Richard Reed on Innocent Drinks working with Coca-Cola [Video]
Richard Reed explains his controversial decision to work with Coca-Cola and McDonalds.
Speaking in 2011 at Innocent Drinks headquarters, Innocent co-founder Richard Reed is quick to defend the company’s decisions to work with Coca-Cola and McDonalds; the former for investment and the latter in a product partnership. Skip forward three years and Innocent have now sold almost all of their remaining shares to Coca-Cola for an estimated £100m, but despite “controversy from the press” Reed believes both deals were “the right call” and asserts that Coca Cola are “good guys to work with”.
Discussing its partnership with McDonalds, Reed explains how it was an “absolute no brainer” as it fitted in with the smoothie brand’s goal to get children eating more fruit:
“Here’s an opportunity to get a portion of fruit into a kid’s Happy Meal rather than them having something else. That is nutritionally positive.”
With regards to Coca-Cola, Reed explains it was more of a “material partnership” as Innocent were looking for funds to expand the business in Europe. After meeting with lots of potential investors, Reed says that “off the bat Coca-Cola were the most honest, straightforward and smart and [he and founders Balon and Wright] responded well to them as people”.
Making it clear that you do business “with the people, not the logo”, Reed explains that the Innocent team chose to go with Coca-Cola as they could really help them to “accelerate” by introducing them to European customers, getting plastic bottles cheaper etc.
Coca-Cola’s terms for the investment, that they would have no operational decision making power whatsoever, also made the deal attractive. It was this “hands-off relationship” that made Innocent “comfortable” given that the conditions that other potential investors were asking for, such as making Innocent stop donating money to charity and having full control, were not “up for grabs”.
In terms of ethics, Reed argues “How are Coca-Cola not an ethical company?” Reed explains how Innocent did a lot due diligence on the drinks giant and found them to be a “business stuffed with lots of ordinary people”.
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Reed says: “Of course they [Coca-Cola] will have made some mistakes in the past from time to time but they’ve got a pretty good track record of making good on it and learning and moving on. I’ve met the people behind the media image, the people that are running the business.”