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Back in April I posted on the innocent smoothies AGM, and their vision to become "The Earth's favourite
little FOOD company". This suggested brand stretching beyond drinks was on the way.

Well, here we are in September and the first extension is on the shelves: innocent veg pots. (Rumours of a breakfast pot turned out to be, well, rumours.)

Picture 1

So, will these pots make pots of money for innocent? I'm sorry to say that I think the answer to this is "no". I hope I'm wrong, as I'm an innocent fan.

Issue 1 (a non-issue): breaking brand associations
In
their own words, innocent is famous for "tasty little drinks". The brand equities could be summarised simply as:
– sausage/product: healthy, tasty, fresh, fruit (100%), drinks

– sizzle/personality: funky, fun, friendly personality.

The veg pots break one of these equities, by going from
drinks into food. They bend another by going from fruit to veg. The packaging is full of innocent-style copy from Dan and the team (e.g. "No vegetables were harmed in the making of this product, apart from a bit of light chopping")

But you know what? Brand equity is not what will make or break the veg pots. There are millions of innocent fans who would love to
try new products from the brand.

The real challenge: breaking the business model
The
bigger challenge with innocent veg pots, as with most brand extensions, is not brand equity, its the business model.

On the up-side, these pots have a juicy 3 portions of veg, tapping into a real need to help us get our recommended 5 portions of fruit & veg a day. But, there are several barriers to success:

1. Creating a new category and usage occasion: Veg pots are a new type of product altogether. Now, get this right and you can win big of course as you can have 100% of the new market. But its quite hard to explain what they are. "Like a soup, but thicker and with bits". innocent call them "veg with edge".  I think it may be a challenge to get people to try once.

2. Getting into the repertoire: innocent not only have got to persuade people to try the product once. They have to re-wire peoples' brains so a veg pot becomes a habitual lunch option. And there are two more things that will make this very hard…

3. Price-point: This is a killer. These pots cost a pot of money at £3.50 (4.5 Euros/$6). That's a super-expensive at-home lunch option, for what is a 1 to 1.5 portion serving. For example, a 2-person carton of chilled soup is about half the price. So that's a 400% price per serving premium. Ow.

4. Product quality: unfortunately the product I tried (Tuscan Bean Stew) was very average. Bland, and not that tasty at all 🙁

5. Taking on the retailers: check out the chilled food section in your supermarket. Which brands do you see? Very, very few. Retail brands in the UK have 90%+ of this fast growing market sown up. And they innovate like crazy, using a host of 3rd party suppliers. One of the only brands to have succeeded is Covent Garden chilled soups, but they've been at it for 20 years. So far, veg pots are in the upmarket Waitrose store only. The other retail chains may watch and see what happens, but they may not be that keen on giving chilled shelf-space to innocent.

The risk: "new toy sydrome"
The risk with the veg pot is that this "new toy" distracts management time and resources away from the core smoothies business. A shame, as there is still plenty of
opportunity to grow the core (e.g. in the UK prompted awareness is
c.85%, but trial is only 10%). Also, this is a time when the brand is under attack from Pepsicos' Tropicana. 

So, I'm sorry to put this in the "miss" column of predicted Hits n' Misses for 2009.

STOP
PRESS: Seems that my concerns on the core smoothie business were, I'm
sorry to say, spot on. Latest Nielsen data for 24 weeks to Sep shows a,
gulp, 21% drop in value sales. This is attributed to the credit crunch, which is part of it. However, I suggest this is also due to : i) increased competition, including lower priced offer from Tropicana, ii) attention spent on extensions like veg pots, not on growing the core, iii) failure to drive price down on innocent smoothies over time, to make them more accessible