Adam Balon tells MoneyWeek how a 12 hour car ride with two friends led him to set up Innocent Smoothies. The trend for healthy eating has seen turnover soar to £75m last year.
Their hectic lifestyles in the City didn't give them enough time to lead healthy lifestyles, so, munching on junk food, "we asked ourselves what annoyed us most about life and how could we do something about it. And we thought, we should be eating better." So they came up with the idea for a healthy smoothie'.
After the holiday, they still thought their idea was a good one. So they drew up a business plan and pestered people for information,"as we knew absolutely nothing about fruit". Giving up good jobs meant getting it right, so they decided to get their idea vetted. At a Jazz Festival in London's Parsons Green in the summer of 1998, "we bought £500 of fruit which we used to sell smoothies at £1.80 each. Then we put up a big sign, which read: Do you think we should give up our jobs to make these smoothies?', and asked people to put their empty bottles in bins marked yes' and no'." The following Monday, with the yes box almost overflowing, "we said, right guys, we're doing this now!" and all promptly resigned.
However, they quickly realised that they knew less than they thought they did about setting up a business. It wasn't until May 1999 that they were up and running, by which time 20 bank branches had refused them funding, and they faced not being able to secure any financial backing. So "we emailed and contacted friends basically asking whether they knew anyone rich". That's how they met Maurice Pinto, an American businessman. "He spent an entire two hours asking us quite personal stuff, like how do you make decisions? He didn't even ask to see the business plan in the end. We came out of the meeting confused and asking was that good?'" It was. Pinto said, "I kind of get it", and gave them the £230,000 they needed.
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Seven years later, Innocent Smoothies has a 63% share of the market and is expecting to increase its turnover to £75m from £38m last year. How much of its success does Adam believe is based on the increased desire for healthy food? "The healthy eating trend has certainly helped the business," he admits. "The right kind of market, the one that wants natural, healthy, fresh food, is not going away. After the BSE crisis, people started paying attention to what they were eating, and it started to make an impact on our own horizons," he says.
Does it help to be small? "We had no cash, so we always knew we would be small. But that wasn't a problem, as we felt that people would trust the small guy more. There is that perception that the big conglomerates are not as trustworthy." As the company's success attests, it's certainly a policy that works.
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Jody studied at the University of Limerick and was a senior writer for MoneyWeek. Jody is experienced in interviewing, for example digging into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.
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