Innocent Drinks founder Richard Reed on working out what you’re good at [Video]
Richard Reed explains the importance of working out which areas of your company are best left in the control of others.
When it comes to business plans, Richard Reed, co-founder of healthy drinks empire Innocent Drinks, believes the best strategy is to work out what you’re good at and where the real value is and leave the rest to others who can do it better than you.
Discussing what Innocent is good at, Reed explains that the Innocent team buy all the fruit themselves and develop all the recipes themselves so that they can “guarantee that anything that’s in an Innocent bottle is unique to Innocent and is the best quality”. However when it comes to manufacturing and distribution of its products, Innocent has taken a step back. Rather than spending “millions of pounds to build a factory”, the drinks company uses another manufacturing site because Reed argues “it’s not the factory that makes the fruit better quality, it’s the fruit in the first place”.
The healthy smoothie brand has also benefitted from outsourcing its distribution because, as Reed simply puts “we’re terrible at driving vans”. Why haven’t Innocent owned and controlled these aspects of their business?
“There are real bits where you’ll add value as you’re good at it and there’s bits where you’re going to be bad and will destroy value. We’ve benefitted usually from owning the bit where the value’s created and outsourcing the bit where the capital is tied up but doesn’t add much value to the whole project.”
The smoothie entrepreneur also believes that businesses should always remain focused on the consumer-facing side, using Innocent’s growth as case in point: “for us it’s absolutely about owning the relationship between the farmers and the retailers. It’s very much about investing in consumer and retail facing stuff.”