The Homa Files

Excerpted from WSJ, “Coke Teams Up with Socially Focused Smoothie” By Aaron Patrick and Valerie Bauerlein, Apr 8, 2009

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Coca-Cola’s investment in British smoothie maker Innocent not only connects the beverage giant to a fast-growing product but also to a company known for good social and environmental behavior.

Coke said this week it will take a minority stake in London-based Innocent, which has quickly become one of Britain’s top brands by marketing its healthy ingredients and social commitment. By giving 10% of its profits to charity and using recycled bottles, Innocent was one of the first consumer brands launched in Britain to develop a big following through ethical marketing.

The investment … speaks to Coke’s continued interest in expanding beyond soft drinks and in owning small stakes in innovative companies … Founded 10 years ago, [Innocent] now has 82% of the U.K. smoothie market …

Innocent cuts a quirky public figure. Some of its trucks are covered in fake grass and daisies. Those trucks are mounted on hydraulics that make them appear to dance, with drop-down windows for giving away samples … The deal’s structure should allow Innocent to keep its funky attitude rather than risk being assimilated into a vast corporate culture whose focus remains carbonated soft drinks. Coca-Cola won’t have any management control over Innocent, but Innocent will share its expertise with the Atlanta-based beverage company …

The Coca-Cola money will be used to expand Innocent’s operations in Europe, where only 25% of European supermarkets sell smoothies … The money will be used to pay for distribution, stocking fees, sales staff and advertising …

While Innocent has run TV- and newspaper-ad campaigns, it has also specialized in less-traditional advertising. One of its ad agencies, Albion, created a board game for schools promoting the health benefits of fruit and vegetables. Some 200,000 people turned up to a Innocent musical concert in London named Fruitstock in 2006 …

Innocent’s charitable giving is also interactive. Volunteers knitted more than 506,000 little hats for smoothie bottles last year, which were then sold, raising £250,000 in proceeds to provide meals, blankets and other help for older people during the winter.

To be sure, Coke has been sporting its good deeds, expanding its recycling plants, reducing water consumption and using environmentally friendly coolants in vending machines and coolers … But the 123-year-old company has been known to kill ads that were deemed too edgy and is vastly bigger and more buttoned-up than a closely held newcomer such as Innocent.

Coke appears to be embracing the model of taking a stake rather than buying outright, after previously struggling to integrate niche nonsoda companies … Coke has had more success with its 2001 purchase of Odwalla Inc., a maker of premium refrigerated fruit and vegetable juices whose product line is closest to Innocent’s line.

Innocent’s success helped drive all smoothie sales in the U.K. From 2003 to 2007, smoothie sales in the U.K. rose more than fivefold to £241 million …

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Full Article:
http://online.wsj.com/article/SB123913675734598167.html

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This entry was posted on April 22, 2009 at 7:04 am and is filed under CSR - Cause Mktg, Mktg - Brands. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.