innocent drinks

INTRODUCTION

• Fruit Smoothies are a fruit based beverage (usually 100% crushed fruit and very little else).

• An excellent way of grabbing quick meal.• Due to rising levels of obesity in Europe,

consumers became health conscious • Multinational food and beverage companies try

to tap into changing consumer tastes by selling healthier products.

• Richard Reed, Adam Balon and Jon Wright left university and went into the obligatory milk-round professions.

• One idea they all liked and enjoyed was Fruit smoothies.

• At that time there were very few smoothies on the shelf.

• They spent £500 on fruit, turned it into smoothies and tested their drinks on visitors to the Jazz on the Green festival in London

The story

Reasons for entering the market

• It involved developing a new product for people like them.

• Demand for healthy lunch time drink to go with their sandwich.

• UK Government Health Department was promoting the benefits of eating more fruits and vegetables.

First entrant(s)• Harry Cragoe-founder of P&J Smoothies was the first

entrant into the UK in 1994

innocent• Importing a fresh product and transporting it 8000 miles

across the world - extremely difficult.• Not surprisingly the product was twice as expensive as

other drinks at the time.• Many experienced traders were doubtful such a product

could succeed in a highly competitive market

New Product Development

• Process of bringing a new product or service to the market.

• May be done to develop an item to compete with a particular product or may be done to improve an already established product.

• It may be a Consumable product, service or idea.

Process

New risks and uncertainties are introduced on the way.

Concept Testing

Determines Critical success factors Financial objectives Marketing mix strategies

Product, Pricing, Promotion, Placement Marketing plan initiatives

Activity, Budget, Timing

• Market was crowded so innocent drinks realized early that they had to stand out on the shelf.

• Careful consideration of design and packaging

• Relied on people being intrigue enough to try new product

Concept Testing

“Don’t you just want to know if people like them or not?”

keep it simple instead of long feedback“Do you think we should give up our jobs to make these

smoothies?’

Prototype Development

• They targeted young , urban office workers, affluent people

• They emphasized product differentiation strategy by maintaining purity and naturalness

• Creation of brand image is very crucial in FMCG markets. They carefully nurtured their brand based on fun , and an almost hippie approach to life.

Prototype development

TARGET MARKET Young , Urban ,Affluent ,Office workers ( just like the

founders themselves!)

100% PURITY AND NATURALNESS Innocent wanted to offer Pure Fruit Juice

BOTTLE DESIGN FOR THE “GRAB A SANDWICH” CROWD

ELEMENT OF FUN

Product comparison amongst peers

Innocent vs. PJ's smoothies

• Great brands have a great story - Pete & Johnny were fictional characters. Though the inspiration might have been Ben & Jerry's, the comparison is not really valid hence they shortened the name to PJ's in 2002.

• Consistency pays off - innocent have been incredibly consistent, adding layer after layer to their brand story. In contrast, PJ's have been through 2 design changes in this time.

• Wave after wave of innovation - innocent have never stopped innovating on their core business.

• Being bought by the big boys don't always help - innocent focused 100% on smoothies. PJ's(later acquired by Pepsi) is a small brand in a huge drinks portfolio, dwarfed by Tropicana

Factors influencing Innocent’s market share

• They raised the smoothie’s taste and healthiness above even the premium PJ smoothie by improving the freshness and quality of ingredients

• Created value for consumers by building its brand on “fun” and community involvement

• Amusing labels, displays and delivery vans, together with sponsorship of “Fruitstock” and the “Hats for Bottles” initiative (which donated to charity) serve to create a memorable brand that cares about its community

Is that all?

Positioning

• Most of their early sales were through local delicatessens and sandwich shops

• Innocent has not spent large sums of money on television, press or radio promotion.

• Healthy relationship with retailers through regular communication

o Newslettero INNOCENT’s birthday celebration o Christmas Presents

Launch and promotion

BRANDING

SIMPLE DESIGN

HIPPIE APPROACH TO LIFE

ELEMENT OF FUN

PRICE AND PACKAGE DESIGNThe smoothies, which appeal to consumers whom Innocent describe as "slightly more female, slightly more affluent, slightly younger," are priced at the high end of the fruit juice market, selling for £1.70 to £1.80 in "on the go" plastic bottles, and for £2.99 in larger take-home cartons. Innocent has also recently launched a childrens' range, retailing at 70p

How were they able to do it?

Promotions

• In fact it took 4 years for innocent to use private advertising.

• ADD MORE!

How did they innovate in the meanwhile?

REGULAR SAMPLINGconducted at Innocent’s test kitchen to ensure that only the most flavoursome varieties are used in the drinks

RECIPE TESTSRecipes created in the kitchen at their London offices are tested on people in surrounding office buildings

2007-Present date

Timeline

2007Product Recall• There were several reports of Innocent smoothies "exploding”.

Innocent recalled 100,000 bottles, stating that the explosions were caused by a natural fermentation of the ingredients

Advertising Claims• In October Innocent was warned by the Advertising Standards

Authority for making unsubstantiated claims about the health benefits of their "superfoods" smoothies stating that their claims could not be backed up by medical science and ordering Innocent to not repeat them

Recycled Plastic Bottles• Innocent became world’s first smoothie company to start making

bottles from 100% recycled plastic

2008Veg Pots

• Innocent kept investing in new products throughout

• Veg Pots were launched in 2008 and were a great success

• Growth became 200-300% after launch.• According to head of finance Jess Coles:

“There’s not much else out there that is directly comparable in the marketplace.”

Financial Condition

• The company was left with £1.3M in cash at year-end in 2007.

• This further reduced to £425,000 at the end of 2008.

• Innocent was undergoing European expansion in 2008 which failed to quickly deliver profits. In addition to this, Innocent faced a financial crisis and a slumping smoothie market. Sales fell sharply and the firm made an £8.6M operating loss in 2008.

2009• Innocent Drinks announced its decision

to sell a stake of 18% to Coca-Cola.

• The three founders retained operational control for £30 Million

• Innocent received a welcome cash boost

• At the end of year in 2009, Innocent had a very healthy £32M in the bank.

• UK Smoothie market share rose to 77.5%; Operating loss reduced to £6M 2007 2008 2010

72

69

77.5

% UK Smoothie Market Share% UK Smoothie Market Share

2009

• Innocent launched another new product

• Fruit Tubes for kids

• Turned out to be very successful

Growth Across Europe

• Stepped up efforts to expand in other European countries

• In 2009, own-label accounted for 23% of European smoothie sales volume Tropicana - 19% Chiquita - 16% Innocent - 14%

• In 2010, Innocent introduced take-home cartons at a lower price point accompanied with a clear marketing strategy

• Volume share doubled to 28%; Sales grew by 56% to 25M.

2010

• Innocent entered the Fruit Juice market with the introduction of Orange juice followed by Apple juice later

• Expanded to 9 flavors quickly

• Coca-Cola increased its stake in the company to 58% from 18% with further investment worth £75 Million

Present day

• Innocent has a presence in fifteen countries

• In February 2013 Coca-Cola increased their stake to over 90%, leaving the three founders with a small minority holding

Product Offerings

Innocent inspires

Thank You!