Innocent hit by dramatic sales slide

LONDON - Innocent Drinks has suffered a significant drop in sales as the UK smoothies market enters its first period of decline.

The brand, which has a 69% market share, suffered a 21% slump in like-for-like value sales of its smoothies to £27.3m in the 24 weeks to 7 September, according to TNS.

The decline can be attributed to consumers switching to cheaper options such as chilled juices, and an increase in the cost of raw materials fuelling price hikes during the economic slowdown.

The smoothies market achieved rapid growth after the launch of Innocent in 1999. In 2006, its value doubled to £163m, with Innocent posting a sales rise of 140% to a value of £96m, according to Nielsen.

Last year, Innocent recorded a sales increase of 46% to £141m. The total smoothies market was worth £214m, accounting for a 4% share of the entire soft-drinks market.

Innocent Drinks

Sales of the brand have almost halved from £6.3m in the 4 weeks to 15 June to £3.4m in the 4 weeks to 7 September, according to TNS. It is also losing market share, down from 72% last year to 69% at 12 July, according to IRI infoscan.

Last month, Innocent expanded into food with the launch of Innocent Veg Pots, a range of four microwaveable meals containing three portions of vegetables to count towards the five-a-day total.

The new range comes in several flavours including Tuscan bean stew and Thai coconut curry, and has been developed by the chefs at Michelin-starred restaurant The Fat Duck. The meals are low in salt and fat, and are available in Waitrose stores for £3.49. A complete launch will follow next month at major grocery stores across the UK.

It also recently launched Innocent Orange Juice to rival Tropicana which is made from both freshly squeezed and not-from-concentrate juice and available with or without bits.The company is expecting the brand to achieve £10m in sales in its first year

Earlier this month, Innocent aborted its latest search for an agency to handle its £4m advertising account, the third time in just 15 months that it has done so. After making the shortlist Fallon, 4Creative, Rainey Kelly Campbell Roalfe/Y&R and The Brooklyn Brothers were told Innocent would handle its advertising in-house.

PJ Smoothies

Like-for-like sales of PJ Smoothies have plunged 70% from £1.3m to £396,000 in the 24 weeks to 7 September, according to TNS. Sales have more than halved from £1.1m in the 4 weeks to 20 April to 47,000 for the 4 weeks to 7 September.

The brand has been decline for the past two years despite the promise of investment after it was acquired by PepsiCo in 2005. In the year to 8 September 2007, its market share dropped from 19% to 13%, according to IRI Infoscan. In response PepsiCo this year repositioned the range as a more mainstream brand by cutting prices by 30% and reducing the size of the range by half.

PJ Smoothies, which has eight flavours, was the first brand to launch in the UK smoothie market in 1994 The brand, then known as Pete & Johnny's, adopted brand styling similar to Ben & Jerry's retro look.

The brand was subsequently renamed PJ Smoothies and relaunched following its acquisition by PepsiCo in 2005 for a reported £20m. However, its overhauled look did not strike a chord with consumers.

The range was redesigned again last year in an attempt to move closer to the brand's original design simplicity. However, the revamp received little advertising support and failed to boost sales.

Tropicana Smoothie

Sales of Tropicana Smoothie, which PepsiCo launched in February to rival Innocent's leadership, have dropped 50% from £2.4m for the 4 weeks to 20 April to £1.2m for the 4 weeks to 7 September.

The brand is available in strawberry & banana, mango, passionfruit & pineapple, blackberry & blueberry, raspberry & pomegranate and apple, pear & cranberry flavours. It is packaged in one-litre cartons for supermarkets and 250ml bottles for the impulse sector, priced at £2.99 and £1.79 respectively.

The launch was supported by a £4.5m marketing campaign encompassing TV advertising, sampling, direct mail and PR. The move is part of plans to double the size of the Tropicana brand within the next three years.

Boosted Smoothies

Boosted Smoothies was discontinued in August just four months after it was launched to take on Innocent. The brand, a joint venture with Australian company Boost Juice Bars, had struggled to get supermarket listings. It is believed that the range has suffered because it is only available in 250ml impulse bottles and the larger 750ml take-home size.

Boosted Smoothies was launched at the end of April this year with a £5m marketing budget. It was the first new product development to come out of Nestlé's new business division, which was set up last year to drive the company's health and wellness credentials.

It has four flavours: mango with guarana and ginseng; a berry dairy-free probiotic variant with Vitamin C; a strawberry flavour, also with ginseng and guarana, which claims to aid memory and concentration; and a tropical variant with green-tea extract.

Own-label

Last year, Tesco created a smoothie line to attempt to capitalise on the success achieved by Innocent. The range comprises raspberry and blueberry, orange, mango and pineapple, and apple and blackcurrant flavour variants.

Asda has knocked the VAT off the price of all the 100% juices and smoothies it stocks as part of an ongoing campaign to persuade the Government to cut VAT on 'healthy' drinks.

Asda's own-label one-litre bottle of smooth orange juice has been reduced from £1.33 to £1.13 and nnocent's one-litre bottle of strawberry and banana smoothie has been reduced to £2.47 from £2.90.

It hopes the price cut will challenge current UK tax law, which rules that consumers pay no VAT on 'essential' foods and drinks such as milkshakes, frozen pizzas and chips, but must fork out 17.5% on 'luxury' items such as smoothies and 100% fruit juices.

The offer will be available in all Asda's 347 stores until 29 September and is being supported by a poster and press campaign.

 

 

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