Innocent has been getting plenty of stick today after announcing that it’s flogging a £30m stake (of between 10% and 20%) to drinks giant Coca-Cola, to fund a push into Europe. Coke is not exactly regarded as a model of ethical corporate behaviour – so the detractors argue that Innocent, which has always made great play of its cuddly credentials, is failing to practice what it preaches. But at a time when everyone in UK plc is feeling the pinch, should we really criticise one of the country's most successful entrepreneurial businesses for seeking the support of a larger partner?
Admittedly the two companies don’t look like natural bedfellows. Whereas Innocent gives 10% of its profits to charity and boasts of its healthy, ethically-sourced products, Coca-Cola has long been criticised for its treatment of workers, damage to the environment, and contribution to obesity. But Innocent says that it needs help to expand in Europe – not only will Coke’s £30m buy a few copywriters who can produce matey, homespun packaging notes in Bulgarian, but its vast production and distribution experience in the region will presumably come in handy too.
This kind of criticism won’t be entirely alien to Innocent: it came under fire a couple of years ago for agreeing a deal with McDonalds to include their smoothies in Happy Meals (though why it should be a bad thing for encouraging fat kids to drink more fruit smoothies rather than fizzy pop was always beyond us). And this kind of flak was always likely, given the reaction when other supposedly ‘anti-corporate’ businesses have ‘sold their soul’ – think Pret a Manger’s deal with McDonalds, Green & Black’s takeover by Cadbury, and the Body Shop’s sale to L’Oreal.
However, entrepreneurs have to exit somehow (although Innocent’s three co-founders insist they’re not looking to get out any time soon). Plus times are tough for consumer businesses: if taking Coke as a 'silent' partner helps Innocent not only survive the downturn but also expand its footprint, it could end up with a much bigger platform to put its eco-friendly message across. ‘And in some small ways we may be able to influence their thinking too,’ Innocent co-founder Richard Reed said of its new partner yesterday. You have to admire that kind of optimism...
In today's bulletin:
Soaring unemployment creates Election headache
Turbulence ahead for BA over pay and rations
Pound store looking up thanks to Cheryl Cole's bikini
Innocent not guilty after Coke deal
Chancellor for the day: the LSE's Howard Davies