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

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

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PDF – 27 pages, with product illustrations, charts and tables

PPT – 106 slides with product illustrations, charts and tables

March 2010

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

About this report

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.

1. Executive Summary
2. Seven strategy lessons: economic downturn exposes flaws and strengths
1. Lesson 1: Talking to the wrong consumers
2. Lesson 2: No point of difference
3. Lesson 3: No benefit you can feel
4. Lesson 4: Aiming a niche product at the mass market
5. Lesson 5: No packaging innovation
6. Lesson 6: Failed to open new categories and segments
7. Lesson 7: Flawed international strategy
3. The Innocent story
1. 3.1 Rapid sales growth
  1. Success with smoothies
  2. Factors contributing to early success
2. 3.2 Brand positioning: naturally functional, fruit, fun, tasty and convenient
  1. Brand adds fibre-digestive health message
  2. Core brand messages focus on 5-a-day benefit
3. 3.3 Communications strategy
  1. Educating health professionals
4. 3.4 Packaging and distribution strategy
5. 3.5 Pricing strategy
  1. Premium pricing
  2. Price-slashing to protect brand
6. 3.6 Innovation
  1. Mixed performance on innovation
  2. A me-too product under-performs
  3. Orange juice another me-too
4. International expansion
1. 4.1 Hope from Coca-Cola partnership?
2. 4.2 Challenges of expansion
3. 4.3 Does premium-pricing translate to other countries?
5. Moving forward with kids
1. 5.1 Kids market focus in bid to revive flagging fortunes
2. 5.2 Successful kids brand sees sales slump
3. 5.3 Price-slashing to stop collapse