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Simply Nectar md warns against ‘burning money’ to chase Innocent dreams

Zoom in font  Zoom out font Published: 2012-05-30  Origin: beveragedaily  Authour: Bouckley
Core Tip: UK premium nectar juice brand Simply Nectar has warned small firms about the danger of ‘burning investors’ money’ to score big retail contracts in an effort to become the next Innocent Drinks.
Director Jeremy Jaffé told BeverageDaily.com that Simply Nectar had seen notable success on a smaller level, with turnover at around ₤2m (sales up 25% in the year to May 1), current talks with the Hyatt Regency hotel group in the UK to stock the firm’s drinks, and interest from the Middle East.


While he said Simply Nectar wouldn’t necessarily be averse to selling through the multiples in future, Jaffé warned against the risks some small firms fell into of investing too heavily in machinery and facilities to service large-scale retail contracts that they then risked losing.

Burning investors’ money

There was also the risk of jeopardising the business as a whole due to undue reliance on one large contract, Jaffé agreed, as well as margin pressure. Simply Nectar principally supplies high-end UK delis and restaurants, where the margins are better.

Jaffé said: “Some guys go absolutely crazy – burning investors’ money trying to chase that [Innocent inspired] dream. Losing money year after year, and it seems like such a struggle.”

Simply Nectar (part of the wider organic food firm What on Earth!) is produced at a facility near Marseille, France, and Jaffé said that around 20 palettes of nectar per month was bottled there.

The company currently mainly sells its drinks (pictured below: comprising fruit, water, lemon- and grape juice) in the UK, with 250ml and 750ml bottles available. “We used to do a 330ml bottle but that was too big for people – it wasn’t gluggable,” Jaffé said.

Following a rebranding exercise in 2010, Simply Nectar sales shot up, and Jaffé emphasised the importance of branding to a business, especially given doubts in some quarters over the wisdom of Kraft’s new name for its global snacks business.

Mondelez, pronounced ‘Mohn-de-leez’, apparently can recall the words ‘manda’ and ‘liz’ to Russian ears – where the former refers to a particular part of the female anatomy, and the latter is a verb meaning ‘to lick’.

Kraft CEO Irene Rosenfeld said last Wednesday: "Mondelez has an appealing international sound that perfectly evokes the idea of a 'delicious world.'  That's the essence of our global snacks company.”

Kraft’s ‘naughty nickname’

But one Russian industry source told BeverageDaily.com: ““It’s not the best name for a company that wants to promote itself in Russia, as it obviously it may be made fun of, as depending on the pronunciation this name can be twisted, and the naughty nickname could stick to it.”

Jaffé said of ‘Mondelez’: “You can imagine how many people sat in offices around the world discussing that for many months. Unfortunately we don’t have the money or the time to do that.”

“Branding is very important to a business. We inherited the name ‘Simply Nectar’ when we took over that business, but we needed the look of the bottle to reflect how we felt about the taste of the juice – for me it evoked holidays in the South of France.”

“The first purchase is 90% visual – you get the consumer in there by telling them a story about the brand, then you get them back by actually having a nice product inside.”

 
 
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