Juice the thing!
Presently Ireland’s leading juice and smoothie brand, Innocent has always prided itself on its ethical stance. Gillian Hamill speaks to Dan Germain, head of brand and creative, to hear how the company dealt with a backlash from some fans after its first investment from Coca-Cola over five years ago, and how it’s planning to continue an ongoing expansion drive across Europe and beyond
17 June 2015 | 0
“A social company before the advent of social media,” is how Innocent, the juice and smoothie brand, describes itself. Dan Germain, head of brand and creative, recently visited Dublin on the company’s 16th anniversary on 28 April and explained the philosophy behind this description. “People have forgotten what the definition of social is,” says Germain. “It’s talking to people and being out there. At the very beginning, we held our own music festivals, we went driving around in stupid vans covered in astro-turf, just trying to interact with people, start a conversation.” Realising its comical bottle labels were a hit with consumers, Germain turned them into a weekly e-zine. “I figured that was us being social,” he says. “Then when Facebook and Twitter came along, we were in such a great position because we were already used to speaking to people in a human, natural way.”
Germain believes this less traditional attitude helped the start-up brand, over an “older business” which would maybe have a “very fixed way of doing its marketing and communication”. By contrast, a spontaneous approach to trying out new ideas on social media has clearly worked for Innocent. It’s currently Ireland’s leading brand, with a 33% market share in the chilled juice, juice drink and smoothie market, valued at €55.1 million overall*.
Friends with the brand’s three founders at Cambridge University, Germain is proud of how far Innocent has come. Reflecting on its progress, he says: “I guess there was a series of little steps rather than one day we thought ‘Oh, we’ve done it!’. There was a chain of coffee bars in London called Coffee Republic and I remember getting our drinks stocked there was really amazing because they had eight stores so we were like ‘Oh my god, we’re going to be in a chain rather than just this sandwich shop and this deli’. [Then in] the year 2001 we were stocked in Waitrose and that was amazing because suddenly we were in a supermarket and I could phone my mum and say ‘We’re in a supermarket!’ And then actually launching in Ireland [was a major milestone]. That was in 2002 and I could name 20 things since then…but you still get excited about all those steps rather than thinking there was one moment that changed everything.”
The company’s ambition isn’t faltering. Far from it; Innocent is in expansion mode. The brand has grown its mainland European business to more than an €100m retail sales value (RSV) in 2014. Particular highlights are its German and French businesses, with Germany currently in 100% year-or-year growth, having just recorded its biggest ever month, with sales at €5m – making it the number one juice brand for the first time. Meanwhile in France, sales are up 70% year-on-year, with juice up 180%. What’s more, the brand is launching into new countries. Sweden was the most recent launch in September 2014 and Innocent is already the number two smoothie brand there*. Germain calculates that “including the very small ones like Liechtenstein, Andorra and Monaco”, Innocent is currently available in some 17 countries. As well as its core Western European heartland, he adds: “We’re also in Russia, some parts of Hungary; sometimes we appear in countries without us knowing it now because we might have a distribution centre in Austria but then some entrepreneurial chap there will be selling the drinks into Hungary or somewhere else. I remember getting photos from somebody who was in Dubai with our drinks there but I never quite figured out how they got there.”
When Coca-Cola first invested in the business in 2009, the brand faced a backlash from some fans who felt the Innocent ethos would be diluted. Maintaining an “honest and open” stance was critical during this period, especially as since 2013, Coca-Cola has held over a 90% stake in the company. According to Germain: “I think the only way to have responded was that we were always really honest and open about what we did and how Coke did the investment and we told people exactly how we were going to behave, which was the same. We’re not going to change. Coke has no interest in running our business so we run it ourselves, that’s the reason they invested so they were getting the whole package; they get the people, they get the products, they get the way that we do things and it’s not the Coke way. They have a way of running their business which is great and that’s what they’re going to do and we have our own way of running our business and that’s how we do it.”
Germain believes the evidence speaks for itself on this point. “I understand that people, on the outside, they thought ‘Oh, those guys are going to change’, or they might have been nervous for us. The original part of the Coke deal was done over five years ago and so I always say look at the evidence. The evidence is we’re still making great drinks, we’re making more great drinks I think in an even better way, in more places, with smarter people working at our place than ever. So for me it’s worked massively because our dreams are coming true. We could have chosen to not do that deal, to stay a certain size and all I can think is, that’s not showing ambition and also that wouldn’t have got our drinks to as many people as possible which is what I want and which is why you start a business to get [your product] out there.”
Germain is obviously excited about Innocent’s potential for further geographical expansion. “First, we’re very close to becoming the biggest chilled juice brand in Europe and if that isn’t already true then it will be very soon, so that will be a nice milestone,” he says. “Personally speaking, I’m really interested in where Innocent will go geographically. What happens outside Europe, do you launch in the USA, do you launch in Asia, South America; what’s the plan? We’ve got a few ideas about how that could work.” He’s likewise adamant that Innocent will remain an ethical company, and wants to “prove people wrong” who think dollar signs are all that big companies care about. “We started Innocent because we want to make a great product but we also want to give something back. That’s why we give away 10% of our profit to charity. That’s why we run campaigns like the Big Knit, campaigns like Sow and Grow in Ireland, to give money and resources back to people who need them.”
On the topic of profits, ShelfLife asks how Innocent gets the balance right between providing a high fruit content in drinks and maintaining its margins. “If I’m being really honest, we created a rod for our own back by starting a business where our main ingredient was fruit,” says Germain. “Fruit is expensive, fruit and veg are expensive; if we’d started a bottled water business then the margins would be amazing. If we’d started a coffee business, the margins would be amazing, but we have a commitment to make healthy stuff so we have to use healthy ingredients and they cost quite a lot of money…I guess the fortunate position we’ve got to is that we are bigger and therefore we can at least negotiate a fair price for ingredients and hopefully make some money. But there are some products in our portfolio where we make very little money because we’re so committed to having the best ingredients in there and you kind of hope that elsewhere that balances out across the range.”
In terms of new product development (NPD), Germain says: “In the last two or three years, we’ve released more new products than we’ve ever done, including coconut water, Bubbles [sparkling fruit juice drinks], the fruit and veg cold-pressed juices, the super smoothies. I can’t tell you what the new ones are, suffice to say, as well as the innovation that’s come out this year, you’ll probably see two new ranges next year and a bunch of innovation within smoothies and juices as well; new recipes, new ideas.”
Coconut water is “a natural progression” for Innocent, according to Germain, who says the brand wants to be the best, but not necessarily the first to launch in any particular market. While he concedes that the coconut water market has been growing for the past two to three years, he says: “I personally think that most of the stuff out there tastes a bit ropey [and] I wasn’t prepared to have us launch anything until we found one that tastes really good. In the end, we’ve worked with some people in Thailand to make a product and the proof is only ever in the tasting but I think when people taste it, they’ll realise that it tastes noticeably different from the closest competition. That’s the simplest way of figuring out whether it’s going to work or not.”
*(Source: Nielsen MAT 22 March 2015)
**(Source: Nielsen, four week, value share)