Three university students started Innocent in 1999. This was after a public vote at a festival that supported them to quit their jobs and to make smoothies instead. Waitrose then agreed to a trial in 10 stores (Smale, 2018). The trial was a success, leading to other UK supermarkets stocking their smoothies shortly after that.
Innocent’s strategy was to make smoothies from fresh fruit, not from concentrate, unlike its competitors (Featherstone, 2017). It became successful and was known for premium-priced goods, which were ethical and environmentally friendly. Coke now owns a 90% stake in Innocent as of 2013 (Neate, 2013).
Innocent currently distribute its goods in 14 European markets (Ronald, 2017). It also sources ingredients from a number of countries including Brazil, Italy and Spain (Innocent, 2018, p. 2).
Marketplace, environment and competition
Innocent’s target market tends to be made up of young higher income people who commute to work/school and are health conscious, but short on time. Another market segment are families, as well as environmentally concerned individuals.
Innocent operates in a highly competitive smoothie and juice market where it competes with Tropicana (owned by PepsiCo who entered the market in 2008), Coldpress, Happy Monkey Smoothies, as well as own brand smoothies such as Tesco’s. The UK market for juice, juice mixtures and smoothies amounts to £458m (Statista, 2019).
Innocent’s goods being premium priced means there is pressure to differentiate themselves from their competitors. It does this in a range of ways from being responsible for the sustainability of their business to doing charity work.
SWOT analysis grid for Innocent
Fig 1: SWOT analysis grid
STEEPLE
Customer considerations – Segmentation, targeting and positioning (STP) and buyer behaviour
Segmentation, first developed by Smith in 1957 (Brassington and Pettitt, 2012, p.131) is the act of separating groups of consumers in order to focus its marketing.
Innocent’s segmentation strategy has resulted in consumers being separated demographically. A proportion of Innocent’s consumers comprise of middle class, working young people, who are savvy and busy consumers with little time at lunch. In order to target this demographic, Innocent sold Veg pots until 2015. These were quick fixes containing three portions of veg in order to maintain a balanced diet.
Families with young children are also another segment; they want a balanced healthy lifestyle. Innocent sells kids multipack smoothies, which can be easily put into lunch boxes and also contain ample fruit and veg. In 2012 Innocent set to give away a free pack of plant seeds with every box of Kids smoothies (O’Reilly, 2012), positioning the product with a fun spin on and encouraging families to spend time outside.
Alternatively, the market has been separated into a psychographic segment where lifestyle is important and health matters. In 2014 Innocent created a winter campaign with the tagline “show winter who’s boss” which promoted three different types of smoothies that would tackle winter colds.
Behavioural segmentation can be shown as Innocent brands itself as ethical and environmentally friendly, targeting consumers who are concerned with socio-environmental issues. For example, 100% of Innocent’s cartons are made from Forest Stewardship Council (FSC) certified card. Meaning the paper used comes from forests that meet high environmental standards (Innocent, 2019).
Innocent has created a high quality, ethically sourced, healthy alternative to regular beverages found in the drinks market. Therefore stressing these qualities of the brand is vital in order to have a competitive advantage despite having a premium price on their products. In 2017 Innocent announced it was working on a new brand positioning for 2018 which would have a stronger stance on health and wellness in order to evolve their brand and turn health trends mainstream. This included adding protein smoothies and coconut water to its portfolio (Roderick, 2017).
Marketing Mix
BCG Growth share matrix for Innocent
Fig 2: BCG Growth share matrix
In the case of Innocent, the smoothies can be said to be the “stars” as they are characterised by high growth and make up a sizeable portion of the market. Innocent continually tries to innovate its smoothies such as its new super smoothies range in order to remain a market leader and keep up with changing consumer needs.
Kids smoothies could be considered to be “cash cows” due to habitual, low involvement buyer behaviour, i.e weekly food shops. As a result they have a large market share but are typically in a market which is mature and where growth has slowed.
“Question marks” include Innocent’s dairy free range and coconut water, due to being fairly new products on the market they do not have a large market share. Both markets are growing fast however with the dairy alternatives market predicted to grow at an annual rate of 11.7% globally (Neff, 2018) and the coconut water market growing at an average rate of more than 15% annually (Reuters, 2019).
Refreshers could be inferred as “dogs” due to a low market share and growth rate. There are only two flavours and a lack of advertisement for this product.
Product
Innocent has differentiated their products to appeal to various consumer markets such as having a dairy free range, fizzy drinks ‘bubbles’, kids smoothies and coconut water, but also expanding their range of flavours. In 2008 Innocent attempted to expand their product range, selling veg and noodle pots, but were discontinued in 2015. Innocent’s product depth has broadened with 6 different smoothie flavours and 8 different super smoothie flavours now. Kids drinks also now come in the form of smoothies, fruit and veg smoothies and kid’s juices. Appealing to families and the health conscious, Innocent promote their drinks stating they are “an easy, tasty way to help get your 5-a-day” (Innocent, 2019).
Packaging and branding
Innocent’s marketing strategy has been to be a business that is ethical, environmentally friendly and a socio-culturally aware company. The brand name “Innocent” paints a perfect picture for the product as they pride themselves in adding no extra sugar, not from concentrate and no artificial colourings into its smoothies. This is also brought out by their slogan: ‘Tastes good, does good’.
In order to become more socially responsible, Innocent has targeted the gender pay gap within the company. In 2018 their gender pay gap was 9.8% vs the national average of 17.9%. To tackle issues such as these they have created a ‘Future of Work’ project (Innocent, 2018).
Currently their smoothie bottles are made up of 50% recycled plastic and 15% plant plastic. By 2022 Innocent plans to make all of their bottles out of 100% renewable materials (Innocent, 2019) as well as working to reduce energy, water and waste along its supply chain (Innocent Sustainability).
The innocent foundation set up in 2004 pledged they would always give 10% of its profit to charity. In total £8.9m has been donated to their foundation. The foundation’s two main goals are to stop children dying from hunger and help the poorest families feed themselves (The innocent foundation, 2019). Innocent is likely to continue to grow as their ethics are more relevant in today’s world in comparison to 1999 (Leonie, 2017).
Price
Innocent’s products are premium priced, with smoothies costing around £1.79 per 250ml (72p/100ml). Subsequently Innocent is vulnerable to competition of mid-low price smoothies on the market. However, this price reflects the obdurate quality of the product and the cost of trying to be more ethical, therefore some consumers may not mind paying extra for it. Despite the possible increase in the future cost of imports and exports as a result of Brexit, Coca Cola is likely to be able to cover some of these extra costs from hedging currency fluctuations and its buying power, protecting the consumer from price hikes.
Promotion
Innocent has regular sales promotion at supermarkets such as Tescos “buy any 2 for £5.00”. In the past Innocent has ran advertisement campaigns, for example, the Innocent big knit in 2013 encouraged the public to send in knitted hats and with each smoothie sold 25p was donated to ageUK (Youtube, 2013). This was an attempt to prompt those who value charity to buy Innocent. Innocent also has a blog on their website created in 2006 as well as having a strong social media platform. This has created opportunities for conversations between Innocent and the consumer, strengthening attitudinal loyalty towards the brand and attracting attention.
Place
Innocent has an intensive distribution strategy and can now be found in all major supermarkets e.g. Tescos as well as coffee shops like Starbucks. This means it’s accessible for consumers to purchase during their weekly shops. Previously Innocent was the official smoothie and juice for the London 2012 Olympic and Paralympic games where smoothies were served to athletes and visitors in the Olympic Park (Innocent, 2012). This gave Innocent the positioning that the product was a healthy drink suitable for exercise.
Recommendations
Ansoff’s Growth matrix for Innocent
Fig 3: Ansoff’s growth matrix
Creating more flavours
Focusing on Innocent smoothies, the ‘stars’ should help to achieve greater market penetration with the current market. Exotic flavours are becoming more popular with the category growing by 17% from 2013 to 2015 (Talking Retail, 2015). This is an opportunity for Innocent to expand its product depth and increase sales with little risk. Furthermore different flavours could be sold according to different countries as consumer markets may prefer particular flavours more than others; research will be required to identify these preferences.
2. Sport fruit drinks
Innocent already has a health conscious consumer market, however, there is a lack of targeting sport fanatics. An opportunity for product development is a sports fruit drink containing isotonic carbohydrate-electrolytes elements found in sports brands such as Lucozade. This type of drink helps restore energy and enhance hydration to maintain performance.
Innocent has a solid basis for an introduction of a sport fruit drink as its target customers already are those who are health conscious and middle class, as well as having been being the official smoothie for the 2012 Olympics. In 2010 Innocent said “we tend to have more female consumers than male” (Innocent, 2010). New sports drinks are likely going to engage more of the male demographic; sport participation in England is 63% for men compared to 58% for women (Audickas, 2017). Furthermore 70% of those among higher social classes were active in sport.
3. Fermented/probiotic drinks.
Alternative smoothies containing fruit and yoghurt may be an effective way of promoting a range of probiotic drinks. With an increasing health conscious population, extending further into the health market is likely to strengthen Innocent’s brand. Tropicana already has a range of probiotic juice drinks launched in early 2017 (Abesamis, 2016) as well as Bio-tiful Smoothies sold by Waitrose. This shows that Innocent could gain extra market power through adding to its health and wellness product portfolio.
A fermented drink ‘Kombucha’ has become increasingly popular in recent years. It is made out of sugar, water, black/green tea and scoby (Lewin, 2019). Due to sugar being an ingredient, Innocent could replace the sugar with sugar naturally found in fruits and therefore Innocent would be able to avoid tarnishing its brand. However research is limited about the claimed health benefits of Kombucha (Lewin, 2019).
4. Expanding into other countries.
Now owned by global giant Coca-Cola, Innocent should take advantage of its distributive capabilities to expand internationally, such as in the US, Japan and China. Whilst different cultures may act as a barrier in the short term, Cocoa-Cola’s expertise of these markets could help position Innocents brand and alter its marketing strategy to fit the needs of these new markets.
5. Beauty products
Innocent could diversify its product range into beauty products. The ingredients that already go into Innocents smoothies and non dairy products could be used instead to make face masks made of 100% natural ingredients. These face masks could be positioned to capture ethical and appearance concerned consumers, appealing to young females ages 14-28. Lush, who is an important player in this market, shows there a large demand for these products. So this could be promising opportunity for product diversification.
27.4.2019