An area where Innocent is pressurising suppliers is in converting to green electricity. It has also worked with its UK bottle manufacturer to increase the percentage of recycled plastic in its containers, which now stands at 50%. A target of 100% is “totally achievable”, Reed says. While companies such as Tesco talk tough on climate change, Innocent is leading the way in calculating its carbon footprint. It has commissioned two comprehensive life-cycle “carbon audits” for all of its 24 recipes, from the Edinburgh Centre for Climate Management and the Carbon Trust. The studies even factor in the emissions associated with keeping a carton in a domestic fridge.
The Ethical and Social Policies and Practices As the basic idea of the business is to help people living a more healthy life, it was said that now Innocent Drinks is more of a cult than a brand. Innocent have laid down a model for ethical and social responsible business. From the first day, the company has used only natural ingredients, run all operations on green electricity and committed 10% of profits to charity. Their ethical business philosophy can be seen from many aspects of their business practices, and following we are going to take some examples.
The Business Itself – Insisting Making Healthy Drinks Where Innocent founders are most content with the company’s performance is in making products that are natural and nutritional, the idea of marking such drinks is a rarity among food manufacturers. Healthy eating comes at a cost. A one litre carton of Innocent smoothie on the shelves has a high price of ï¿½3.29. But the company’s managers insist this is a small price to pay, saying: “People in the future are going to think we were crazy to stuff a load of chemicals down our gullets, just to save, what? The difference between a natural food and a processed equivalent on an average item is going to be 20p to 30p.”
Higher costs come from premiums Innocent pays for certified products, such as bananas meeting the Rainforest Alliance’s sustainability standards. Innocent bans airfreighted fruit, and pays further premiums for local produce – but only if it makes commercial sense. For example, the company buys apples from Germany because they are half the price of home grown UK equivalents (250 per tonne instead of 500).
Given these numbers, saving food miles was not an option, says Reed. “I couldn’t justify that. When you’re talking about 100% difference for the same apple juice – we’re getting it from Germany.” Despite the brand’s cuddly exterior, Innocent’s founders remain commercially realistic. And they are not afraid to use buyer power to make suppliers change their ways. The ethical business ideas of build a fair world and sign importance to human needs were embraced in the business’s culture and hence their management practices.
In their office in Fruit Towers, fans’ mails cover the walls. Their consumers are welcomed to pop by to the company, and each visitor is offered smoothies from a fridge with the question, ‘Are you a committed drinker?’; and denim-clad executives meet in rooms where glass fronts bear the words, ‘blah, blah, blah…’6 The approach is unconventional. But it gets results. In eight years Innocent has grown from nothing to sales of ï¿½80 million in 2006, selling one million smoothies every week. Even more surprising, it has done so in a way that puts other food and drink manufacturers to shame.
EVALUATION OF CURRENT ENVIRONMENTAL AND ETHICAL/SOCIAL POLICIES
Innocent Drinks has been regarded as model of ethical business. Their strategies in concerning of ethical business can be concluded in – firstly, make 100% natural products that are 100% good for people. Secondly, procure ingredients ethically. And thirdly, use ecologically sound packaging materials. Fourthly, reduce and offset carbon emissions across entire business system. Fifthly, lead by example at Fruit Towers by doing good things. And finally, give 10% of their profits each year to charities in the countries where their fruit comes from7. These practices internally cultivate a good corporate culture that encourages employees’ involvement and characteristics such as loyalty, honesty, integrity, etc.
Externally, for the benefits of the company, such practices help to build and reinforce their brand image. And in concerning of business’s ethical/social responsibilities, they helped to build a better world. For example, the green marketing promotion practices such as 7 ways to have a better 2007, are in consist with the notion of two stages green consumerism, and help to make consumers becomes more of a green conserver. Further more, their active role in social responsible activities, such as establish of innocent fund, also benefit the corporate as help to reinforce their brand personality.
“We get badged as being an ethical business; it’s not a badge we put on ourselves. I know where that comes from and it’s great people think of us in that way. But we’re a thousand miles off being as good as we want to be.” – Richard Reed As almost the best and purest smoothies in UK market, Innocent does not use organic or locally sourced ingredients. Their argument is that it would raise the price of their drinks, and will finally result in push them out of their current market. While it is a good reason to maintain the business’s sustainability, this practice is not consist with their philosophy that get more people drinking pure and healthy fruit juice than to only get the ‘well-off’ drinking organic, pure and healthy fruit juice. We’re sure they were thinking about the health of our bodies as well as the health of their profit margin! What Innocent did instead was to set up the Innocent Foundation which supports charities specifically in the countries where they source their ingredients.
For example in Brazil they are working with Iracambi to promote conservation of Atlantic Rainforest. In Uganda they are working with KIDA to educate, train and fund local communities in a bee-keeping project so they can earn an income from the honey. In India they are working with Find Your Feet on agricultural initiatives for women. These projects seem like a productive way of putting something sustainable back in to the communities which are working to supply your business. It is also interesting that while their juices are very healthy, but don’t seem very environmentally friendly, behind the scenes most of the projects they are involved in are in fact environmentally based. The question is does the environmental impact of their food miles outweigh their other sustainable initiatives?
Further more, Innocent now uses 25% recycled plastic in their bottles which is claimed to be ‘the most technology will allow’, but they are working towards a 100%. They also have a ‘how to recycle our products’ page on their website. And while they might not use local ingredients it doesn’t mean that they don’t like them. Innocent are now sponsoring local fruit and vegetable competitions around the country. Furthermore the company car is electric and they buy their energy from Good Energy. Innocent is renowned for its excellent business model, and their great working environment, as well a being rather witty marketers. We think they should also be well known for finding interesting ways to be sustainable whilst running a successful business, although we still think that they might be able to introduce an organic Innocent range just for the extra fussy among us!
Although the co-founder of Innocent, Richard Reed, claims there still is thousands miles far away from the ethical business in their mind, the company has already been regarded as the best practice in industry. From this case we can see that although many managers see the trend of green business as a ‘threat’ or ‘disadvantages’, for example, it involves higher cost, more complex operation and management process, there are actually many opportunities generated from this new change of whole business world. It is time for managers to change – while the most prior goal is maximum stakeholders’ benefits and profits, they should consider to achieve this goal in ‘green’ and ethical way.