Coca-Cola's interest in Innocent splits opinion

marketingmagazine.co.uk 10-Mar-09, 09:25

LONDON - Reports that Coca-Cola is in talks with Innocent about acquiring a stake in the smoothies brand have drawn a mixed reaction from industry experts.

According to sources close to the deal, the investment could be worth about £30m and will enable the brand to expand internationally. It is widely thought to be a marriage of convenience.

Coca-Cola's existing juice brand, Minute Maid, has struggled to make serious headway in the UK, with sales down by 19% year on year in 2008, according to Nielsen, although the brand remains hugely popular in the US.

PepsiCo-owned Tropicana dominates the UK juice drinks market. Sales grew by nearly 17% last year following the launch of Tropicana Smoothies. By comparison, Innocent lost more than 20% in sales.

Brand consultant and former Innocent marketing director Gareth Helm argued that selling a share to Coca-Cola, rather than securing an injection of cash from another investment company, would help Innocent make up for lost time.

‘Innocent needs the resources to stretch the brand and gain momentum again,' he said. ‘It would be fantastic for Coke if it could get a stake in such an established brand in this sector.'

Melanie Skotadis, a consultant on Coca-Cola in her role as brand director of Added Value, said that any future tie-up should follow the example of previous such mergers between corporate and small-scale brands.

‘Ben & Jerry's has seen success under Unilever because consumers are none the wiser about the corporate ownership,' she added.

However, Jim Prior, managing director at branding agency The Partners, was critical of the proposed deal and claimed little consideration has been given to brand fit.

‘This is a business deal, rather than a brand deal, and has more to do with making money than the strategic fit of the brands. I would be surprised to see any immediate change to Innocent's marketing strategy,' he said.

Comments

TRACEY FOLLOWS - 10/03/2009

Can't believe you can use 'confusion marketing' as any kind of defense for an alliance \(any alliance, not necessarily this one). If Unilever do as proposed and apply the Unilever logo across all of their brands as a corporate sign off, then shouldn't Ben & Jerry's be included in this. And even if this weren't the case, we are moving to a model of corporate transparency in which brands,sub-brands and corporations' interconnectedness is made clear to all., so consumers being 'none the wiser' is a not a valid argument. Re the deal itself, i think it's a good fit. If Innocent want to grow, then they will have to get into bed with some corporate or another. if that's the case why not Coco Cola, which can unlock distribution and supply cash investment. After all Innocent distributed through Starbucks for long enough and did a deal with McDonalds. If the principles on which the brand was founded are protected, I think it makes sense.

Gareth Jones - 18/03/2009

Innocent do a great job of pretending it's not about the money where in actual fact it's only ever been about the money. In 2001 they refused to pay their original design company Deepend Design for their branding and design work because the digital design company faced liquidation, but then still used all their work. They've made false claims over the smoothies health benefits, they \(ironically) jet all around the world promoting their 'green causes' and back and forth to their ski chalets eating up CO2. Remember, their backgrounds are in marketing and PR, not farming and the environment. They are masters of the modern advertising chirade and Coke makes a perfect fit to expand on that. They deserve every penny so good luck to them, they have built a mega brand and managed it like a small one.