n less than 10 years, Innocent has built a £110m-sales brand, with a superb reputation as an innovator and trendsetter. Other companies have envied and emulated the quirky pack notes and website, funky outdoor events and Bananaphone hotline that have helped it create a smoothie market almost single-handedly, and just about every aspect of its business has come in for praise.

Sales of its smoothies are still soaring - up 90% year-on-year [Nielsen, 52 w/e weeks 31 March 2007] - and the brand ranks number 10 among UK soft drinks.

A recent decision to sell its smoothies in McDonald's met with a mixed response. And Innocent's recent decision to create a separate stable of water-based drinks without Innocent branding has bemused the industry. Bottled water is rising at more than 11% year-on-year and is about six times the size of the smoothie market, while functional drinks are booming. The opportunities are obvious. But why has Innocent chosen to give up its brand equity?

The company made its move into water with a fruit-based drink called Juicy Water in 2003 under the banner of the Innocent brand. In February this year it decided it was time to take it solo. The idea was to create a platform for water-based drinks that could play host to functional products and recipes with added vitamins and botanicals. The link with the Innocent pedigree was to be played down, hinted at only by a small on-pack device saying 'from the people at Innocent' - and even this will be phased out.

Experts are puzzled. "It is entering a very competitive marketplace and taking away its strongest strategy to differentiate the product," warns Claire Nuttall, partner and client director at Dragon brand consultants. The new name also has limitations, she believes. "This Water focuses on water as the lead benefit. It doesn't focus on the fruit; this is left to the back of the pack. Juicy Water did that far better. Nothing differentiates the products now and the message doesn't come across."

Rune Gustafson, CEO of Interbrand adds: "You've got to ask yourself why water-based drinks didn't work for Innocent first time around. It must have unearthed some truths about the brand. I'd guess it saw possible confusion arising between a fruit-flavoured water with some added sugar and its fruit-based, natural heritage."

Even Innocent's most loyal fans are unconvinced by the name and branding. "It sounds wishy-washy," says one contribution to the online forum. "It implies no fruit, but does contain fruit," reads a second, while another dismisses the name as "pseudy and marketing-ish".

Simon Dunn, managing director of brand consultancy Product Chain, describes the move as "lunacy". "When Innocent started out, they had few competitors - but to challenge the big water brands when the likes of Coca-Cola are looking to buy? I can't understand the reasoning. Diversification is dangerous when you are a highly focused business. Water is sophisticated - completely different from smoothies. It means Innocent will take its eye off the ball."

However, Douglas Lamont, head of new opportunities at Innocent, says the company is once again striving to define a new category. "We're not interested in plain water. We're interested in great-tasting refreshment with functional benefits. We've worked hard to help people understand the difference between juices and smoothies and if we put the water-based drinks under the Innocent brand, we'd confuse consumers."

The other issue with Juicy Water was that, as a sub-brand, it played second fiddle, says Lamont. "Juicy Water was more of a sideline and without a big marketing effort."

The company has now put a significant spend behind This Water. And from the start of next year, it will add new lines. "There is a massive opportunity to grow this part of the business," says Lamont.

So has it worked? The multiples have so far treated This Water with caution. While there are four variants, the multiples do not stock the entire range. But latest Nielsen data for the four weeks to the midJune show a rise of 39% compared with the same four-week period last year as Juicy Water. And sales are up 17% year-on-year.

Interbrand's Gustafson warns that effort and commitment will be the key to This Water's success. "Innocent was not the first brand in smoothies but did offer a point of difference. It remains to be seen if it has done the same here."things innocent has done well

Smoothies Innocent is far and away the UK's biggest smoothie brand. Sales keep soaring: up 90% year-on-year



Product innovation New recipes every month and new formats every year have kept it in public eye



Events Innocent's Fruitstock in Regent's Park pulled in more than 100,000 people. This year a giant farmers market is planned

The environment The HQ is powered from electricity from green sources, it has a no air freight policy and uses alternative fuels in its fleet. It flags up its carbon footprint on its website



Marketing Knitted hats and quirky campaigns have cemented the fun-loving image



Employment Innocent is regularly hailed as one of the best places to work in the UK

Packaging Rewrote the rule book, listing ingredients, serving suggestions and nutritional information with jokes and witty asides. Now everyone's doing it. It is trialling a bottle made entirely from a 100%-renewable source



Distribution A role model for grocery entrepreneurs, Innocent used alternative channels to build sales before targeting the supermarkets

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