Was smoothie brand Innocent before the big turn, and the three founders realized they had to do everything necessary to make it a success. Even if this meant a little subterfuge.
This was in 2000, and the supermarket chain Waitrose has agreed to test the company of drinks in 10 stores.
Innocent was just 18 months old at the time, and it was the first time that he had had his smoothies on the shelves of a national retailer in the UK.
You might think that it would have been a time of celebration for the London-based start-up, but as co-founder Richard Reed explains, were nervous.
“We were very aware that if the smoothies sold well that would have been put in more than 10 shops, and so on. But if it does not sell well, it would be all over for us before we start,” he says.
So Richard and his fellow co-founders, Adam Balon and Jon Wright, came up with a plan.
“We had to make the smoothies sold,” Richard says. “And the only way to ensure that was going to go into all the stores and buy our products. So that is what we did.
“It was mostly an exercise in faking it until you make it, but fortunately, then we started to see strong sales in the shops, we were not to buy their stocks.”
With the Waitrose test a resounding success, it was not long before he was stocking Innocent smoothies at the national level, and in a few years all the other big UK supermarket groups followed their example.
Today, Innocent is one of the UK’s and Europe’s largest smoothie and juice brands, with an annual turnover of over £ 350 million.
Yet, while the three founders remain on the board, you don’t actually own the business. Instead they sold to US drinks giant Coca-Cola is back in 2013, as a result of the company to obtain for itself in difficulty during the global financial crisis of 2008.
Richard, 45, helps us very Innocent rise.
The three co-founders were friends at the University of Cambridge, first of all get jobs in the corporate world. Richard in advertising, and Adam and Jon in management consulting.
Four years later, during a skiing holiday together, they decided to close all their work and the launch of a smoothie brand. Their idea Innocent, it was to make smoothies entirely natural, and fresh fruit, without resorting to the use of less concentrated and preservatives. And the undertaking would be to give 10% of proceeds to charity.
So relying on savings and maxed out credit cards, they first started making their smoothies from the small kitchen of a share house in west London, before eventually finding a farmer, in the north of England that would crush the food for them.
Ensure financial support has been much more difficult, however. “We went to 20 banks that all of the series of ‘no’,” Richard says. “Then we went to 500 venture capital companies in London. Most do not come back to us, while the rest said ‘no’.
“One of them said, we scored zero out of five investors manual, because too young, had not appointed a leader because we wanted to run together, had no experience in the industry, and had not run a business before.
“He said that there have been an awful investment opportunities, and he will not touch us. And that all makes sense on paper.”
The despair, the three founders, all sent to the whole family and friends to ask if someone knew someone wealthy who might want to invest.
An old school friend of Jon Wright suggested they try a investor American called maurice Pinto. He was impressed enough to invest £250,000 and Innocent was up and running. For further help and support came from Mike Lord, a businessman who ran a Welsh-based juice company.
After Innocent concluded agreements with all the major UK supermarket groups – has helped with the purchase of billboard advertising close to their homes – the sales dramatically, and has continued to grow strongly, until it all went wrong in 2008.
“We have had 10 years of incredible growth, but we then ran into problems, as the global financial crisis hit,” says Richard.
“Suddenly our sales have declined as people have said,” I’m going to have less money, so I need to tighten my belt.
“Then we got a call from our producer, saying: ‘I’m really, really sorry, we’re going in the receivership to 5 in the afternoon today, so this is the last production that we can do for you”. And at the time was doing 100% of our product.
“Then our bank said ‘we want our money back’, and we said, ‘I’m sorry, we don’t have’, and they replied: “in this case, we’re going to have to take delivery of the business’.
“So we were suddenly in the position where we had to sell part of the business to save it.”
The three founding members, has had a number of interested parties, but decided to go with Coca-Cola, the sale of parts of the business in a series of steps, until in 2013, with an Innocent annual sales, reaching the figure of £210 million – the american giant has taken full ownership for a final figure that Richard says was “north of half a billion pounds”.
Coca-Cola and then immediately invited them to stay in the board of directors, consultants, which remains to this day.
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“For me it is a fairy tale,” says Richard. “All we did better than we expected, not a single person lost their job, and the relationship [with Coke] is brilliant.
“And Coca-cola is committed to Innocent’s ethical ideals, and also by giving 10% of its profits to charity.”
While not attending the Innocent meetings of the council, with its three co-founders now run their own investment company JamJar. That show, to have an eye for talent, have invested in successful businesses like food delivery business Deliveroo and snack food company Graze.
Richard also regularly participates in the events that give support and advice to young entrepreneurs, such as those organised by the Institute of Directors IoD 99 network for entrepreneurs.
Alex Mitchell, founder of the IoD 99, says: “The UK has undergone a revolution in business over the last few years, and Innocent people have been one of the leading companies in office.
“Richard has given his time to encourage the next generation of the founders of the company… is very important to the success of entrepreneurs discuss the lessons they have learned with the new start-up, in order to maximise the chances of survival. Where Innocent led, many of our members have followed.”
Richard says that his core advice to those who think to start their own business is not to try and do everything yourself.
“Team up,” he says. “You can’t do everything alone.”Follow The Boss editor Smale on Twitter @WillSmale1