Innocent Drinks: seven strategy lessons from the setbacks of Europe’s biggest smoothie maker

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PDF – 27 pages, with product  illustrations, charts and tables	PDF & PPT each priced at: €200/$295/£190/C$295/A$345/NZ$395/¥23000
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ISBN: 978-1-906297-33-6	Publication date: March 2010
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About this report

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Innocent Drinks rocketed from start-up to over $200 million in retail sales within eight years, creating a brand new category in Europe – fruit smoothies – and enjoying premium prices.
But between 2007 and 2009 its sales plunged by 29% (Neilsen), and prices were slashed.

It’s easy to blame the economic downturn for Innocent’s recent sales decline, but during the downturn many other premium health brands actually grew their sales by 20%-30% even as Innocent’s fell.

This unique 27-page report sets out the seven strategy lessons that can be learnt from the experience of Innocent. These cover:

• Pricing
• Establishing and maintaining a point of difference
• Positioning and branding
• Communicating health benefits
• Packaging innovation
• Consumer targeting

Thanks to in-depth interviews with the company’s founders since 2002, New Nutrition Business has been in the unique position of tracking the rise of Innocent Drinks to its status as Europe’s biggest smoothie brand and the fourth-largest in the world. This report reveals how the company went from start-up to a celebrity brand and the reasons why its strategy meant that it hit trouble in the downturn, even as other health brands prospered.

Innocent’s packaging and distribution, marketing communications, brand positioning, pricing strategies and European brand expansion are all examined in detail.

Contents

1. Executive Summary

2. Seven strategy lessons: economic downturn exposes flaws and strengths
Lesson 1: Talking to the wrong consumers
Lesson 2: No point of difference
Lesson 3: No benefit you can feel
Lesson 4: Aiming a niche product at the mass market
Lesson 5: No packaging innovation
Lesson 6: Failed to open new categories and segments
Lesson 7: Flawed international strategy

3. The Innocent story
3.1 Rapid sales growth
        Success with smoothies
        Factors contributing to early success

3.2 Brand positioning: naturally functional, fruit, fun, tasty and convenient
        Brand adds fibre-digestive health message
         Core brand messages focus on 5-a-day benefit

3.3 Communications strategy
        Educating health professionals

3.4 Packaging and distribution strategy

3.5 Pricing strategy
         Premium pricing
         Price-slashing to protect brand

3.6 Innovation
         Mixed performance on innovation
         A me-too product under-performs
         Orange juice another me-too

4. International expansion
4.1 Hope from Coca-Cola partnership?
4.2 Challenges of expansion
4.3 Does premium-pricing translate to other countries?

5. Moving forward with kids
5.1 Kids market focus in bid to revive flagging fortunes
5.2 Successful kids brand sees sales slump
5.3 Price-slashing to stop collapse

About the author
Julian Mellentin is one of the world's few international specialists in the business of food, nutrition and health. Julian is the owner and editor of New Nutrition Business, the leading source of industry and market analysis, which has focused solely on researching and forecasting the nutrition business since 1995.

He is also co-author of:

• The Functional Foods Revolution: Healthy people, healthy profits?, the first-ever book on the business of functional foods, now translated into Japanese.
• With Peter Wennström, Commercialising Innovation: The Food & Health Marketing Handbook
• With Karl Crawford, Successful Superfruit Strategy.

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