Another One Bites The Dust....
Monday, 13 April 2009
We’d always cited Innocent as a shining example of the resistance to ethical and independent companies selling out to global corporations*. The funky smoothie maker with a halo in its logo was an exception to the rule that an ethical start must end in a sell out justified with weasel words. So when we read about Innocent selling a share of its business to Coca-Cola, we felt like we’d lost a friend. And judging by the amount of negative public comment on the brand’s own website, we’re not the only ones who feel disappointed. Has the halo slipped?
THE INNOCENT STORY
Innocent was started in 1999 by Adam Balon, Jon Wright & Richard Reed, three undergraduate students who met at Cambridge. From selling just 24 bottles on its first day, it has grown to a business which: sells two million smoothies a week, enjoys an annual turnover in excess of £100 million, has its products stocked in 10,000 outlets across Europe, employs 275 people and has operations outside the UK in Ireland, France, Scandinavia, Germany & Austria.
Innocent has always promoted itself in terms of healthy products and concern for the environment. Its products are more expensive than those of its competitors but its customers have been willing to pay the price in return for product quality, and the brand’s ethical stance and quirky behaviour. The offices in West London are known as Fruit Towers and their delivery vans are disguised as cows.
On 6 April 2009, almost exactly ten years from those naive but enthusiastic beginnings, Innocent sold 10-20% of its business to Coca-Cola for £30m, leaving each of the founders with about 20% of the shares. So was it a sensible business decision or an ethical sell out? If you read the very long series of comments on ‘innocent & investment’ in the daily thoughts section of the Innocent website**, you will see that there are very strong opinions expressed both ways, but the outraged outnumber the approving by at least ten to one.
BIG BUCKS AND THE GROWTH FETISH
So what is it that tempts idealistic entrepreneurs to sell some or all of their business to a large corporation which clearly doesn’t share its vision or values? In short, great wads of cash and the opportunity for faster expansion of the business. With turnover in excess of £100m and over 70% of market share, Innocent was already making big money but the lure of even more has seduced its co-founders down a well-trodden path.
The message that has been spread by the modern neocons for years now is slightly more subtle than the one put out by Thatcher’s minions. They’ve softened ‘greed is good’ to ‘growth is good’. Even when the economy is in a mess because of too much dodgy credit allowed by too many dodgy banks run by too many dodgy geezers, people like Brown are talking about riding out the storm and getting back to normal patterns of growth. Few people have been willing to challenge the growth mantra and point out that endless economic growth and consumerism is an unsustainable model for this wonderful planet of ours. Another pair of shoes ain’t going to solve the real crisis, Gordon.....
Green & Black’s and Ben & Jerry’s were two other strong independent brands which took the easy cash route and appear to have different opinions about the decisions they made.
Craig Sams started Green & Black’s, the organic chocolate company, whose Maya Gold bar was the first fair trade product in the UK. He sold out to Cadbury’s in 2005 but says, “overall it’s worked fantastically well. They have had the resources to really support the brand and take it to places.”
However, Ben & Jerry’s, the independent ice cream maker which sold out to Unilever in 2000, admitted in its social audit a few years later, “we are beginning to look like the rest of corporate America.”
The real shock has been caused by Innocent’s choice of business partner. Even among the corporate nasties, Coca-Cola stands head and shoulders above almost all of the competition
SELLING YOUR SOUL TO THE DEVIL
The incredible backlash which has started against Innocent is not just about the brand selling out, although that would have been both surprising and disappointing. The real shock has been caused by Innocent’s choice of business partner. Even among the corporate nasties, Coca-Cola stands head and shoulders above almost all of the competition. If you visit sites like Killer Coke and Corporate-Free or read Mark Thomas’ excellent book Belching Out the Devil, it won’t take you long to see how the sugary fizz producer has earned its terrible reputation. This makes Innocent’s statement that, “we’re dead excited about the investment....in some small ways we may be able to influence their thinking”, at best hugely naive or at worst downright deception.
INNOCENT JUSTIFICATIONS
Innocent claims that the deal will just allow it to do more of the same....
“Everything that innocent stands for, remains in place – to only produce natural, healthy stuff; to push hard for better quality, more socially and environmentally conscious ingredients; to find more efficient and environmentally friendly ways of producing and packaging our drinks; to support charities in the countries where our fruit comes from; to have a point of view on the world, and to not take ourselves too seriously in the process. In fact, this deal will simply allow us to do more of these things.”
Innocent claims that “being accountable to our customers is something that is in our blood.” Unfortunately, it forgot to ask any of its customers if they’d like Innocent to sell out and, even worse, whether they’d choose Coca-Cola as the ideal sell out partner
The problem is that up to 20% of its profits will go to a huge corporation that does almost exactly the opposite. In the our story section of its website, Innocent claims that “being accountable to our customers is something that is in our blood.” Unfortunately, it forgot to ask any of its customers if they’d like Innocent to sell out and, even worse, whether they’d choose Coca-Cola as the ideal sell out partner. Quite a few customers have asked why they weren’t invited to become investors, an idea which could have kept the brand on a more independent and co-operative footing even if it raised less money. Innocent’s founders have thanked customers by writing, “without you, we’d just have an expensive fruit-crushing hobby”, but those same customers might have preferred the thank you to be the opportunity to buy a stake in the brand and a bigger say in its future.
THE BACKLASH CONTINUES
In terms of a business decision, fitting into the neat capitalist model of profit and growth before all else, Innocent’s sale to Coca-Cola seems a good decision. And if like several bloggers, you’re still going to buy Innocent products simply because they taste nice – regardless of the brand’s ethics – then you won’t care about the sell out. If, however, you think that there are more important things than profit and things tasting nice – ethics, social justice, water for people living in drought regions, care for the environment, the freedom to form and join a trade union without being threatened or killed – then you might want to contact Innocent and make your point. You can do it on their website blog and you can join one of the many Facebook groups opposing the deal. In addition, you can boycott Innocent products so that Coke doesn’t get its 20%. Finally, for those who like to get active on the front line, you might want to protest outside the Annual General Meeting at Fruit Towers on Saturday 16 May or even buy a share and then make your point at the meeting. Innocent has promised to serve tea & cake but a bit of humble pie might be more appropriate. The reality is that the halo seems to have well and truly slipped, if not come off altogether. Shame. Real shame.
LINKS
Innocent – Letter from the Founders
Innocent Smoothies – Give Back Coca-Cola’s Dirty Money (Facebook)
Mark Thomas (with response to Innocent’s sell out excuses)
LINKED ARTICLES ON TAKE THE RED PILL
