
to make an unrivalled range of total natural fruit drinks that taste good and have health
benefits. But the road to success was far from the simple.
In the beverage market, with the existence of giant corporations like Coca Cola and
Pepsi, the range of beverages is vast, from bottled water to carbonated drinks in all
flavors. The fruit smoothie product being lauched is perisable, with a very short shelf life
and, with the price tag at £2.00 or below. This actually is 2-3 times higher than that of
other beverages on the shelf. Achieving success is not easy.
The beginning of Innocent was the result of a friendship among 03 gentlemen who
always dreamed of a business idea that could sell. One of the ideas they all liked and
enjoyed was fruit smoothies. They all enjoyed having smoothie for lunch and all had
enjoyed making them at home with fresh soft fruit and a blender. They continued trying
out recipes on friends and developing their business plan. Then, they decided to spend
£500 on fruit, and turned it into smoothies and tested their drinks on visitors to the Jazz
on the Green fastival in London. They put up a big sign saying, “do you think we should
give up our jobs to make these smoothies?” and put out a bin saying Yes and a bin saying
No and asked people to put the empty bottle in the right bin. At the end, the Yes bin was
full. Even the idea was great, these men need to raise money. Options were not easy to
choose from. There were only 02 choices: debt and equity. With debt, they worried about
the interest rate that they would have to pay the bank. With equity, they had to give up a
portion of their ownership. The first option is quick and easy. But the second option
could bring collaboration and experiences of equity investors into the business. The third
option could be collaborating with a venture capital company. However, this type of
company only invests in a business that can grow very big in the future.
Idea screening
The 03 founders decided to develop a product for people like them: young urban
professions who wanted a healthy lunchtime drink to go with their sandwich. However,
this idea was not very new. The challenge for these men was how to become more
successful than existing players. To do this, they tried to make their product different
through clever and different forms of promotions. They had to brainstorm many ideas,
screened out those that will not work, and keep those that seemed to bring success.
Concept testing
Innocent had already proved to themselves with their unusual bin testing activity.
However, start a business from nothing is daunting. There should be no toleration for
mistakes. Innocent founder realized that the product had to stand out on the shelf.
Packaging, hence, is a critical issue. Design is the key. They would need customers who
can be intrigued enough to try a very unknown product.
Prototype
The 03 founders realized they would enjoy a product that emphasizes on the purity and
naturalness from fresh fruit. This is something that most of fruit drinks in the market
cannot offer. They decided to provide only pure juice. They also wanted a bottle that
would sit easily in the hand for the ‘grab-a-sandwich’ crowd and they wanted an element
of fun.
The design company was hired to complete the design job. The logo which resembles an
apple with a halo, or a person with a halo, depending on how you look at it, was sketched
on a serviette in felt-tip pen. The brand image was developed and carefully nurtured by
Innocent and was based on fun and hippie approach to life. This is reflected in the
packaging, promotion and logo used.
The material and production costs were relatively high that made Innocent 3-4 times
more expensive than other lunchtime beverage alternatives.
Market testing
Innocent ensured that only most flavorsome varieties are used in the drinks. Recipes
created in the kitchen at their London offices are tested on people in surrounding office
buildings. Once approved, the drinks will be manufactured by one of four independent
factories in the UK and sold in outlets across UK and Europe.
The smoothies which appeal to consumers whom Innocents describes as ‘slightly more
female, slightly more affluent, slightly younger’, are priced at £1.79 to £1.99 in ‘on the
go’ plastic bottles. Larger-size bottles for take-home and smaller ones for children are
also available.
Launch and promotion
Having developed their idea, founders found a lot of operational difficulties that mean the
launch took longer than expected. People worry about short shelf life, doubt about
whether or not include preservatives or addictives to lengthen its life.
To convince people, Innnocent carefully control the quality production and use the latest
packaging technology to have its longest possible shelf life.
Innocent’s first foray into the market was modest. Out to Lunch, the local sandwich shop
around the corner from their office in Ladbroke Grove, agreed to stock a few of their
drinks. They supplied only 20 bottles at first, but quickly had sold out. Indeed, most of
their early sales were through local sandwich shops, but it was not long before Coffee
Republik agreed to stock Innocent drinks in their nine shops.
Innocent put much emphasis on packaging design and retailers who stock their products.
Advertising copy tends to be witty and straightforward as does other communications
material. The relationship with retailers has been built up through retailer
communication, including a newsletter, which combines product information and fun
stories. Each communication is intended to reinforce the unique brand image innocent
has built for itself. The copy on the labelling is intended to break down barriers between
manufacturer and customer, using humor.
Future growth
Innocent was using a careful approach when considering whether to collaborate with
giant retailers such as Tesco or Sainsbury’s. At the beginning, Innocent would only
supply only a few of the multiples and, as sales grew and revenue came in, the production
would be increased.
Recently, global recession has caused a concern. During a recession, people try to cut
their costs. The premium fruit smoothies suffer. The UK market has dropped by 30%.
The future of Innocent is in doubt.