Innocent Vegetable and Noodle Pots: Risks of operating outside a brands core business

Innocent Vegetable and Noodle Pots: Risks of operating outside a brands core business

Code: ML-ML00022-017 | Published: May-2016 | Pages: 18 | MarketLine
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Innocent Drinks initially focused on making soft drinks for adults and children. To reduce its reliance on the poorly performing drinks sector, the company decided to broaden its product portfolio to include food products in 2008.

The company moved into a completely new category that was not related to its core business model. As a result, it faced different barriers on its path to success, which coupled with its lack of category and market knowledge, resulted in a failure.

In 2015, the company decided to axe its food range and focus solely on drinks again, with Coca-Cola taking possession of a 90% stake in its drinks business in the meantime.

Key Findings
Looks at Innocent Drinks attempt to broaden its product portfolio to include food products in 2008.

Analyzes the attempted expansion and assesses how successful it has been.

Examines the factors behind the expansion failure

Assesses the challenges associated with operating outside a brands core business.

Reasons To Buy
What were the reasons behind the Innocents expansion?

Why did expansion fail?

What are the risks of operating outside a brands core business?

Key Highlights
Innocent Drinks initially focused on the soft drinks market, but decided to broaden its portfolio after seeing its sales fall sharply in 2008

This move, which was supposed to reduce the companys reliance on the drinks sector failed, resulting in a further sales drop in 2014.

In 2015, the company decided to axe its food range and focus solely on drinks again, with Coca-Cola taking possession of a 90% stake in its drinks business in the meantime.

Table of Contents

Overview
Catalyst
Summary
Innocent breaks away from comfort zone
Entering the food market in attempt to aid falling drink sales
Betting on different taste preferences
Seeking to apply ethical and healthy values in convenience segment
Drink business on the rise after losing controlling stake to Coca-Cola
Innocents food range failed to catch up with success of core drinks, ultimately exited the market
Lesson learned from Innocents food range failure
Not a simple brand extension but complete business model change
High private label share leaves little space for competitors
Average-spending consumers not happy with upmarket price
Betting on small target customer base failed to address meat eaters
Distracting from main focus brought harm to Innocent brand
Former Innocent manager launches his own "flexitarian" brand
Conclusions
Brand extensions can be risky, but with the right planning the rewards can be great
Reliance on premium alone not always advantageous
Betting on selected dietary preferences results in limited expansion opportunities
Appendix
Sources
Further Reading
Ask the analyst
About MarketLine
Disclaimer

List of Figures


Figure 1: Innocent vegetable pots varieties
Figure 2: Innocent promise
Figure 3: Selected products consumption in the UK, 2014
Figure 4: Price and size comparison between Innocent and other private label and branded products, 2014
Figure 5: Ready meals purchasing priorities in the UK, 2014
Figure 6: Daily diet preferences in the UK, 2014
Figure 7: Juices and smoothies market value in the UK ($ m), 2014
Figure 8: BOl selected products
Figure 9: BOl selected advertising

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