ICMR Case Collection

ICFAI Center for Management Research

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Grove Fresh Ltd –
Marketing Organic Juices
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MKTG128

This case was written by Sachin Govind, under the direction of S S George, The ICFAI Center for
Management Research (ICMR). It was compiled from published sources, and is intended to be used as a
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basis for class discussion rather than to illustrate either effective or ineffective handling of a management
situation.

 2006, The ICFAI Center for Management Research. All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means- -
electronic or mechanical, without permission.

To order copies, call +91-40-2343-0462/63 or write to ICFAI Center for Management Research, Plot # 49,
Nagarjuna Hills, Hyderabad 500 082, India or email icmr@icfai.org. Website: www.icmrindia.org
 MKTG/128

Grove Fresh Ltd – Marketing Organic Juices

“Many companies have already stopped producing organic grapefruit juice, because there is not
enough supply. The same thing is happening now with orange juice,”1
– Amarjit Sahota, Director, Organic Monitor2 in 2005.
“The British and French organic juice markets are to show the lowest growth rates. The organic
juices market in these countries showed very high growth in the late 1990s and market expansion
has slowed due to consumer demand stabilising. Retail penetration is reaching saturation in these
countries with most food retailers offering organic juices.”3

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– A research publication analyzing the future prospects for organic juices in the UK in 2002.

INTRODUCTION op
In April 2005, Grove Fresh Ltd. (GFL) was ranked 68th in the Fast Track4 2005 Profit Track 100.
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The rankings, published in The Sunday Times, were based on profit growth over a three year
period ending 2003. GFL’s profits rose from £ 0.9 million in 2000 to £ 3.2 million in 2003; the
company registered a 52 % year-on-year growth in its profits in 2003. The company was also
admired for its high-quality products and innovative marketing.
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However, the situation, as of 2006, is quite different. Competition in the UK organic juices market
has become severe. Though GFL posted healthy sales growth, the market for organic juice,
especially in the UK, was expanding at a much slower rate. This was expected to affect sales in the
near future. Besides, GFL has also been facing supply shortages.
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BACKGROUND

Grove Fresh Limited (GFL) was founded by John Taylor (Taylor) in 1994 to market chilled
organic fruit and vegetable juices. Prior to his foray into the organic juices market, Taylor owned a
successful bakery business, Freshbake Foods, which he sold to Borthwicks, a food and drink
flavoring supplier for several million pounds. However, Borthwicks soon faced financial problems.
Taylor re-purchased his business from Borthwicks for a token payment of £1. He brought the
company back to profitability and subsequently sold it to Campbell Soup Company5 in 1988 for
about £ 100 million.

1
“Organic marketing stunted by undersupply, says consultancy firm,” www.nutraingredients-usa.com, December 19,
2005.
2
Organic Monitor, established in 2001, provides business information on the global markets for organic goods.
3
“The European Market for Organic Juices,” October 2002, www.organicmonitor.com.
4
Fast track Profit Track 100 ranks Britain’s fastest-growing medium-sized companies by profit growth over their last
three years.
5
Campbell Soup Company was founded by Joseph Campbell in 1869 in New Jersey. In 2005, the company posted
sales worth US$ 7 billion. Campbell’s products, which are sold in 120 countries around the globe, include soups,
confectionery, pasta, sauces, and prepared food products.

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 Grove Fresh Ltd – Marketing Organic Juices

After selling off his bakery business, Taylor was living a life of semi-retirement in Florida, in a
house surrounded by orchards. Possibly inspired by his surroundings, he decided to enter the then
nascent market for organically grown fruit juices. Aiming to bring a wide assortment of high-
quality organic fruit juices to the UK, he established GFL with its headquarters in Surrey, UK in
1994. Taylor spent his first two years in the business convincing orchard owners and growers in
Florida to shift to organic farming and building the supply chain through to the UK. In 1996, GFL
became the first company to market organic juices in the UK.
In 1998, GFL acquired the Germany-based FSP Frische and its French subsidiary Fraicheur for a
sum of £ 1.3 million. With this acquisition, the company entered the European non-organic fruit
juice market as well. The company further strengthened its position in the non-organic fruit juice
market by acquiring Fruity King, a Dutch company, in 2000. Subsequently, Taylor retired but he
continued to own United Foods International (UFI), the holding company of GFL, Frische and
Fruity King, through a trust registered in the Isle of Man. The acquisitions, together with
increasing sales and profits due to a marked increase in the demand for organic products in the
UK, pushed UFI to the 3rd rank in the 2001 Fast Track 100, a ranking of British businesses with the
highest sales growth. The company had achieved a sales growth of 185% with total sales reaching

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£ 18 million in 2000. In the 2000s, GFL’s sales continued their healthy growth (Refer Exhibit I

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for sales turnover of GFL). However, by then, organic juices constituted only 10 percent of
UFI’s sales. This was because with its acquisitions in continental Europe, the company’s sales of
non-organic juices were growing. The growth in demand for organic juices in continental Europe
(especially Germany and France) was not as high as in the UK.
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MARKETING GROVE FRESH

GFL marketed its organic juices under the Grove Fresh brand. The company targeted middle-aged
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people, especially those who came under the ‘empty nesters’ group. At the same time, the
company found that the youth, especially those who were health-conscious, were taking to organic
juices in a big way, too. Andrew Shupick (Shupick), Managing Director, GFL, said, “The key
consumer group for organic juice is the over-35s whose children have left home and who are
indulging themselves with the best quality food and drink available, now that they have more
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disposable income. However we are seeing a growing number of younger consumers becoming
regular purchasers of organic juices.”6
By 2006, the company had come a long way from its beginnings in 1996, when the UK was
experiencing a surge in the demand for organic juices. Demand for organic juices had stabilized
and GFL had to operate in this very different market where phenomenal growth no longer seemed
likely.

PRODUCTS

GFL’s juices were not made from concentrates diluted with water, which in the company's
opinion, did not qualify as ‘organic’. It prided itself on selling ‘pure organic juices’ – Grove Fresh
packs contained only the juice from fruits or vegetables, without any added water, sugar,
preservatives, colorings, or additives. The company got its products certified to Soil Association
standards.7

6
“Juice steals share from traditional breakfast beverage,” www.nexnet.co.uk, March 1, 2006.
7
Soil Association Certification Ltd., the UK’s largest organic certification body, has been setting standards for
organic foods and certifying organic producers since the 1970s.

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Grove Fresh Ltd – Marketing Organic Juices

GFL also introduced juices from unusual combinations of fruits and vegetables, such as Apple &
Cranberry, Carrot, Tomato & Red Pepper, Tomato, Celery, Carrots, Beetroot & Onions, etc. The
variety of its juice combinations has been another factor differentiating the company’s products
from other products in the UK market.

PRICING

Typically, organic products commanded a premium over products grown using conventional
farming techniques, because consumers were willing to pay extra for the health advantages that
they supposedly derived from products grown without the use of pesticides and chemical
fertilizers. Moreover, organics were considered environmentally friendly and by buying them
customers felt that they were making a positive choice to safeguard the environment. When asked
why she chose organic products, a customer said, “I choose organic for my health and for the
environment because organic food is free from pesticides.”8 Surveys indicated that customers were
willing to pay a premium of 20-30 % for organic products over conventionally grown products.
Like other marketers of organic products, GFL too followed a premium pricing approach. By
following a differentiation strategy – both in terms of variety and quality - the company could

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price a 1 liter pack of juice between £ 2.29-2.59 (depending upon the fruit and retail outlet). At the
same time, the company maintained price parity with competitors who operated in the premium

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segment (Refer Exhibit II for competing brands and prices).

DISTRIBUTION
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GFL sold its products through supermarket chains, which dominated the UK market for organic
products. In spite of the stiff competition from the supermarkets’ own lower priced brands, GFL
had not only managed to hold its own, but had also created for itself a loyal customer base.
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In the 2000s, e-retailing emerged as a distribution alternative for organic produce. The UK had a
mix of specialist e-retailers and mainstream retailers with internet operations. GFL sold its
merchandise through specialist e-retailers like Simply Organic, a major player which operated only
via the internet and sold a wide assortment of organic products. GFL also distributed its products
through other e-retailers like goodnessdirect.co.uk, organicdelivery.co.uk, beanstalkorganix.co.uk
etc. and through the internet divisions of supermarket chains like Waitrose’s9 and Booths’s.10
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PROMOTION

The company displayed its trademark The Organic Juice Co. (Refer Exhibit III for the company
logo) prominently in its packing. Ad agency HDM Total Communications11 was engaged for
promotions and marketing. GFL placed ads in the print media, especially the weekend
supplements of national newspapers, women’s magazines and food titles. The company also gave
out free samples of its juices at supermarkets and other retail outlets to encourage trial.
In late 2005, GFL released a set of four posters (Refer Exhibit IV for copies of the posters) as
part of its marketing campaign. However, The Blackmoor Estate Ltd., a commercial apple grower,
the Crop Protection Association (an organization which represented members active in crop

8
“Organic food: the facts they don’t want you to know,” www.symbio-organic.com, June 18, 2000.
9
Waitrose was founded by Wallace Waite, Arthur Rose and David Taylor in 1904 in West London. In 1937, the John
Lewis Partnership acquired the business. As of 2006, with 165 branches, Waitrose supermarkets dot England and
Wales and employ more than 27,000 people.
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Booths, founded by Edwin Henry Booth in 1847, has grown to become a 25 branch supermarket chain.
11
HDM Total Communications is an independent ad agency based in London, UK and provides integrated, strategic
and creative services to its clients.

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 Grove Fresh Ltd – Marketing Organic Juices

protection) and a member representing the public, complained to the Advertising Standards
Authority (ASA)12 against GFL’s advertising. The controversial posters contained the following
messages - “Insects Won’t Eat Fruits Sprayed with Pesticides, Why Would You?” & “Fruit Juice -
Now Available in Non-Pesticide Flavour”. The complainants argued that the messages were
misleading, irresponsible and denigrated growers who used pesticides to protect their crop. Though
ASA found most of the objections unwarranted, it directed GFL to avoid using the “Fruit Juice -
Now…” poster as it seemed to suggest that pesticide residues affected the taste of fruit juice; ASA
declared that this was misleading. The other posters had the following messages - “With 2.5 Kgs
of Organic Fruit in Every Carton, There’s No Room for Pesticides” and “We Spend a Lot of Time
Adding Nothing to Our Fruit”.

CHALLENGES

The UK market for organic juices began to slow down in the mid 2000s. It was a far cry from the
torrid pace of growth witnessed in the early 2000s (Refer Exhibit V for the UK market for
organic NFC citrus juice). Moreover, the number of players operating in the organic segment of
the juice market had also seen an increase. As if these difficulties weren’t enough, the organic

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citrus market had become increasingly vulnerable to supply shortages. The organic citrus juice
market, especially orange juice, accounted for around 40%13 of GFL’s sales. The shortage in the

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supply of organic fruits also affected the development of new products at GFL. Shupick said, “The
main obstacle we face with npd (new product development) is sourcing organic ingredients that
match our very exacting standards.”14 These forces were expected to have a direct impact on
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GFL’s sales in the future.
Like many of its competitors in the UK, GFL imported the fruit for its juices from USA and other
countries, prompting a debate whether the imported produce was being analyzed and checked
thoroughly enough. “The whole approach of organic standards is to minimize the risk of someone
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using chemicals, but the further a field it is, the more difficult it is to be sure what is happening,”15
said Francis Blake, Standards and Technical Director, Soil Association. The certification standards
also seemed wanting. In the light of these, some analysts wondered whether the premium that
companies like GFL charged for their organic products was justified. Some analysts even went so
far as to declare that, in terms of health benefits, it really didn’t make a difference whether the food
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was organic or not (Refer Exhibit VI for additional information on marketing organics).

OUTLOOK

In spite of the challenges, GFL, with its high-quality products, wide assortment, strong
distribution, and appealing communication has been trying hard to retain its position as the leading
organic juice brand in the UK. In 2004-05, it breached the £ 5 million mark in sales. In the same
year, the company introduced organic vegetable juices under the sub-brand - V Juice. By early
2006, V Juice was registering strong sales at health stores thus helping GFL to post year on year
sales growth of 65% at these stores.16 Overall, GFL sales grew at 30%, outperforming the market,
which expanded by 9.5%.

12
ASA is an independent regulator for advertisements, sales promotion and direct marketing in the UK. It was set up
by the UK advertising industry to police the rules laid down in the advertising code. Its job is to ensure that
offensive, harmful or misleading ads are removed. (Source:www.asa.org.uk)
13
Apples came a close second with 30%, while all other flavors like grapefruit, and combi flavors like orange, apple
& mango, apple & cranberry etc constituted the remaining 30%.
14
“Juice Steals Share from Traditional Breakfast Beverage,” www.nexnet.co.uk, March 1, 2006.
15
“Organic food: the facts they don’t want you to know,” www.symbio-organic.com, June 18, 2000.
16
The yoy sales growth rate was for the financial year 2005-06 at independent and specialist health wholesalers.

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Grove Fresh Ltd – Marketing Organic Juices

The company was planning to organize consumer shows throughout the UK in the summer of
2006 with a marketing budget of over £ 1 million. In these shows, the company planned to give
away free samples of its juices to persuade customers to switch to organic juices. Shupick said,
“Our research shows that once someone has tasted organic juice they rarely go back to standard
products because the flavour and freshness is so much better, so we consider this activity a sound
investment in the future of the brand and the organic sector as a whole.”17
As of early 2006, the company continued to dominate the UK organic juice market with a market
share exceeding 60%.18 Of his company’s success, Shupick once said, “The key to our successful
growth is our commitment to refreshing the range in order to maintain consumer interest,”19
However, the company would have to think of ways to counter the slowing market growth,
mounting competition and supply problems to remain ahead in the race.

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17
“V Juice Attracts New Shoppers to Specialist Health Stores,” www.nexnet.co.uk, March 1, 2006.
18
“V Juice Attracts New Shoppers to Specialist Health Stores,” www.nexnet.co.uk, March 1, 2006.
19
“Juice Steals Share from Traditional Breakfast Beverage,” www.nexnet.co.uk, March 1, 2006.

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 Grove Fresh Ltd – Marketing Organic Juices

Exhibit I
Sales Turnover of Grove Fresh Ltd.
In €‘000

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Source: www.productchain.com.
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Exhibit II
Competing Brands and Prices

S.No Brand Price for 1 liter

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01 Luscombe Devon £ 3.80*

02 Sainsbury’s Pure# 98 pence
03 Duchy Originals Refresher £ 2.60*
#
04 Tesco Pure 99 pence
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Source: www.guardian.observer.co.uk.
* - approximately, # - supermarket brands

Exhibit III
GFL Company Logo

Source: www.productchain.com.

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Grove Fresh Ltd – Marketing Organic Juices

Exhibit IV
Grove Fresh Posters

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Source: www.grovefresh.co.uk.
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Exhibit V
The UK Market for Organic Not-from-Concentrate Citrus Juice
Volumes Volume Growth Revenues Revenue Growth
Year
(‘000 liters) (%) (US$ mn) (%)
1998 822 – 2.47 –
1999 2660 224 6.78 175
2000 3903 47 9.16 35
2001 4500 15 10.35 13
2002 4864 8 11.07 7
2003 5107 5 11.63 5
2004 5362 5 12.21 5
Source: www.fao.org.

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 Grove Fresh Ltd – Marketing Organic Juices

Exhibit VI
Marketing Organic Foods

Marketers, channel members and customers have divergent views with respect to the long-term
success and growth of organic produce.
While some marketers have found marketing organic produce very profitable, others have
reservations about their profitability. Still others feel that the market needs time to evolve.
Among the reasons why optimistic marketers were willing to market organic produce were that:
they could be sold on the “reduction of health risks” plank; and also on the “better for the
environment” plank; besides, the increasing acceptance and demand for organic produce are
other reasons why marketers feel these products will continue to sell.
A survey of organic retailers, wholesalers and processors in the US brought to focus the two
greatest obstacles in the market acceptance of organic produce – undersupply/inconsistent
supply, and cost. These were the issues channel members felt needed most urgent attention.
A growing awareness among consumers about food safety issues like chemical residue has led
many to opt for organic produce. A survey indicated that for 57% of customers who bought
organic produce, cost is not a consideration. However, reports questioning the safety of organics

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and the certification process have created doubts in the minds of customers in respect of organic
produce as well.
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Grove Fresh Ltd – Marketing Organic Juices

Additional Reading & References:

1. V Juice attracts New Shoppers to Specialist Health Stores, www.nexnet.co.uk, March 1, 2006.
2. Juice Steals Share from Traditional Breakfast Beverage, www.nexnet.co.uk, March 1, 2006.
3. Larger Packs Mean Increased Turnover from the Chiller, www.nexnet.co.uk, February 20, 2006.
4. Growth Accelerates for Grove Fresh, www.nexnet.co.uk, January 28, 2006.
5. First Prune Variety will Accelerate Growth of Chilled Juice Sector, www.nexnet.co.uk, January 5, 2005.
6. Competing Strategies in the Organic Juices Industry, www.organicmonitor.com, 2006.
7. Non-broadcast Adjudication, January 11, 2006, www.asa.org.uk.
8. Marketing Organic Foods, www.dpi.qld.gov.au, July 14, 2005.
9. Unclear Organic Labelling Confuses Consumers, www.checkout.ie, November 2002.
10. The European Market for Organic Juices, October 2002, www.organicmonitor.com.
11. Organic Food: The Facts they don’t want You to Know, www.symbio-organic.com, June 18, 2000.
12. World Markets for Organic Fruit and Vegetables, FAO Corporate Document Repository, www.fao.org.
13. A Guide to Marketing Organic Produce, www.aggie-horticulture.tamu.edu.
14. Producing and Marketing Organic Produce, www.marketingoutreach.usda.gov.

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15. www.grovefresh.co.uk.
16. www.asa.org.uk.
17. www.naturalproductsonline.co.uk.
18. www.waitrose.com.
19. www.booths-supermarkets.co.uk.
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20. www.productchain.com.
21. www.fao.org.
22. www.goodnessdirect.co.uk.
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23. www.fastrack.com.
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