by Dan Matthews - Thursday, 6th September 2007

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Once a plucky start-up that punched above its weight, Innocent has ballooned into a drinks industry notable with £80m turnover, 200 London-based employees and an awards cabinet that’s full-to-bursting.

But the business has reached a crossroads: should it stick to its hippy roots or shoot for the moon?

Grass-covered vans and “Fruitstock” festivals will get you only so far, and smoothies are a serious business now. Innocent faces competition from Pepsi’s PJ Smoothies and supermarket own brands, and it must keep on its toes to challenge its rivals.

So Innocent has compromised – and then some. Conduct a straw poll of its most loyal customers and ask this question: what is your least favourite business? You wouldn’t bet against McDonald’s coming top of this list.

Yet Innocent, the purveyor of premium-quality, ethically-sourced smoothies is selling its drinks to kids through McDonald’s, the beacon of bargain-basement dining and “star” of anti-junk-food flick Super Size Me.

There have been controversial pairings in the past. Remember when McDonald’s bought a stake in Pret a Manger, L’Oréal snapped up the Body Shop and Cadbury swallowed Green & Blacks? But this one trumps the lot.

You only have to take a look at the blog on Innocent’s website to see the animosity it has generated. A naively plucky entry announcing the partnership on May 1 is followed with a rearguard action a day later by Innocent’s high-profile co-founder Richard Reed.

He asserts: “We should reiterate that this is what it is – a trial of our kids smoothies, in some McDonald’s branches, in one specific region of the UK. We haven’t sold our company to them.”

Meanwhile, McDonald’s’ PR department is milking the deal for all it’s worth. Press reports have quoted top brass saying the two businesses share “core values”, something Innocent denies.

Reed et al want the business but not the baggage. More sales are welcome, but co-branding is not.

Innocent’s MD, Jamie Mitchell, refuses to praise or condemn McDonald’s for its track record. It’s left some customers confused.

“Terrible idea,” reads one comment on the Innocent blog. “It really will have a massively negative impact on your brand – let’s face it, nobody will believe it’s about anything but money, nobody will buy that it’s about giving McDonald’s’ kids a healthier drink in their boxes of lard.”

Nasty, but not true. For one, this assessment assumes the bulk of Innocent’s customers will give it much thought, which, of course, they won’t. Most parents will be glad of the choice, which is Innocent’s stated motivation for the pairing.

Reed says he intends to contact every blogger who responded to the deal in a negative way, but he must not forget the overwhelming majority of customers who are comfortable with this deal and who don’t comment on Innocent’s web log.

He should stick to his guns. This is what businesses do, after all: they make deals and grow. Innocent has done well to maintain the values it held at launch, but it shouldn’t obsess about them.

If Innocent is to build on its eight-year winning streak, it must think more like a corporate, especially as it starts expanding overseas. That means shrugging off its kookier ideas and showing its teeth.

The McDonald’s deal is an indication that it’s heading in this direction. It’s newly re-branded fruit flavoured water, This Water, is more evidence: each 420ml bottle contains added sugar. Imagine that.

Tags: innocent, mcdonalds, start up, starting up, pret a manger, ethical business, smoothies, richard reed, social enterprise, entrepreneurs, starting a business, new business, innocent drinks, growing business, success stories,