Innocent Drinks

Innocent

Case Analysis

2/21/2016

Robin Goswami

Student Id: 213651310

Email address: rgoswami14@schulich.yorku.ca

“ I Robin Goswami as registered at Schulich hereby certify that the attached assignment and all materials therein have been created by me unless otherwise footnoted and that all material contained herein including charts, graphs and other materials have been created by me”.

Introduction:

Started in 1998 by three partners Reed, John, and Adam, Innocent is a U.K based producer and distributor of pre-packaged premium beverages, containing no water or no added sugar, that include a range of products such as natural fruit drinks, smoothies, thickies, and fruit-enhanced water. The company sells primarily through 3 channels that are coffee and sandwich shops, convenience stores and gas station minimarts, and grocery stores. The founders started the company with an initial investment of £235,000 and the company is expected to hit £16 million in revenues by 2004. Remarkably in a short span, Innocent has managed to achieve 30% market share of £50 million U.K smoothie market, competing with PJ, who is U.K’s former market leader with 25% market share. The company has relied mostly on guerilla marketing for establishing its brand name. These marketing tactics included company’s delivery vans covered in designs of a cow, labels used on bottles with 800 different messages, Fruitstock- a free music festival etc

Issues at hand:

In order to move to U.S market or even expand to other European countries, Innocent has various pain points that need to be addressed.

The immediate issues that the company faces are product selection, selecting the right location with appropriate distribution strategy and fixing price points, which justify the value of the product with safe margins, and help to compete in the new markets. Though the new product categories that are ice-cream and yogurt seems promising, it is quite challenging to forecast the demand for these product categories. Innocent has centralized production and distribution in U.K that makes tough for the company to enter a huge market such as U.S that already has saturated distribution channels. Innocent is still an emerging player that does not have an established brand name in other European and American markets, besides U.K or Ireland.

Basic Issues: However, building Innocent’s brand name and developing a sustainable growth strategy are the two basic issues that would ensure Innocent’s long term standing. The company needs to create an overall