Features

Innocent

The enviously bright, healthy boys behind innocent have become somewhat of a British institution over the years. Although most of us associate them with pomegranates, beach hair and flip flops they’ve successfully been in business for over ten years. They left their jobs behind in 1998 with the aim of creating a healthy habit that would have a low cost but a high feel-good factor. “We wanted people to think of innocent drinks as their one healthy habit; like going to the gym, but without the communal shower afterwards,” says Richard Reed, co-founder and the more media friendly of the group.

Their latest capital investment from Coca Cola has caused minor controversy, with some stating they have side stepped from their ethical roots and others admiring their business intuition for moving ahead of the curve, but they insist its business as usual for the group. Their main focus is getting ‘the innocent products to as many people as possible’ to stay at the forefront of the industry. We went to the glorious fruit towers to find out where they are ten years on and what has kept them afloat.

Why did you specifically need more investment into innocent?
Well, we thought we are in the right market, it’s really starting to work, it’s growing rapidly, but there are loads of competitors piling in to the market and we are going to lose out on expansion opportunities unless we can get the money to roll. So that was the background to it. All of that became apparent over the course of last Summer, which of course was the worst time in the world to start fundraising for your business. In fact, the very day we kicked off was the day the Lehman Brothers went under. Ultimately, we raised money to make the most of the opportunity we had in Europe.

We are on sale in several countries on the continent, and there is a lot of demand for our healthy drinks, but we have been coming under increasing pressure from big brands such as Chiquita and Tropicana (owned by Pepsi) who have launched against us. Without the funds to invest in these markets, we would simply lose the fight, and it would leave us open to those brands to come after us in our home market of the UK. We want to move forward as a business and the funds raised will allow us to do so.

You are in a lot of ways very much an ethical company, how will you be advancing this and what exactly qualifies you as a green operation?
We want to be proud of every piece of fruit we use, so we prioritise buying our fruit from farms that look after both their workers and the environment. We favour farms certified by independent environmental and social organisations, and pay a premium for fruit from farms with the highest ethical accreditations, such as those from the Rainforest Alliance (all our bananas are Rainforest Alliance certified).

As some of the fruit varieties that we buy are not covered by existing certification schemes, we have our own set of minimum standards. They are extremely comprehensive, and cover all relevant areas from labour conditions to appropriate growing techniques to protection of biodiversity. Quite simply put, they are there to ensure a fair deal for the grower, the worker, the local environment and the country of origin. We ask our suppliers to work towards these when an existing scheme is not available.

You have now sold a portion of your company to Coca Cola who some have considered to be a controversial choice and according to a consumer on your AGM web seminar “at odds with your own ethics”. You have ultimately made a business decision which is something any entrepreneur can appreciate. Why was it the right choice?
We’re about our mission; the thing that we care about most is getting natural, healthy food to as many people and places as possible and to be a successful business. That is fundamentally our core, and raising money for our charity, the Innocent foundation. We are the same people, making the same products, in the same way. We looked at other options but we would have given up much more flexibility. We met many different types of investors and these were the guys we clicked with the most. They were smart, they were honest, they didn’t mess us around and we got to raise our game. They attached no strings; this is the bit that most people don’t believe, but honestly there were no strings with their investments. They are definitely not the company that some people think that they are. Neither are they perfect, nor would they say they are. My role is not to sit and defend Coca Cola though, ultimately we are a business and we made the right decision for us and our customers.

Our objective is to expand and distribute in a more concentrated way across all areas of Europe that have high demads for our product. I’ve been sat there with alternative investments, we had some good ones and believe me we had some bad ones too. There are several reasons why we chose them. One is we liked the people we met from Coke - they were smart and honest. Secondly, Coke was prepared to invest the money with no unpleasant conditions attached. We spoke to lots of other possible investors and it was amazing how many wanted to put conditions on their investment - one said they would invest the money, but we would have to stop our donations to charity. Another said we would have to let them have control of the business. Thirdly, Coke can help us with our mission to get our healthy drinks out to as many people as possible, by introducing us to customers in Europe and maybe helping us with distribution. And with the deal we remain a stand-alone business with Adam, Jon and Richard continuing to lead it in the same way as before. Overall, the deal brings security and opportunity to the business, and allows us to step up our mission of getting more healthy drinks out to more people. The reality was the European machine was not going to wait for us. We had to carry on.

You are quite dedicated to market research and customer feedback. Is the process working?
Yes it is, we need to know what people want, especially when you are dealing with the food and drink industry. We do it in so many different ways. The business lives or dies on whether these people are happy with what we are doing. But what we are really trying to do is keep nourishing the relationship between the brand and the people that support it. We call them innocent because our drinks are always completely pure, fresh and unadulterated. Anything you ever find in an innocent bottle will always be 100% natural and delicious, but if it isn’t we want people to get on the banana phone and make us beg for forgiveness! Being accountable to our customers is something that is in our blood. In the summer of 1998 when we had developed our first smoothie recipe, but were still nervous about giving up our proper jobs, we bought £500 worth of fruit, turned it into smoothies and sold them from a stall at a little music festival in London.

We put up a big sign saying ‘Do you think we should give up our jobs to make these smoothies?’ and put out a bin saying ‘YES’ and a bin saying ‘NO’ and asked people to put the empty bottle in the right bin. At the end of the weekend the ‘YES’ bin was full so we went in the next day and resigned. Then we had to find a home, that’s when we stumbled across the perfect place - fruit towers. It’s a lovely little place, somewhere that we can call our own and where everybody’s welcome, it’s right in the heart of Shepherds Bush.

What’s your most effective research method?
Well couple of things, there is a thing on the website at the moment that we put up a year or two ago, ‘rate and review’. Research engines like that are so incredibly useful. We had a handful of people who were vegans saying that they were really annoyed they couldn’t have a certain products of ours. We were like ‘hang on there’s only vegetables in this!’ We didn’t know you couldn’t eat honey if you’re a vegan you see and they spotted that. Two of our recipes had honey in them, so we were like ‘Christ!’. We literary did not know that, so we changed them, and now they are absolutely vegan friendly, so it’s invaluable to connect with your customers on a regular basis.

Adult-to-adult feedback is just massively powerful. We have a newsletter that you sign up for every week, we send that by e-mail and ask questions like ‘do you think we should do baby food?’. I think you’ve got to wise up to society. You’ve got to give and take, and get people engaging with your products. When people complain, I’m massively grateful because they are complaining about stuff they don’t like, and it gives me the opportunity to fix it for them.

How much does Coke now own?
Coke owns a minority investment of between 10% and 20%. The only reason we have not said the exact number is because we don’t want to make it too easy for our competitors to work out the value of the business. It is worth saying that all the money stays in the business to fund our growth, the money is not being paid out to shareholders.

Does this mean that some of the profits from innocent now go to Coke?
No. There are no plans to pay dividends to Coke. If the business makes money then the profit will stay in the business, with the exception of the 10% that is donated to charity each year.

Do you really think you are going to be able to influence their thinking?
Obviously we are not going to revolutionise their business, but they have already followed our lead on carbon measuring and they are keen to understand our 100% recycled plastic bottle, which is exciting. Plus, Cadburys have recently announced that they are going Fairtrade on their main Dairy Milk chocolate, something that would not have happened without their relationship with Green and Blacks, so sometimes the tail can wag the dog!

The AGM is a great idea. When do you hold them, does it pay off to be so open?
We do it once a year. I don’t know why they call it an AGM, we call it a grown-up meeting, but we love the idea of giving ourselves that confrontation and hearing what people want first hand.

They just pop round to the fruit towers, they can write it on the web too or just post a question or complaint. It is only a little thing, you know, less than a hundred people come to it. I left the AGM just so energised by it all.

There was this woman who was really quite upset about the Coca Cola matter. Well she said; ‘I am upset, I’ve argued with a lot of friends over this because they’ve stopped buying the products completely. I just wanted to come in here and see what you had to say’. So we thought ‘my god that is so brilliant that you were actually prepared to show up and make the journey to find out what’s actually going on with us and give us a chance to explain.’ She actually went away quite relieved which was good for us and her. These opportunities simply help us do our job.

What do you see for Innocent in ten years time? Will you gradually all let go and sell up?
We are all committed to each other and although I can’t see into the future 15 years from now, we love working with each other.

I work with an incredible group of people, innocent is such an organic venture to us and it’s been a long and challenging journey that we have very much enjoyed. I can’t see us letting go anytime soon.

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