Marketing smoothies: Milking it for all it's worth

Once upon a time there was a boy who lived in a house in Long Tongue Scrog Lane in a village called Houses Hill who, when he grew up, made lovely fruit drinks for everyone, earning lots of money, some of which he gave to good causes.

There is a fairy-tale otherworldliness to the Richard Reed story, which extends to his working environment at Innocent drinks, where the floors of an industrial estate warehouse in west London are carpeted with synthetic grass, even in the boardroom. At "Fruit Towers" the staff walk around in bare feet; the door is marked "People"; the window is signed "Burglars" and the goods entrance "Cows".

It seems like a dreamland, yet no other marketer in Britain has achieved so much so quickly as Reed. When Marketing Week recently compiled a list of Britain's 100 most influential marketers, he was ranked 10th (just above Charles Dunstone of Carphone Warehouse and Tim Mason of Tesco), but when it polled its readers they selected Reed as their number one. "I was people's choice, which makes me sound like a soap star - best newcomer to Coronation Street. That was great," he says. "The magazine went straight up to my parents' house in Long Tongue Scrog Lane."

Reed is one of the three co-founders of Innocent, which began just seven years ago with a few squeezed fruit drinks offered for sale in the fridge of an obscure west London delicatessen. It will turn over £80m this year. It is selling its fruit smoothies at a rate of 1.5 million a year and has already captured 60 per cent of the UK market.

The company has expanded this year into France and the Low Countries. It will advance into Scandinavia in the autumn and into Germany and Austria next year. Reed, who founded Innocent with his university friends Adam Balon and Jonathan Wright, already has half an eye on America.

He has ensured that Innocent underlines its brand values at every opportunity. A guilt-free message emanates from the saintly logo on every bottle and carton, from the synthetic daisies that spell out the Innocent name on the company vans. It is there in the childhood pictures of every one of the 100 staff members hanging above the office staircase, reinforcing a Peter Pan feel of a world free of grown-up nastiness, sharp business practices, pollution and junk food.

Reed has skilfully built this utopian brand but his task has been to do so while retaining a reputation for honesty, truth and simplicity. "We don't do things to try to get talked about. We are just trying to be ourselves and be completely transparent. Our rules are that you should either be prepared to talk about it or you shouldn't be doing it."

To that effect, Innocent gives away all its smoothie secrets in a recipe book for £12.99. Lately, however, the Innocent halo has slipped a little after criticisms from the British Dietetic Association that the smoothie industry was making too great claims for the health benefits of its products.

At the weekend in Regent's Park in London, Reed masterminded the biggest marketing event of the Innocent calendar, Fruitstock, a free annual festival that combines top-quality music and smoothie tasting with a vast farmers' market and stalls for such worthy causes as Friends of the Earth and Greenpeace. The event recalls Innocent's origins, when the founding trio set up a crushed fruit drinks stall at a music festival and asked customers to throw their empty cups into buckets marked "yes" and "no", depending on whether or not they thought they should give up their day jobs. "It's part of the DNA; it's how we got started," says Reed of Fruitstock. "We like to thank everybody who bought our drinks by putting on a party. It also helps us to represent who we are in a way you can't with a two-dimensional press ad."

Even though Reed and his cohorts have never been shy to play up the "innocence" of their early days, those original day jobs were all fairly high powered. Reed himself used to work for the prestigious BMP advertising agency, where his clients included Volkswagen, Sony and Eurotunnel. The others worked at consultants Bain and McKinsey and drinks company Virgin Cola. All three went to Cambridge University and they set up with the backing of venture capitalist Maurice Pinto. "I still think you are pretty naive at 26, no matter where you went to school," counters Reed. "We are incredibly ambitious and focused on trying to build a business that we can be proud of. We don't sit around all the time on bean bags."

Nevertheless, the laid-back image persists and, indeed, there are bean bags, along with hammocks and a barbecue, out on the decking in the Fruit Towers garden behind the office.

To the MySpace generation he surely looks like the perfect employer. Correspondence from customers, which can only be described as fan mail, decorates the walls of Fruit Towers. Reed has carefully cultivated this image of the caring employer and he says he is quite happy if rivals want to misinterpret that as meaning that Innocent staff are dippy day-dreamers. "A lot of people think we are soft. I'm comfortable with that. I want rivals to underestimate the talent of people who work at Fruit Towers. If people want to think we sit all day on bean bags hugging each other, I'm comfortable with that. But if anyone turns up thinking that's what the job is going to be they're coming to the wrong company. I want the hardest working, most ambitious but most responsible people out there."

As well as being head of marketing and PR, Reed is also the "people and environment director", which means he gets to hire the staff. He is not sentimental. "Ultimately any business is just a community of human beings. People who are lost or a bit confused and thinking it's going to be fun - they only make it to the first round," he says.

You might expect Reed to be a fan of Super Size Me, Morgan Spurlock's award-winning documentary attack on the spread of the McDonald's brand and the damaging effects of overindulging in its fast food. "It was not intelligent," is Reed's critique. "It was taking an easy pop at someone."

Although Innocent has thrived on its cottage industry reputation, Reed and his colleagues don't share the mistrust that surrounds large companies. "Society makes an assumption that big is bad but bad is bad and good is good. We don't want to be small. We want to be good. Some of the companies with the strongest ethos in the world are some of the biggest ones, although I'm not saying we would share that ethos."

Could there come a day when Innocent, like ethical chocolate brand Green & Black's (now part of Cadbury) and Body Shop (now owned by L'Oréal) could be swallowed up? "I don't think it's a likely end scenario for us. I would have thought a part float is more likely," says Reed. "Democratise out the whole company. Give the people that buy the drinks the chance to buy shares."

In the UK, Innocent's biggest rival is PJ Smoothies, which was bought by the giant PepsiCo group. Reed is noticeably careful not to run down other products but points out: "Our gap has widened over the past three or four years since they bought them. When Pepsi bought PJ's we were two times bigger than them and now we're 3.3 times bigger than them."

Innocent is developing its "smoothies for kids" range, with packaging that uses cartoon characters such as The Dude, Nature Girl and ED (Explorer Dude) to convey brand values to young consumers. (Dude, by the way, is a favourite word in the Reed vocabulary.) He has also built a strong relationship with Jamie Oliver. (Innocent was the only brand featured in Oliver's Feed Me Better healthy eating campaign and will also sponsor his follow-up to Jamie's School Dinners on Channel 4 later this year.) New government regulations limiting drinks in school to water, fruits and milk present a big opportunity to the company.

Despite Reed's background in advertising he has an odd relationship with his former trade. "We've always struggled with advertising because we don't want it to be an advert. We just basically want it to be us and to tell people what we are about and let them decide if they want us or not, rather than create some incredible crazy dancing monkey that everyone falls in love with."

The first ad that Innocent commissioned - from HHCL - featured members of staff talking about the company in front of their mums. "We took one look at it and said 'That has got nothing to do with us'," says Reed, who devised a simpler alternative commercial with his colleagues. "We wrote it ourselves, made it ourselves down the park on a Saturday morning. It couldn't have been more home-made if we'd tried."

The second campaign, made by Lowe London and showing how to make an Innocent smoothie, has just broken. "We had this funny relationship with the agency," says Reed. "We'd go to the agency and do some work and present it to the creative director who would then come up with his favourites and present it to the client who happened to be us. It was a crazy process but for us it was the only way that made sense."

Innocent has been using the internet to broaden its message, communicating company news to its client base ("we've effectively been running a blog for six or seven years") and direct marketing to a core client base known as the "Innocent family". "In straight parlance it's a direct marketing tool but we see it as a way of having conversations with people, finding what they want and sending them a little treat."

A few weeks ago, Reed went away for a break with his two friends to discuss the future of their business. "We agreed we are more challenged and excited than we've ever been before and we all signed up for another four years to 2010," he says. "As close friends we have to keep communicating and letting the others know where we are, so there are no nasty surprises. For the next four years we are as committed to Innocent as we've been in the past seven. No one's getting tired." Right on, dudes.