Coming Up Fast: How the world fell for a bunch of smoothies - Giving up lucrative careers to set up a business selling mushed-up fruit may sound bananas, but for Fresh Trading all the hard work is coming to fruition, as Andrew Saunders discovers

Coming Up Fast: How the world fell for a bunch of smoothies - Giving up lucrative careers to set up a business selling mushed-up fruit may sound bananas, but for Fresh Trading all the hard work is coming to fruition, as Andrew Saunders discovers - An old

by ANDREW SAUNDERS
Last Updated: 31 Aug 2010

An old bus garage in London's fashionably seedy Ladbroke Grove is home to Fresh Trading, creators of the Innocent smoothie, an assault on the upper reaches of the UK juice business. Inspired by an American market worth around dollars 250 million, fresh-faced founders Adam Balon, 27, Richard Reed, 26, and Jon Wright, 27, naturally hope that their crushed-fruit recipes will take off in the same way that other Stateside imports, such as luxury ice cream, bagels and 'Italian' coffee, have before them.

To judge from the way that the stuff has been jumping off the shelves at upmarket metropolitan stores, including Harvey Nichols, Caffe Nero and Planet Organic, (despite its hefty pounds 1.79 price-tag for a 250ml bottle), its makers may just be right. They claim that bright young professional Brits are crying out for this instant health fix.

As university friends who always talked of going into business together, the threesome started out on high-flyer graduate career paths: Wright and Balon with two of the 'big six' management consultancy firms and Reed with ad agency BMP, the firm behind New Labour's election campaign. It was on a skiing holiday in February 1998 that they realised that their high-octane jobs could be ruining their health. 'We'd been working hard and hadn't had anything decent to eat for weeks. We knew that we should be eating lots of fresh stuff, but it was always simpler to get a burger or a kebab,' says Reed.

Informal research among their friends and family revealed that most of their peers were in the same boat - working hard, playing hard and eating badly. That set them thinking. Wright remembered the smoothies he'd drunk while working in San Francisco with Bain & Co, to combat his unhealthy diet. 'Properly made smoothies are fresh, natural and delicious, and have an amazing nutritional profile,' he says.

So, for the next few months, they spent every spare moment 'thinking everything through', preparing to go it alone. Using the skills that their day jobs had taught them, Balon and Wright drafted and redrafted business plans, Reed concentrated on their marketing strategy and research, and all three made and drank gallons of prototype smoothies. They had decided that what they wanted was an unadulterated juice, made from freshly crushed fruit, with none of the added concentrates, sugar or water, that reduce costs and extend shelf life.

In August 1998, with three favourite recipes (strawberry and banana, cranberry and raspberry, and orange, banana and pineapple) under their belts and a conviction that their concoctions would sell, they quit their jobs, but it took a further nine months before they got to spend the first day's takings (a princely pounds 16) on a celebratory round of drinks.

'We knew nothing about juice and it took us a hell of a lot longer than we thought to get to market,' admits Reed. Although several people had told them it could be a lengthy process, in their naivety - or arrogance - they thought they could have things up-and-running in no time. Their plans had relied on generating quick sales to finance growth and, when that didn't happen, it 'rapidly became clear that we needed more capital', says ex-McKinsey man Balon. They were in luck. A colleague of Wright's put them in touch with business angel Maurice Pinto.

'My first reaction was that I needed this like a hole in the head. I only saw them because they came with a personal recommendation,' he says.

When they did meet, however, he was so taken by their skills and personal calibre that he changed his mind and agreed to finance them to the tune of several hundred thousand pounds. 'It's very unusual to find so many quality people in a start-up. I had never seen such fire power before,' says Pinto.

He admits that being no expert in juice, his investment represents 'an informed lottery ticket', but he believes that the Innocent boys are worth a punt whatever they do. 'I didn't know why they wanted to start a juice business, but I knew I wanted to go along for the ride.'

With their first round of funding assured, the trio's biggest headache was finding a manufacturer to crush and bottle the fruit without adding anything to it. It had been easy enough to knock up great smoothies in a blender at home, but on a commercial scale, manufacturing costs and shelf life can take precedence over taste. 'Everywhere we went, people in the industry told us that what we wanted was impossible and that we'd have to add water and preservatives to make it viable,' says Balon.

Determined not to compromise on quality, the search was particularly tough. Three times they got as far as costly production trials, only to be disappointed. On one occasion, pounds 2,000 of fruit (bought with Balon's already overtaxed credit card) went straight down the drain because of a machinery fault. 'It was like watching pounds 10 notes pouring away,' he recalls.

Finally, after many false starts, they found their manufacturer and were in business.

Innocent tastes good and, it is claimed, provides your recommended daily intake of fruit all in one bottle. But the insistence on quality means keeping the retail price even vaguely competitive is a challenge. 'Yes, it's expensive, but look what's in it - three-quarters of a pound of fruit in every one,' says Reed. Reducing the price is not an option, nor is putting more in the bottle, because air-freighted fruit is pricey, says Balon. 'It's not like an ordinary soft drink, where the cost is in the packaging. For us, the cost is nearly all in the contents,' he says.

As the trio cheerfully admit, the hefty price tag means Innocent is likely to remain a niche product aimed at well-heeled young City types. But, they claim, for a generation keen on 'affordable luxury', that should not be a problem. Innocent's unadulterated brand image has also had the unexpected benefit of leaving them on the winning side of the genetically modified food debate.

'We take what is in the bottle pretty seriously, but not much else,' says Reed, described as 'cherry picker' on his business card (that's marketing manager to you and me) and presumably the man behind the customer feedback e-mail address 'iamabitbored @beinnocent.co.uk'. Every day is dress-down day at Fresh Trading and ties don't figure much in its lexicon. But if its founders' style seems a bit irreverent, beneath it sound business principles are at work.

'We are not anti corporate. It's just that it's easier to connect with people when you aren't wearing a suit,' insists Wright, who, in deference to the British weather, has added a sweater to his West Coast uniform of T-shirt and jeans. And while their office may be untidy, the mess is not all that it seems - the collection of empty juice bottles littering the desks is the Innocent boys' 3D take on competitor analysis.

Expansion has been gradual so far, based on a city-by-city roll-out. Innocent smoothies are now available as far north as Edinburgh and Glasgow, and its manufacturers have recently started talking to supermarkets and multiples. Despite the difficulties that a small company like Fresh Trading will face in getting on to their shelves, the so-called big four (Tesco, Asda, Sainsbury's and Safeway) are vital to the continued growth of the business, says Balon.

'We need to get into supermarkets if we are to grow into a decent-sized operation,' he says. They also aim to grow by exploiting another emerging young metropolitan taste with a range of vegetable juices.

Compared to fruit, vegetables are cheap, allowing them, they hope, to make this new line less expensive without compromising quality.

In the long term, they would like to see the juice business turn into something much bigger. Their intention is to build Innocent's brand values and use them to spin off a diverse range of products with a shared identity.

'At the moment Innocent is about smoothies, but it will be more than that in future,' says Balon.

Tomorrow's ambitions depend on shifting smoothies today, and not every imported American idea is guaranteed to be a success. With profit still a long way off, it is too early to say whether Innocent will become the next Seattle Coffee Company (sold to Starbucks for pounds 49 million in 1998) or just another Taco Bell-style transatlantic fad that flops. Whatever the eventual outcome, its three creators remain confident that they are on to a winner. 'This thing has definitely got legs,' says Balon.

US IMPORTS GEE, THESE ARE COOL

COCA-COLA - Cultural imperialism began here.

ROCK 'N' ROLL - Britpop v Elvis? No contest.

PCs - Where IBM led, others followed.

COFFEE BARS - Tall, skinny cinnamon latte to go. The revolution that made snobs of us all (and ordering a mouthful).

BEN & JERRY'S - Transatlantic did for Neapolitan.

MUFFINS - The new Chelsea bun.

THEME BARS - Cheers has a lot to answer for.

AEROBICS - First Fonda, then health clubs a go-go.

THANKS, BUT NO THANKS

AMERICAN FOOTBALL - Even C4 couldn't make it funky.

LIFEGUARDS - Fine on Baywatch, forget it in Bognor.

WINNEBAGOS - We'll keep the caravan, thanks.

IN-STORE GREETERS - My day? What's so nice about it?

GRITS - Meat, two veg and a bit of gravel - tasty.

NIGHTLY TALK SHOWS - Thrice weekly Wogan. Please.

COLONIC IRRIGATION - Oh no, you don't.

ROAD MOVIES - Not enough of a Carry On for us.

PET ROCKS - Stones are not an alternative for dog-lovers.

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