Innocent Drinks Case Analysis

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Innocent Drinks (“Innocent”) should start the European expansion because it has the largest growth potential and best leverages the core competencies of the company. The structure of the chilled drink business in Europe, especially for smoothies seems to be an oligopoly. A few large players take the lion’s share of the market. As such, Innocent has the potential to achieve similar market share as in the UK by expanding to new European markets and using its strengths in dynamic marketing, branding, and delivering a high quality product.

Finally, the future sales potential of innocent (when the partners get ready to move on) would be enhanced by having a wider distribution channel in Europe that could appeal to a larger global player who would be willing and justified to pay a higher multiple on revenues.

Expansion to Europe
Innocent’s strong brand and ability to drum up excitement can be used as a red carpet in regions targeted for expansion. It’s bottle label slogans could be used subway adds that don’t necessarily even tout the product, but start pushing the off kilter messages to generate a “what this Innocent thing all about” approach before people even start seeing the product on shelves. This approach can also be helpful as an educational, create a market, tool in countries where the smoothie phenomenon is not yet strong.

Strategically, Innocent will want to need to investigate how lifestyles are evolving in some of these countries. Are gym memberships or the organic movement on the rise? Are incomes increasing and are people spending more of their disposable income on health and beauty?

Expansion to US
Dominate European market before contemplating taking brand equity to the United States. That way there will be more brand equity and perhaps a diversified product line by that time to exploit. Perhaps partnering more exclusively in the US with a few key retailers would highlight the premium nature of the Innocent brand while also being a new...
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