Can Innocent rattle Alpro with its dairy-free launch?

Alpro’s dominance of the dairy alternatives drinks market faces a major challenge from an unlikely source. Smoothies giant Innocent last week revealed it would be rolling out a trio of nut and oat ‘milks’ in a move to tap the plant-based trend. 

With an rsp of £1.99 for 750ml, the new drinks will be more costly than Alpro - its almond variant retails at £1.79 per litre for example - and contains far fewer ingredients: no more than three, the brand noted last week, with no stabilisers like those found in Alpro products. With this tacit criticism of its new rival, Innocent kicked off a major battle for space in soft drinks chillers.

So, how much of a threat to Danone’s Alpro will it be? And will the free-from category benefit from the entry of Innocent, part of the Coca-Cola empire?

Alpro seems nonplussed by Innocent’s move. “It’s unsurprising that other brands are looking to capitalise on the growth of plant-based,” says Sue Garfitt, vice president of customer development at Alpro. “More than half of people are looking to increase their plant-based consumption in the year ahead, and there is clearly headroom for growth to encourage even more people to put plants first.”

Big bunfight

Nevertheless, former Alpro marketing director Chris Collis expects a “robust” response, “Historically, it’s responded quite strongly to competitors coming into its market, both in terms of in-store promotions and marketing spend.” Take, for example, the case of Rice Dream, which in 2012 found itself up against Alpro’s heavily promoted rice variant. There’s going to be “a big bunfight with plenty of promotional activity” Collis predicts. “The mults will love that of course because they’ll make lots of profit and it’ll drive category penetration.”

There’s a chance for Innocent to drive market growth, he says, but that will be dependent, at least in part, on where the new drinks are merchandised. “If they’re alongside the rest of the Innocent range, they’ll almost certainly cannibalise juices and smoothies.” But in the dairy aisle, the trusted Innocent name will appeal to new drinkers.

Last week’s launch was “a logical extension” to Innocent’s portfolio, believes Richard Hall, chairman of Zenith Global. “Innocent has most relevance in premium quality products that are natural and healthy. Coca-Cola is actively exploring the dairy opportunity. The plant-based market is expanding and becoming increasingly mainstream.”

The dairy alternatives market can only benefit from Innocent’s launch, Hall adds. “The entry of another major player must be presumed to accelerate the growth prospects of the overall category.”

Indeed, this is just the latest instance this year of Coca-Cola’s diversification from fizzy pop. In January, it brought Latin American brand Adez back to the UK as a three-strong range of vegan smoothies.

Taking charge

But for Karen Green, interim commercial director at The Food Mentor consultancy, Innocent’s free-from drinks are an example of owner Coca-Cola using the brand to “take charge of categories tested and created by someone else - in this case, Alpro”.

The move is a repeat of 2010, when Innocent first added juices, she says, which “was seen to be a bit ‘me too’ but clearly was a good way to grow the brand by taking it into an adjacent category”.

Last year, Innocent saw its standard portfolio surge 10.6% in value sales to £199.2m while its Kids sub-brand added 8% to £32.8m [Nielsen 52 w/e 9 December 2017]. The brand has successfully tapped growing demand for drinks with functional benefits - and Brits “are willing to pay more for that extra boost to their health” MD Nick Canney told The Grocer earlier this year.

Nevertheless, Innocent “isn’t what it was” insists Dr Aaron Ferguson, technical director of The Ingredients Consultancy, which worked with Innocent in its earliest years. He questions the brand’s premium pricing for its new range.

While Alpro is “an established brand at a good price”, Innocent’s products “aren’t going to be good enough” to merit an rsp equivalent to £2.65 a litre - 48% higher than Alpro, he says. While there is room for both brands, Ferguson says, Innocent isn’t a threat to Alpro, which will continue to be number one. Coca-Cola’s smoothies brand used to be “trailblazers” but is now “just sheep” he adds. “There’s nothing novel about what they’re doing.”

There are consumers ready to be drawn by Innocent to the dairy alternatives category, Ferguson believes. But pricing is key. “I don’t see it as a game-changer for the brand unless it can enter with a price structure where it competes like-for-like with Alpro.”