Coca-Cola has taken a minority stakeholding in Innocent Drinks, the smoothie and veg pots brand, for £30m, The Grocer can reveal.
Innocent declined to provide exact details of the size of the stake but said it was between 10% and 20% - valuing the business at £150-£300m - and would provide the Shepherd's Bush-based business with money to fund international expansion. The cash will also be used to support its investment in a lower average price in the UK and additional above-the-line advertising.
Co-founder Richard Reed stressed that Innocent would remain a standalone business and would be true to its values, despite its close association with the multinational.
"We’re excited by this minority investment as it enables us to do more of what we are here to do - get natural, healthy products to as many people as possible," he said.
"The founders will continue to lead and run the company - we will be the same people, in the same offices, making the same products in the same way. Every promise that Innocent has made - about making only natural healthy products; pioneering the use of better, socially and environmentally aware ingredients packaging and production techniques; donating money to charity; and having a point of view on the world - will remain. We’ll just get to do them even more."
As well as international expansion, the money was being used to invest in price, Reed added: "We're 24ppl cheaper than we were a year ago and we are doubling above-the-line spend. With 82% market share, we are going to support this category to get it back in growth and have already seen the fruits of this labour in March 2009, with like-for-like sales up on March 2008."
The choice of Coca-Cola as a partner will be a contentious one, as its positioning is poles apart from Innocent: a giant multinational, Coca-Cola is American, corporate, mainstream, and also has attracted controversy over its human rights record.
Reed defended the choice, saying: "It's like having an older brother in the playground. We can ring them for help from time to time. We chose Coca-Cola as an investor because, as well as providing the funds which will allow us to increase our investment in the brand both in the UK and internationally, they can help us get our products out to more people in more places. They have been in business for over 120 years, so there will be things we can learn from them. And in some small ways, we may be able to influence their thinking too."
James Quincey, group business unit president for Coca-Cola Europe, added: "We are delighted to have the opportunity to invest in innocent’s future. We have long admired their brand, their products and their unique approach to business. Our investment will support innocent in helping more consumers enjoy their products and for the business to expand across Europe."
For Innocent, Reed added that while there are challenges, the opportunities in Europe, where it is sold in 13 countries and is market leader in five of them, outweighed them. But Reed also insists there is opportunity to grow the UK business. As well the Veg Pots side "going much better than anticipated", Innocent is stepping up its innovation pipeline in smoothies. And the Department of Health has just ratified that smoothies can now be classified as having two portions of fruit following a change in the rules.
"We want to promote the two portions message and our value through a doubling of above the line spend, starting with a test campaign on air in Granada in the next month," he said.