I like to think that in the cricketing days of my youth I was a rather useful medium paced bowler, but the brutal reality was I was also a rather hopeless slow batsman and as such languished at the tail end of the batting order. Since then I have always had a sympathetic eye for tail-enders everywhere.
And as a marketing strategist I am still fascinated by how businesses treat the tail end of their brand portfolios. Brands that often don’t fit the global-regional strategic model but enjoy local support and often punch above their weight in profit contribution.
So I was interested when Innocent recently announced that it was pulling out of veg pots market in May this year to focus on soft drinks. As someone who has enjoyed a veg pot or two and has worked extensively in the food-to-go and fruit-based beverage arenas I will be sad to see it go.
Launched in 2008 Veg pots have in recent years struggled as own-label equivalents have proliferated.
In the meantime the Innocent soft drinks brand portfolio marches into continental Europe and its product range expansion continues with the launch of coconut water and carbonated products.
So what went wrong for poor old veg pots? Here’s my outsider’s perspective..
Well the Innocent brand is all about making it easy for consumers to consume their five a day. Fruit is good for you but messy to eat – here’s a smoothie – we’ve done all the hard work for you. Oh and by the way we’ll do it in a quirky fun way too. Great.
So expanding from the orchard into the vegetable patch next door seemed consistent with the brand and they developed product propositions that were very strong too – lots of taste from interesting on-trend recipes. No doubt consumed by a devoted core of vegetarians and a few occasionals like me.
The first challenge with this initiative is that it required a new and different buying relationship than the soft drinks buyer in the major multiples. Whilst this hurdle had been overcome in the UK the requirement to repeat this in other markets with any geographic expansion meant that cross-border growth was always going to be more of a challenge relative to other opportunities.
It also required access to short shelf life food manufacture and distribution capability with all that brings.
The second challenge was price. At £3.30+ a shot these pots were a relatively expensive option for an everyday lunchtime occasion. That left the door open for the own label imitators to step in with lower priced equivalent propositions at nearer the £2.00 mark.
Despite many promotional periods at more competitive price points, that would have no doubt have lifted flagging volumes at a much lower profitability, the writing was already on the wall.
During this period the gradual acquisition of the Innocent business by Coca-Cola started in 2009 and finished with them owning 90%+ of the business by early 2013. Whilst this would have added access to broader distribution clout it would make any food aspect to the business portfolio look even less “core”
Against this backdrop, for that devoted group of regular consumers, they were they never going to have enough variety. There’s only so many times you can eat a Thai Coconut Curry in one week delicious though it may be.
Once it became clear that there were strategically more interesting growth opportunities on offer for Innocent, such as European expansion, then the Veg pots were always going to be at the back of the queue for strategic and monetary support.
“The innovation required in that market was disproportionate to the growth opportunity” said CEO Douglas Lamont in the Grocer.
It is a great shame that the brand leading the way to make this market will not be the one, in the end, to profit from it and it would be interesting to see whether the own label category could survive without a branded champion.
It also acts as a timely reminder to innovators out there that no marketplace is static and that competitors will react if you start to make headway. There’s double trouble in store if your competitor is your customer too!
For me I applaud Innocent for having the guts to launch this product range in the first place and I will be a little sad as I tuck into my Sainsbury’s My Goodness Thai Curry pot this lunchtime.
But what’s this? In the space where the Innocent Veg pot once sat here comes Bol. Looking remarkably like the Innocent product but with a broader range, Bol has been phased in as Innocent is phased out. Back at my desktop I discover that the guy that ran veg pots at Innocent is running Bol with the support of the Innocent founders!
Well good luck to them. Initial reactions are positive in terms of product but I can’t help feeling the price point may still be too high.
You can tell a lot about an organisation (or a team) by how they treat their tail-enders. In this case Innocent have in effect supported one of their ex-team to run with the business he helped to build. You can’t help but admire that entrepreneurial stance.
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