Orange juice crisis to drive up smoothie prices, says Innocent
A CRISIS in orange juice production is to drive up the cost of smoothies for millions of British shoppers, the boss of Innocent has warned.
Nick Canney, the drinks maker’s chief executive, warned that drought, disease and extreme weather are squeezing companies that use the juice as a key ingredient – with higher costs in the shops an inevitable result. Disruption has particularly hit Brazil – the world’s largest producer – and Florida.
Mr Canney said: “Over time, it will definitely move prices forward again. You have to try and work out how to keep it affordable for people. Genuinely, we’re not profiteering from it at all. We’re just trying to work out how to price it in the right way. Orange within the category [of food and drink] we’re in is 40 per cent of the business. You can’t not have orange juice.
“Prices will feed through, and you know, what will happen is you’ll obviously, whether it’s through promotions, or pack sizes, or pricing, ultimately there will need to be changes ahead. Anyone who’s supplying or manufacturing orange juice will be under the same pressures as us.”
He said Innocent was yet to make any decisions about products’ future prices.
Some drinks makers have been forced to seek alternatives to orange juice. A spokesman for the British Soft Drinks Association called it “an unprecedented situation”.
They added: “Producers are trying to find efficiencies to help absorb and avoid passing significant price rises onto consumers but inevitably there has been some inflation on the product due to the chronic difficulties around obtaining oranges for juicing.”
Writing in The Grocer magazine earlier this year, Sarah Baldwin, the chief executive of Purity Soft Drinks, said: “The situation is now such that few in the market will be able to continue to absorb any more costs, and many will be left with no choice but to pass them on to consumers.”
It comes after a difficult couple of years for Innocent. The company posted operating losses of £41.3 million in 2022 as it grappled with falling sales, soaring costs and delays at a new £200 million eco-factory in Rotterdam. In accounts for that financial year, Innocent called it “perhaps one of the most challenging years for the business”.
Innocent has since enacted a shake-up of its board, with its managing director and chief operating officer both leaving. A handful of new directors were parachuted in this year, in a move that Innocent has claimed would help it “refocus on its founding purpose”.
Mr Canney said: “We’ve been round the loop recently with all the challenges we’ve had. And we’ve said, ‘right, what’s the purpose of Innocent?’.”
He insisted the company’s 2023 results, which are yet to be published, would show a “huge turnaround”. Innocent was founded in 1999 by Richard Reed, Adam Balon and Jon Wright, a trio of Cambridge students who sold smoothies at music festivals. It struck a chord with shoppers thanks to quirky marketing and a focus on ethics and sustainability, growing steadily in the decade that followed.
These days it is one of the most recognisable soft drinks brands found on supermarket shelves.