Snapple Essay

SNAPPLE – An Introduction

 Started in 1972 by selling all-natural apple juice
 “100% Natural”- the business mantra
 Alternative beverage category drink
 Product portfolio includes juices, iced tea, lemonade, water
 By 1994, had sales revenue around $674 m
 Distributed mostly through cold channels
 Promotion of Snapple was an offbeat blend of PR and advertising
 Had huge success by creating a spokesmodel for the brand: Wendy Kaufman
 Brand promoted through radio programs by Stern who humorously promoted the brand
 Promotion used to be natural and real
 After huge success for many years, Snapple brand was sold to Quaker in 1994 for $1.7 b

QUAKER ENTERS THE PICTURE

 A food company managing four areas of business:
grain-based foods, bean-based foods, pet foods, and beverages
 Got huge success with Gatorade, contribution of $1.1 b of company’s $5.95 b turnover
 Distributed mostly through warm channels
 Acquired Snapple to extend the beverage business product portfolio
 After suffering loss for 4 continuous years, sold Snapple to Triarc Beverages for $300 m

WHAT WENT WRONG WITH THE ACQUISITION OF SNAPPLE BY QUAKER OATS

 Quaker – with only Gatorade, wanted to stave of acquisition – Snapple would give broader lineup to capture economies of scale
 Quaker's corporate temperament was perfectly attuned to the achievement-oriented message of Gatorade
 But Snapple wasn’t about accomplishing an objective; it was about adding a little whimsy to the humdrum and the everyday.
 The number of flavors was cut back
 Packaging was redesigned
 Advertising campaigns were scrapped
 Biggest mistake Quaker Oats made was changing Snapple's distribution - same distribution chain as Gatorade
 the loss of the supermarket accounts made the independent distributors very unhappy

IMPLICIT REASONS FOR FAILURE  Vital interplay between the challenge a brand faces and the culture of the corporation that owns it
 When brand and culture fall out of alignment, both brand and corporate owner are likely to suffer
 Brands thrive when there's a close fit between process and corporate temperament
 Failure to maintain Snapple’s unique strategic position (quirky, upstart brand) was the biggest mistake

TRIARC TAKES OVER

 Investment Co. that bought and sold troubled assets
 Had beverage assets like Mistic and Royal Crown Cola
 Bought Snapple for $300 m to take the advantage of the brand value that Snapple enjoyed

PROPOSED MARKETING STRATEGY FOR SNAPPLE

 The brand and its message is interpreted differently regionally from fashion forward in New York to health conscious in St. Louis
 Wendy could be brought back for a commercial
 to get consumers excited and talking about Snapple again
 An Endearing persona will help relate to the brand on multiple levels
 Introduce a brand/ product named after Wendy Kaufmann
 Invest in advertising heavily, run more promotions – creating product awareness
 Network television, local television spots and radio advertising
 Alignment of product , image and company atmosphere will help restore the consumer confidence from the perceived “sell out”
 Repair the damage Quaker Oats did to the distribution line
 Restore confidence in the brand to the distributors and assurance of their value in Snapple’s success
 Encourage distributors to talk up the product and push it once again to their customers
 Continued variety and experimentation