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Two years after being sold to Coke, has this company kept its innocence?

We talk to Innocent Drinks about competition, cults and getting into bed with a multinational.

Innocent’s definitely not perfect – it’s not this perfect business where everyone wears white robes and is at peace with the world.”

5291158276_33ea97bced_z Source: Charlotte Marillet

FOR A COMPANY big on the warm and fuzzy factor, from its promises to deliver sustainably-sourced products to its charitable works, Innocent Drinks’ decision to get into bed with Coke appeared like a textbook deal with the devil.

Fast forward two years since the drinks giant completed its buyout after earlier taking a majority share in the juice and smoothie maker, things appear to be going well – on the sales front, at least.

Innocent’s expansion from its native UK to mainland Europe has continued apace with it forecasting revenues to grow 20% this year to £250 million (€338 million) as it spreads its reach into products like food pots, fizzy drinks and, most-recently coconut water.

It is also the leader in Ireland’s €55 million juice and smoothie market, based on figures from AC Nielson, while the company said it just became the top-selling brand in Germany after doubling sales over the past year.

But has coming under the sweaty hand of a multinational parent brought with it pressure to drive down costs and maximise profitability for a company that famously started with some friends selling smoothies at a music festival?

Not according to Innocent’s head of brand and creative, Dan Germain, who has been with the company since it started 16 years ago this week.

Screen Shot 2015-05-02 at 3.49.25 pm Innocent head of brand and creative Dan Germain

“The relationship with Coke is one that is … certainly an odd one because they invested in us so they could leave us alone,” he said in an interview at TheJournal.ie’s office.

They let us run the business in exactly the way that we want to run it. Their stance is we don’t know how to run your business, we can’t run your business.”

The takeover

Coca-Coca completed its takeover in 2013 as part of a deal that reportedly valued Innocent at £320 million (€448 million in today’s money) after first taking a majority share in 2010.

However Germain said there had been “zero pressure” from anyone at Coke to change Innocent’s model, despite him admitting the company ran in a “highly illogical way”.

“As long as we’re growing and we’re successful I think that’ll be the case,” he said.

If we started to absolutely tank and there was a day next week when everyone in the world stopped buying Innocent drinks then Coke would probably say hang on, what happened there?”

Those illogical business decisions included giving 10% of its profits to charity – mostly to the Innocent Foundation, which has spent nearly £3 million (€4.5 million) to date on projects to eradicate hunger.

screen-shot-2015-05-02-at-3-52-55-pm Source: Innocent.ie

All about the fruit

Another, Germain said, was making products for which the price of the core component, fruit, was “really expensive” and fluctuated wildly.

But he said customers would notice and abandon the brand if it tried to cut corners, and in a market filled with juice and smoothie makers they couldn’t compromise on taste.

“In the end that has to be our USP (unique selling point) – that we get to the best stuff before the other guys do,” he said.

If we know that there’s an area of Brazil that grows the best oranges then we go there and we almost buy them all – or we buy as many as we can. That ensures you with a great supply of oranges for the next however many months or years and it stops other people from having them.”

2449104104_c051638853_z Source: Simon Doggett

And that desire to squeeze out (pardon the juice-related pun) the competition also demonstrates the company’s ambition, despite a cuddly image fostered with campaigns like the Big Knit, as it looks to expand well outside Europe to North America, Asia and Australia in coming years.

Innocent’s definitely not perfect, it’s not this perfect business where everyone wears white robes and is at peace with the world – we’re a normal business and a collection of normal, smart people … I would hate for it to sound like a cult or something,” Germain said.

Here’s an extended interview in which Germain talks more about Coke, trying to keep ahead of the competition and not being a cult:

Source: Video TheJournal.ie/YouTube

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About the author:

Peter Bodkin  / Editor, Fora

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