Snapple Case Study
Problem:
Develop a strategy for Snapple 's recovery after a three year trend of declining sales under the management of Triarc Companies. Sales had declined almost 35% in three years (from $674 MM in 1994 to $440 MM in 1997) and had the profile that the company had achieved great success with was diminished.
Issues
History:
Small company origins based on authenticity and trust in consumers eyes. (ref. Exhibit 6 Pivotal Characteristics) This was evident in the initial mantra of the company "100% Natural" even before the company became Snapple (Unadulterated Food Products, 1972). o The purchase by Quaker and subsequent changes left the consumers feeling betrayed and left the impression of Snapple "selling-out".
Replacement of spokesperson ("Wendy") and termination of contracts with radio personnel (Howard Stern) produced bad press and continued
Distribution and subsequent growth of brand from 1987 to 1994 was in large part due to the growth of the network of small family owned distributors. o Quakers attempts to have the distributors cede their supermarkets in exchange for Gatorade distributor rights in the cold market (deli 's, restaurants, etc ) was met with opposition and resulted in conflicting distribution channels. o Upsetting the distributors that had been responsible for the growth of the cold market had potential disastrous effects on your over all business. In the alternative beverage category 94% of the wholesale dollars is spent outside of the supermarket sales. (See Exhibit 2 and 3 which indicate that only $0.3 B is spent in supermarkets as opposed to a total of $5 B spent in the overall category.)
Industry/Market
The market that Snapple products compete in is the Alternative Beverage category. This is a very competitive market with types of beverages within the category varying from water to sports drinks to straight fruit juices. With this variety within the category makes it difficult to identify the
Develop a strategy for Snapple 's recovery after a three year trend of declining sales under the management of Triarc Companies. Sales had declined almost 35% in three years (from $674 MM in 1994 to $440 MM in 1997) and had the profile that the company had achieved great success with was diminished.
Issues
History:
Small company origins based on authenticity and trust in consumers eyes. (ref. Exhibit 6 Pivotal Characteristics) This was evident in the initial mantra of the company "100% Natural" even before the company became Snapple (Unadulterated Food Products, 1972). o The purchase by Quaker and subsequent changes left the consumers feeling betrayed and left the impression of Snapple "selling-out".
Replacement of spokesperson ("Wendy") and termination of contracts with radio personnel (Howard Stern) produced bad press and continued
Distribution and subsequent growth of brand from 1987 to 1994 was in large part due to the growth of the network of small family owned distributors. o Quakers attempts to have the distributors cede their supermarkets in exchange for Gatorade distributor rights in the cold market (deli 's, restaurants, etc ) was met with opposition and resulted in conflicting distribution channels. o Upsetting the distributors that had been responsible for the growth of the cold market had potential disastrous effects on your over all business. In the alternative beverage category 94% of the wholesale dollars is spent outside of the supermarket sales. (See Exhibit 2 and 3 which indicate that only $0.3 B is spent in supermarkets as opposed to a total of $5 B spent in the overall category.)
Industry/Market
The market that Snapple products compete in is the Alternative Beverage category. This is a very competitive market with types of beverages within the category varying from water to sports drinks to straight fruit juices. With this variety within the category makes it difficult to identify the