Innocent-Coke tie up raises eyebrows
07 April 2009
In a deal that has raised not a few eyebrows, British natural drinks maker Innocent, valued at £300 million, has sold a minority stake variously estimated between 10 and 20 per cent to US soft drinks major Coca-Cola, for £30-million. Innocent says Coca-Cola's investment will help finance its European expansion.
Coca-Cola's investment followa its arch rival PepsiCo's attempt to strengthen its own market share in the natural drinks segment in the UK, with its acquisition of natural drinks maker P J Smoothies four years ago and the launch of Tropicana its juice brand in competiting with Innocent..
Innocent, which takes pride in its ethics-driven approach to business, has come in for sharp criticism for tying up with Coca-Cola, which does not enjoy a reputation for social responsibility. The move has also sparked speculation about Coca Cola gaining the upper hand in the juice firm and increasingly calling the shots.
Meanwhile, the three founders of Innocent - Richard Reed, Adam Balon and Jon Wright - have sought to allay customers' fears in a statement affirming that they still continue to run and manage the company, saying, ''We will be the same people making the same products in the same way.''
According to Reed, everything Innocent is committed to including the focus on better quality, the use of more socially and environmentally conscious ingredients and support to charities would continue to drive the company. He added that the deal would help the company do more of the things it had been doing.
He said they chose Coca-Cola as an investor because the investment would provide funds and help the company get their products out to more people in more places.
The company was established in 1999 by the three friends who bought £500 worth of fruit, turned it into smoothies and sold it at a small "green" jazz music festival in London.
Innocent today has 275 people on its rolls and a turnover exceeding £100 million. It sells about two million smoothies a week. The brand presently has a presence in the Netherlands, Denmark, Germany and Austria.
James Quincey, group business unit president for Coca-Cola Europe, said they had long admired the company's brand, their products and their unique approach to business and were delighted to be investing in Innocent.