innocent drinks case study

Making use of alternative marketing strategies

Reference Code: BPCS48

Publication Date: 08/04

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ABOUT DATAMONITOR
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BPCS48
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WHAT IS THIS REPORT ABOUT?

This report forms part of Datamonitor's case studies series, which explores business practices
across a variety of disciplines and business sectors. The series covers a range of markets
including food and drink, retail, banking and insurance, pharmaceuticals and software.
Each case study provides a concise evaluation of a company that stands out in some area of
its strategic operations, highlighting the ways in which the company has become one of the
best in its field or how it deals with different problems encountered within that sector.

Who is the target reader?

This case study is designed for industry executives, consultants, analysts and researchers,
providing them with a useful benchmarking tool and offering a blueprint for potential
improvements.
It provides valuable insight into the methods used by important industry players that give them
a competitive edge, allowing the reader to capitalize on the knowledge of experienced
companies when, for example, entering a new niche or market.

Report content
The report is divided into three main parts Introduction, Case Study and Conclusion
followed by Research Methodology and Related Research sections:

Introduction: provides historical background on the company and explains how the
company has responded to a particular business challenge.

Case study: provides the main body of text, detailing the company's approach to a
particular challenge; for example, superior customer relationship management, use of
technology, sales and marketing techniques, etc.

Conclusion: highlights the main findings of the report, summarizing the key
strategies the company has employed.

Research Methodology: details when research was carried out and the approach
used in writing the report.

Related Research: lists a number of reports on a similar theme to the case study,
which may assist the reader in further research.

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Table of Contents

TABLE OF CONTENTS

ABOUT DATAMONITOR

WHAT IS THIS REPORT ABOUT?

INTRODUCTION

Company background

CASE STUDY

Produces category leading drinks

Environmentally genuine

A brand built by innovation in distribution relationships

Sophisticated supply chain systems

Creative marketing

Press clipping analysis 2003: innocent drinks versus PJ

11

Development and training

12

Expansion plans

12

CONCLUSIONS

13

RESEARCH METHODOLOGY

14

RELATED RESEARCH

15

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Table of Contents

LIST OF FIGURES
Figure 1:

Innocent drinks packaging examples

Figure 2:

Customized innocent ice cream van covered in AstroTurf and daisies

10

Figure 3:

Press clipping analysis 2003: innocent drinks versus PJ

11

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Introduction

INTRODUCTION

Company background
Innocent drinks was set up by three friends, Adam Balon, Richard Reed and
Jonathan Wright, in 1999 as the UKs only range of natural, fresh smoothies and
other juices. After a hesitant start trying to find initial funding and a manufacturer
willing to take on their business, the company began to take off. In just four years,
innocent became the fastest growing food and drink company in the UK, with turnover
rising from 0 to 10.6 million.
The innocent high rate of sale combined with a premium price has meant it has built
strong relationships with its distribution outlets. It has consistently achieved more
press coverage than its major rival, PJ, since it began, with brand awareness
reaching 50% across the UK.
Innocent drinks is to be the focus of this case study because of its fast rise to
success. In 2003, after only four years in operation, the company became the number
one smoothie brand, achieving a 30% market share and having sales points in nearly
4,500 stores across the UK. It has a current annualized turnover of 15 million, all
from an initial investment of only 280,000.

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Case Study

CASE STUDY

Produces category leading drinks

Since its launch, innocent has constantly launched new flavors and formats to
maintain interest in the category and the brand. In 2003 alone it launched four new
recipes within existing ranges, a range of two super smoothies and three new recipes
of a totally new range called Juicy Waters. In the same time frame, its closest
competitor PJ launched one new product within an existing range and one new
range.
The company focus has not only been on new products. It is famous for evolving
existing products and responding to feedback from journalists, consumers and
retailers. For example, in 2003 it altered the recipe of the strawberries & banana
smoothie to incorporate strawberry seeds following feedback from evangelists who
wrote to or phoned innocent.

Figure 1:

Innocent drinks packaging examples

Source: innocent drinks

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DATAMONITOR

BPCS48
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Case Study

Environmentally genuine
In 2003, innocent became the first food company to develop and use 25% PCR (post
consumer recycled) plastic in its bottles. The company said it is working towards its
ultimate goal of using a 100% recycled bottle. Although its glass bottles aren't made
of recycled materials, innocent advocates that its consumers recycle its glass, as well
as plastic bottles, giving details of recycle schemes on its website. The company has
also signed up to renewable electricity to drive the business, from the energy supplier
Unit[e], and its company meeting room is made of recycled materials
Another environmental area which the company is involved in is sustainable
development in the third world. Innocent supports a non-governmental organization in
Andra Pradesh in India called Women for Sustainable Development. Their remit is to
provide support for the most rurally impoverished by giving them the resources to
become self-sufficient so they don't need to sell their labor to the fruit plantations.
This takes the form of planting cash crops and providing cows for families. The
company says its system is to link the amount of smoothies it sells to the amount of
acres of cash crops it plants, and the amount of yogurt thickies it sells to the amount
of cows it buys.
Innocent is evolving its commitment to charities in 2004 by establishing a registered
charity called the innocent foundation that will work with projects that help bring
nature and communities closer together.

A brand built by innovation in distribution relationships

With the aim of building one-to-one relationships with each retailer and to get to know
the individual outlets and offer them direct support, innocent has built a bespoke
retailer database to help manage the communication. This has meant that whilst the
company has strong wholesaler and supermarket relationships it has maintained its
appeal to the cornershops through which it originally grew the brand.
Every year since its launch, innocent has invited its retailers to a birthday party, and
in the summer of 2003 it went one step further and arranged a free music festival in
Regents Park, London and invited all its customers and consumers along to
celebrate. This was a first in the UK for the company and over 40,000 joined them for
free.

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Case Study

Such relationship building helped innocent to increase its number of distribution

outlets by 265% in 2003. This has been driven by securing major distribution
partnerships with flagship retail brands such as Sainsburys, Starbucks and Boots.

Sophisticated supply chain systems

From its creation in 1999, innocent acknowledged that it would have to innovate in
terms of distribution and sales if it were to overcome the challenges of dealing with
chilled, short shelf life products. It has overcome traditional issues surrounding these
sorts of products with two unique solutions:

It offers retailers an eight-day shelf life, which is a unique guarantee in the

chilled marketplace and has been a major reason for many retailers stocking
a product they would not normally consider

The company offers retailers a service where it forecast and orders on their
behalf on a daily basis. This gives innocent two advantages; it maximizes
product availability at wholesaler level and avoids wastage. As a result it is
able to offer retailers a zero wastage guarantee, which again is a unique
offering in the market.

Innocent runs a tight operations team that has meant it achieved a successful
delivery rate of 98% in 2003, which is exceptional within the chilled drinks market.

Creative marketing
In 2003 the brand changed from being one that had high awareness in London to
national brand status. It has achieved this by creating a brand that is driven by a
consistent attitude and by challenging norms in one to one communication:

Using the packaging as a media channel keeping 32 different types of label in

circulation and changing them every three months

Placing innovative sampling at the heart of its marketing through customizing

two ice cream vans covered in AstroTurf and daisies, which sampled to over
one million consumers in the UK in 2003

Innocent the publisher: launched its fourth book the Stay Healthy, Be
Lazy, available for sale in bookshops and on the Amazon website

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Case Study

Organized a festival called Fruitstock in Regents Park for over 40,000 people

Continue to use PR as a key tool for third party endorsement

Communicates directly with an average of 300 consumers each month who

call the banana phone, write/email or sometimes visit the headquarters - Fruit
Towers

Used a national advertising campaign in 10 key urban areas in summer 2004

- buses, metro, tube and print media

The success of Innocents innovative media push is reflected in the press clipping
analysis provided by Innocent across January to June 2003.
Figure 2:

Customized innocent ice cream van covered in AstroTurf and

daisies

Source: Cummfybanana.com

DATAMONITOR

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Case Study

Press clipping analysis 2003: innocent drinks versus PJ

The result of the above marketing, targeting and promotional strategies was a growth
in brand awareness by 47% in 2003. The figure below shows innocent achieved more
press coverage than PJ's over a six month period in 2003.
Press clipping analysis 2003: innocent drinks versus PJ

20

20

15

15

10

10

Average Score - Max 10

Number of Clippings

Figure 3:

0
Jan

Feb

Mar

Apr

May

Jun

Months

-5

Total Clippings Innocent

Total Clippings PJ's
Average Score Innocent
Average Score PJ's

Source: innocent drinks

-5

DATAMONITOR

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Case Study

Development and training

Innocent places great emphasis on training and development. There are three levels
of training at the company:

All of us these are the basic courses that everyone at Fruit Towers goes
on: time management, assertion training, negotiation skills

Knitting these are specific courses that everyone on the knitting circle
(everyone at management level) must go through: budget training, interview
skills, managing & coaching skills

Whatever it takes - these are job or need-specific courses and can include
absolutely anything from IT courses such as Dreamweaver, Excel and Sage
to driving lessons

Expansion plans
While innocent has successfully entered the UK market, it has the potential to expand
across continental Europe. The company has already started this process, launching
in France, Belgium and the Republic of Ireland in April 2004. The company currently
sells a small range of its products in these locations, with three variants on sale in the
French market: mango and passion fruit, strawberry and banana and honey and
vanilla yogurt.

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Conclusions

CONCLUSIONS
Innocent drinks has created a strong brand since its launch in 1999 by ensuring it has
understood the tastes of drinkers and constantly innovated in product development.
Its brand attitude has been built through its innovative packaging and clever use of
interaction with its customers, inviting calls to the company by phoning the innocent
banana phone or visiting its website.
The company's packaging is part of its appeal and has minimized the need for
advertising. Packaging varies across formats and flavors and presents the brand
through innocent stories. Instead of using advertising to build brand awareness, the
company has instead used strong marketing at point of sale. It has also focused on
event marketing to increase brand awareness, through Fruitstock, its annual music
festival held in London.
The innocent brand is built not just on a consumer focus on healthy drinks, but on a
set of strong, ethical values that appeal to a generation fed up with corporate brands.
People are willing to pay more for a product that uses quality ingredients and is
produced by a company with a social conscience.

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Research Methodology

RESEARCH METHODOLOGY
This case study was derived from Datamonitor's study of the young adult food and
drink market, which was carried out between June and August 2004. The hypotheses
presented in this report were supported by a series of interviews with industry
executives, in addition to secondary literature and in-house sources of information.

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Related Research

RELATED RESEARCH

Marketing Food and Drinks to Adults Volume 1: 20 35 year olds

This report reveals how young adult consumers have different stages in their
lifecycles and how their wants and needs reflect this.
Published: August 2004

Marketing Food and Drinks to Adults Volume 2: 36 55 year olds

This report reveals how older adult consumers have different stages in their lifecycles
when their wants and needs alter.
Published: August 2004

Kids and Health: Obesity issues and ethical food and drinks marketing
to children under 16 years old
This report examines the profit opportunities and threats that companies which
manufacture and market food and drinks products to children face over the next three
years.
Published: July 2004

Winning Brand Strategies in Food and Drink: Increasing dominance,

product appeal and market share
This report a new strategic management report analyzing the major trends and
developments of brands by product segment and country.
Published: April 2004

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