Innocent Drinks

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CASE STUDIES

Innocent Drinks Case Study
Capitalizing on the health trend in the smoothie category
Reference Code: CSCM0309 Publication Date: April 2010

DATAMONITOR VIEW CATALYST
Innocent Drinks has achieved unparalleled success in the UK as the foremost player in the smoothies sector. This case study looks at the smoothies category in detail and assesses the company's achievements as it copes with recession, competition and takeovers.

SUMMARY
• The smoothies category in the UK has been growing strongly over the past decade, buoyed by the health trend and consumers' desire for easy and quick ways to attain their fruit and vegetable consumption goals. While the more mature juices category is still the larger of the two, smoothies have retained growth momentum through innovation and the continual introduction of new fruit varieties, overcoming the challenges created by the recession. • Innocent Drinks is the dominant player in the UK smoothie market, successfully defeating new competitors and the recession with its health positioning and quirky marketing techniques. Coca-Cola recently purchased a major stake in the company, but Innocent aims to keep critics of this move quiet by retaining management control and moving into new territories.

Innocent Drinks Case Study
© Datamonitor. This brief is a licensed product and is not to be photocopied

CSCM0309/Published 04/2010 Page 1

Innocent Drinks Case Study

ANALYSIS The UK market for juices and smoothies is buoyant, spurred on by the health trend The UK smoothie and juice sectors have been buoyant in recent years, as consumers have increasingly sought quick ways to enhance the nutritional quality of their diets. However, smoothies are still a relatively new category in the market, having gained momentum only in the past decade. As such, juices remain the larger sector.

The juices category is larger and more mature, but smoothies are forecast to see double-digit growth As shown in Table 1, the overall UK smoothies sector (including fruit-based and dairy-based smoothies) was worth £437.2m in 2009. The juices category was worth much more, at £4.2 billion in 2009. However, smoothies' sales growth is forecast to be strong in future, attaining a compound annual growth rate (CAGR) of 23.3% for the 2009–13 period. Although this is significantly lower than the CAGR of 51.1% it achieved for the 2003–09 period, it is still substantially more than that of the juice category, which is forecast to grow 9.3% in the 2009–13 period. This shows how the smoothies sector is still emerging, in contrast to the maturity of the juices sector.

Table 1:

Smoothies and juices market value in the UK, (£m), 2003–13

2003

2009

2013

CAGR 2003–09

CAGR 2009–13

Smoothies Fruit-based smoothies Dairy-based smoothies Overall smoothies category 34.7 1.9 36.7 423.0 14.2 437.2 983.6 28.1 1,011.7 51.7% 39.8% 51.1% 23.5% 18.6% 23.3%

Juices 100% fruit juice (not from concentrate) 100% fruit juice (from concentrate) Nectar (30–99% juice) Fruit drink (0–29% juice) Vegetable juice Overall juice category 799.0 1,058.9 283.1 186.3 7.8 2,335.2 3,026.9 515.8 427.0 255.8 10.6 4,236.1 4,826.0 504.4 407.4 291.5 11.4 6,040.7 24.9% -11.3% 7.1% 5.4% 5.3% 10.4% 12.4% 4.3% -5.7% 3.3% 1.8% 9.3%

Source: Datamonitor's Market Data Analytics

DATAMONITOR

Innocent Drinks Case Study
© Datamonitor. This brief is a licensed product and is not to be photocopied

CSCM0309/Published 04/2010 Page 2

Innocent Drinks Case Study

Juice launches continue to dwarf the more nascent smoothies category launches Despite the growing popularity of smoothies in the UK, there are still significantly more juices launched than smoothies. In 2009 for example, Datamonitor's Product Launch Analytics database recorded the launch of 77 smoothies and 237 juices (see Figure 1). The gap between the two was smaller in 2008, however, with 124 juices and 64 smoothies launched. One of the main reasons for the...
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