When UK smoothie brand Innocent opened its doors to The Coca-Cola Co. 12 months ago, there were a few raised eyebrows among industry watchers, and among the consumers who were evangelical about the brand. Multinationals had gobbled up other wholesome companies before – PepsiCo bought the UK’s PJ’s Smoothies in 2005, before scrapping the brand to focus on its international Tropicana smoothie range – but to the cynical, there was a sniff of Body Shop sell-out about the Innocent deal. With its halo logo, crayoned packaging and irreverent attitude, Innocent’s branding suggests everything the world’s largest soft drinks company is not. Innocent promises to be healthy, sustainable and to share its profits with worthy causes. “And if we don’t, you can tell our mums,” yells its cartons.

For Coca-Cola, adding fruit and a touch of corporate innocence to its portfolio looked to make sense. Innocent had grown from sales of just 24 smoothies on day one, in 1999, to two million a week in 2009, and had a 72% market share in the UK (11% of the fresh juice market). For the three university pals who launched Innocent 10 years earlier, the €35m they pocketed from selling a stake of just under 20% to Coca-Cola would fuel expansion throughout Europe. Innocent’s argument for working with the drinks giant – and with McDonald’s, which has stocked its products since 2007 – is that providing healthy fare, creating jobs and generally doing the right thing on a bigger scale, is a good thing. No need to tell their mums, then.

Despite business slumping from a pre-tax profit of £10.1m in 2007 to a £9.1m loss in 2008, due to “challenging” conditions and several one-off costs, Richard Reed, one of Innocent’s founders, insists that the future is peachy. In fact, sales growth was strong in 2009 in the UK, and was up by 40% on the continent, where Innocent is now available in 14 European markets including France, Germany, Austria and the Nordic states. Reed says that consumer yearning for goodness has actually been heightened by the recession. “Innocent is not the cheapest product on the shelf … but it’s the best value. People want healthy stuff, which has got to be delicious and convenient. Big tick for Innocent on health, and on the value you’re getting for the money.”

This may prove to be a winning blend. Figures from market researcher Mintel show that, in the UK, 12 million litres of smoothie were sold in 2003; that hit 92 million in 2008, much of it sold by Innocent, though Tropicana Smoothies is now a serious player. In the US, where smoothies are now stocked in hotels, clubs, and fast-food outlets including McDonald’s and Jack-inthe-Box, Global Industry Analysts Inc forecasts sales to grow  
6.3% a year for the next four years, and to pass $4.4bn (€5bn) in 2012. The demand for healthy drinks is also propelling growth in fresh juice and smoothie sales across Asia, Australia and Canada.

In January, Indra Nooyi, the chief executive of PepsiCo, worldwide, said that she wanted the company to treble the revenue from its ‘good-for-you’ ranges, which include Tropicana and Naked Juice from $10bn to $30bn in the next decade.

“The US is likely to be the next big market for us,” confirms Reed, but probably not until 2012 at least. “But we also want to expand into eastern Europe and India. And we’ve had a lot of interest from the Middle East and Australia.” He says that the Coca-Cola money and resources will certainly accelerate expansion, but that the company had always aimed to go global since its launch. “We actually spent £30,000 buying the Innocent trademark in several countries a few years ago.

Then there are the new products. Innocent is already doing ready-to-eat vegetable dishes – the Veg Pots range that cost €60,000 to develop and turned over €9m in its first year – and a flavoured water range, This Water, which posted growth in sales of 57% last year. But what Innocent stands for can apply to products and services well beyond fruit and veg. “Our vision is to build an internationally recognised brand which is synonymous with being natural, delicious, healthy and sustainable,” says Reed. A former ad man, he is passionate about the value and power of branding. “There’s no separation between brand and business. I’ve come to love brands as things that create tremendous value, inspire consumers to be loyal and companies to innovate.”

Great brands have a vision of where they’re trying to go, he adds, and strong brands help companies travel across new categories. “We like the model we have; we just want to do more with it. Seventy years out, we’ll definitely be doing other things. When we were three guys setting up the business, we said we’d be doing food, bodycare, even holidays.”

If all this sounds a little Virgin-esque, that’s probably no coincidence.“People like Branson have written a licence for the UK individual to believe that it’s possible, and have made business sexy. It’s about allowing people the licence to dream and think it can be them too,” adds Reed.

Alexandra Richmond, a senior analyst with Mintel, says demand for natural in products is evident across various product categories and would make fertile ground for Innocent to cultivate. Of all new beauty and personal care products launched in the UK last year, 41% claimed to be natural, herbal, botanical or organic, and Mintel found that almost three in 10 adults are influenced by natural ingredients when buying those products. “The values of the Innocent brand would work very well in beauty and personal care, particularly because there’s a trend towards people wanting to cut out unnecessary ingredients,” Richmond says.

Some brands stretch better than others, says Graham Hales, global chief communications officer with Interbrand. Virgin has succeeded in applying a sense of maverick fun to new products, though trains may have been a step too far, he says. Innocent has values that are similarly stretchy. “Innocent established itself in smoothies and is now in food products. Every time it has offered what feels like a healthier, fresher alternative,” Hales says. “I can certainly see that Innocent has space and the opportunity to stretch; it just needs to ensure it remains true to its roots wherever it goes.”

Those roots are pretty humble. Reed’s first brush with business was a holiday job in a dog biscuit factory in Huddersfield, north England. He quit, determined to run his own business, when having suggested to the boss that he could keep the floor clean more easily with a broom, was told: “Son, you are the broom.”

A few years later and Innocent Drinks was born after the founders, Reed and business partners Adam Balon and Jon Wright, quit their careers in advertising and consultancy when their success selling smoothies at a summer music festival convinced them they were on to a good thing. They battled to get the startup investment they needed to be able to replicate their recipes on a commercial scale, and couldn’t afford to advertise for the first five years. Reed says Innocent’s management team is determined to remember how the company started and maintain that sense of smallness – and intimacy with consumers – as it grows.

“The philosophy of Innocent, the things that we care about, we didn’t go to a design agency and ask them to create that. It’s how we talk and what we believe in,” he says. “As we’ve grown, we’ve focused on recruiting people who share the same values, caring about nature and health, and have an innate warmth about them.” In the office, “People’s champions” – the folk that elsewhere would be called customer services – sit at the heart of things. The bananaphone that consumers are encouraged to ring “for a chat” really is a yellow, plastic banana-shaped phone, and if it’s not picked up quickly enough, everyone else’s phone rings and they take turns to answer. That includes Reed, too. “We all work for [the consumer], whether you’re in the finance department or the sales team,” he says.

Hales suggests that if the Innocent philosophy is going to be applied to diverse product categories, it should be done sooner rather than later: “They’re about authentic, wholesome goodness. They took a fresh approach to smoothies, didn’t take themselves too seriously and provided a good, natural product. You can see that brand working in beauty, healthcare and beyond. The type of people who would go on an Innocent holiday would be like-minded. Innocent have a tremendous understanding of their brand, but they must not get typecast by sticking just with smoothies and veg for too long. The quicker they can move, the better.”

Whatever happened to…

Start-up ethical brands have wedded corporate giants before; marital bliss and bumper profits have resulted in many cases, but there’ve also been a few dejected brides slung aside by powerful husbands not long after saying “I do”.

Coca-Cola has been behind some of the bliss and has done some of the slinging. It bought out American tea and beverage maker Mad River in 2001 as it began to diversify its portfolio beyond fizz. Mad River is no more; the brand was killed off fairly swiftly, as was the Planet Java ethical coffee range that Coke bought the same year. Still around and selling well, though, is Honest Beverages, the home-grown low-calorie tea range that Coca-Cola took a 40% stake in 2008. Sales that year were worth $38m, up from $23m a year earlier as Coke was able to increase distribution.

Still in the drinks world, Pepsi bought British company PJ’s Smoothies in 2005, a brand that had dominated the category in its home market until a year earlier. The honeymoon was quickly over, however: facing growing competition, Pepsi relaunched the brand, then scaled it back, and then killed it off, in the space of three years.

Ben & Jerry’s Homemade ice cream is a business success under the auspices of consumer goods giant Unilever, which bought the company in 2000 for $326m. Founded by hippy friends in 1978, the company was built not just on groovy flavours but a social agenda. While Unilever promised to “nurture” that agenda, it didn’t commit to continue with the B&J policy of donating a portion of all profits to charity, nor on linking the company’s top earner’s salary with that of the lowest earners. The founders made it clear, publicly, that they objected to Unilever’s choice of CEO shortly after the takeover but, having sold up, their influence was minimal.

When French cosmetics giant L’Oréal bought The Body Shop for £652m in 2006, more than a few observers thought Body Shop founder Anita Roddick had sold more than her shares. The Body Shop was, after all, founded on being against animal testing; L’Oréal was not. Pre-buyout, The Body Shop had run an international ad campaign to promote women’s self-esteem, which it said was under attack by the giants of the beauty industry. But in what has now become a crowded marketplace, the simple, natural beauty mantra that The Body Shop was built on is no longer a unique selling point. The Body Shop’s sales are stable, L’Oréal reports, and innovation continues, with organic skincare and fragrances; the number of stores has increased from about 2,000 to 2,500 worldwide in the four years under L’Oreal. Yet many of its most loyal customers see little reason to believe anymore.

Meanwhile, a skincare range borne in Japan with a story of simplicity and near-miraculous results has flourished under the ownership of personal care giants Procter & Gamble. The range, based on the ingredient Pitera, a by-product when sake is brewed, went from complete unknown when produced by Max Factor to international hit when it was relaunched as SK-II after P&G took over Max Factor in 1991. Despite a slowing in sales of women’s beauty products for P&G in 2009, SK-II posted double-digit growth.

Fans of ethical chocolate will be watching closely what happens when US firm Kraft takes over the running of Cadbury. The Green & Black’s brand of organic and socially responsible chocolate was taken over by Cadbury in 2005, when it was the UK’s fastest-growing chocolate brand. The brand’s values are what made it so valuable and it would seem only logical to preserve them. But a bigger parent company has bigger issues to deal with, and if chocolate-lovers are hoping Kraft will honour Cadbury’s undertakings to preserve what Green & Black’s stands for, even if it doesn’t work for the balance sheet, perhaps they should have insisted on a binding prenup.