London-based smoothie company Innocent Drinks plans to cheat the come-uppance that awaits firms that stray too far from their roots. Founded in 1998, Innocent made sales of £17 million last year and is on track to make £30 million this year (US$ 31M, 54M).

Just how important it is for up-and-coming brands to crack "opinion leader" stores becomes clear within minutes of talking to the three entrepreneurs (of Innocent, Tyrrells and Hill Station) interviewed for this feature. Among the very first customers of all three brands were Harrods and Harvey Nichols. Other prestigious clients include Fortnum & Mason, Selfridges and Villandry. As Reed puts it: "There's definitely an association from being seen in the right places."

Delicatessens and up-market independent retailers have also been vital in building the brands' reputations, and in creating a fan base of loyal customers from which to expand. For Innocent Drinks, cultivating the independents, which make up 40 percent of its distribution, has meant talking regularly to shopkeepers and making sure that they feel loved at "Fruitstock," Innocent's annual festival in Regent's Park. Says Reed: "It's important to develop a personal relationship with stockists rather than dealing solely through wholesalers."

William Chase, founder of Tyrrells, has made up-market independents the cornerstone of his brand. "Don't worry about the end-user," he says. "It's the independent retailers whom you need to inspire with passion, because they are the ones who recommend you."

Crucial though word-of-mouth may be in getting an unknown brand noticed, most firms reach a point when they feel the time has come to add advertising to the mix. But can this be done without ending the magic that belongs to a brand that has won friends without overt marketing?

One possibility is to do what Innocent did and to produce something in-house that draws upon the brand's own culture. The problem here is that while a homemade approach may suit the folksiness of an offbeat maverick such as Innocent, applied to most brands it would merely look amateur. Another option (one which Hill Station plans to use) is to advertise in carefully chosen magazines and style supplements. This cuts the risk of being seen to go mass market and offers greater scope to showcase the things that are already working for the brand, such as its ingredients and packaging.

Starting to advertise is just one of the many rites of passage that brands must navigate on the road to maturity, however. Equally fraught is the decision over if, or when, to sell through supermarkets. On the upside supermarkets open the door to national distribution and the chance to benefit from in-store promotion and product sampling. The downside is the damage that can be inflicted on brand value by price-cutting offers, or being seen to share shelf-space with "cheesy wotsits."

Ultimately, it is a choice that boils down to an old-fashioned trade-off between costs and benefit. If a brand's top concern is to preserve its cult cachet then the answer is probably to forego market share in return for higher margin and a more distinctive positioning. This broadly is the strategy taken by Tyrrells, which last year rebuffed Sainsbury's offer to put the brand in all its stores. "It's not our aim to be the world's largest chip-maker," says Chase. Nor is it his aim to stay small. Instead Chase has begun exporting to fine-food stores elsewhere in Europe and plans to introduce new products, such as muesli bars and dips, to his existing stockists.

A niche positioning is not for everyone, however. Innocent has no qualms about being stocked by supermarkets and, in fact, welcomes the opportunity that being widely available creates for "democratizing" its healthy products. Hill Station's Gina Hall knows the dangers of over-exposure, but reckons that to take on the likes of Ben & Jerry's and Häagen-Dazs, the brand has to have a base in the supermarkets. "People really enjoy that feeling of discovery, of finding something that's not ubiquitous." But, she adds, "You have to be in the places where people are buying."

So where do the brands go from here? For Hall the number one priority is to get more people "to discover" Hill Station, while guarding its gourmet positioning. "We have to keep surprising people but maintain the quality." To accomplish this, Hall says, the brand will stick to its "au naturel" formulation, while introducing "unusual" flavors to add interest to the range.

Having hired a PR agency, Hall also has plans to develop the Hill Station story. This includes "personalizing" the brand by putting herself and her husband upfront on the packaging, and building on the idea of Hill Station, as a brand for people with a "spirit of adventure." As an opening sally the company is running promotions around "gap years for adults."

Building a brand story is also high on the agenda of Tyrrells, which boasts the distinction of sourcing all its potatoes from Chase's family farm. But what of Innocent, which, with its whimsical packaging, DIY advertising and "Banana Phone" for customers to call when they feel like a chat, is already well on the way to celebrity? Well, more of the same really, just bigger and better. As Reed puts it: "It's about becoming more Innocent."    

[20-Jun-2005]