Case Introduction:

Growth of Snapple
Arnie Green berg, Leonard Marsh and Hyman Goldan started a new venture together in 1972 in
Greenwhich Village, selling of all natural apple juice under the brand name Snapple. It all started
in the year 1960, one of the partner encouraged the family to stock health foods. The three saw
the scope of natural no-preservative fruit juices in the store, and partnered with California based
juice company to manufacture and distribute a bottled apple drink. Eventually they broke up
from the California partner and founded their own company and this is how brand SNAPPLE
came into existence with mantra of 100% Natural. The business started growing slowly using
internally generated funds and outsourced production and product development. It added various
flavors and brought lot of choices for customers to select from. By the year 1980 there brand
achieved a position in both the coasts of United States, and among different flavors its iced tea
particularly received the great demand.
During the period of 1980s Snapple faced competition from many small beverages brands
aspiring to create impact on the market by appealing to young, health-conscious urban
professionals in the 1980s. Thus founders of Snapple, decided to focus on next stage of growth
by hiring professional management. They hired Carl Gilmen from Seven-Up, to run sales and
marketing process. He increased the advertising budget and brought change to Snapples lable
design. He mainly focused on East Coast and was in doubt about West Coast so he thought
growth in East Coast will help Snapple improve in West Coast.
The distribution system slowly started to grow in Boston only 2,50,000 cases a year grew up to a
million cases a year. They invested in coolers, vending machines for convenience store and
talked up the product. The promotion was on offbeat blend of public relations and advertising.
For promotion of their least favorite product, they made spoke model called Wendy Kaufman
who used to read top 10 least favorite Snapple drink on television. Which became a huge hit.
They also did promotion on radio. Snapple invited customers to Snapple-themed fun and games
and Snapple fashion show. All these efforts helped Snapple create a strong customer base which
helped it to increase the sale which kept on grew from $80 million in 1989 to $516 million in
1993. In 1994 the founder of Snapple sold it to Quaker in 1994 for about $1.7 billion cash with
profit sales running at $674 million at that time. But this decision came out as reason for
downfall of Snapple due to many basic changes brought up by Quaker in the production and
distribution of Snapple which did not go well with customers as a result there was decline in
sales each year and by 1997 sales were $440 million and at last Quaker has to sell the brand
Snapple to Triarc in March, 1997.

Quakers Acquisition and subsequent downfall of Snapple.

Snapple was acquired by Quaker with the purpose of diversification of the beverage segment.
Quaker entered the beverage market with Gatorade. Its image was completely different from
Snapple. Snapple was poised in the market as a quirky drink for quirky people. However
Gatorade was a hardcore sports energy drink. In other words, Gatorade was a need while Snapple
was a fashion.
After acquisition of Snapple by Quaker, Quaker tried to change the USP of Snapple completely.
This was the biggest mistake that Quaker made during the acquisition. Quaker changed the
quirky packaging of Snapple, which was loved by many as it was known for its quirky
packaging. Quaker also changed the Snapples SKU (Stock Keeping Unit) to maintain it in line
with its Gatorade line. Quaker was under an impression that they could replicate the success that
they had achieved with their Gatorade line, but they were totally wrong in thinking so. A drastic
change in the image of the brand cannot help in increasing its sales. Quaker failed to understand
the consumers of Snapple and tried to merge Gatorade and Snapple consumer, thus they fell very
badly because of this.
Here are few points from which we will be able to understand the cause of Snapples downfall.
1. Snapple was considered to be a fashionable brand. Quaker transformed it into a lifestyle brand.
This transformation was not suitable
2. People shifted to other Water & energy drinks. Snapple could not sustain the brand value as
there were no initiatives taken by the management.
3. Termination of Howard Stern and Rush Limbaugh led to bad publicity of Snapple as Crapples
4. Only top 10 of the introduced 50 flavours of Snapple contributed to the market. That too only
50% of market share.
5. The brands promotions & distribution channels were unconventional. The bottle labels &
advertisements were looking like handmade and they were not at all attractive.
6. People preferred to buy Snapple in small single containers which was of 16 ounce. But Quaker
added to Snapples size and made them 32 & 64 ounce containers. The distribution was also very
ineffective. So it hampered the branding of Snapple.

Triarc Acquires Snapple (1997)

An investment company called Triarc which was doing busing with troubled asset acquired
Snapple in 1997. They recruited Ken Gilbert as vice president of marketing to get Snapple back
in business. Deutsch, Inc was also called in to develop the overall communication startegy. The
main target was to revitalize the brand. A study was prepared on the consumer of Snapple their
culture, and the dynamic of the ready -to-drink beverage category.
Snapple was struggling to find a feet in the market when Triarc acquired it. Quaker finished
Snapple's legacy in the market.

Action Plan for Triarc

It is really important for Triarc to understand the strengths ofSnapple and Quaker, so that the mix
of both can be plannedand executed to bring back the Snapples lost market shareand consumers
visibility. The key aspects to success in thebeverage industry are Promotional Activities,
DistributionChannels and Product-Consumer relationship.
It is really important for Triarc to evaluate the strengths of Snapple and Quaker, so that a mix of
both can be planned and executed to bring back the Snapples lost market share and brand
recognition. The important steps to achieve success in the beverage industry are Promotional
Activities, Distribution Channels and Product Consumer Relationship.
The following strategies can be executed by Triarc to maximize profits from Snapple.

Snapple is an active healthy product. Triarc should concentrate on marketing the product
in accordance with the name. This will help to regain the customer recognition towards
the product and will also help in promoting the product as an healthy nutritional drink for
humans.
Triarc should use the old marketing techniques and skills to market Snapple. It should
organize campaigns in public places so as to have a direct interaction with the consumer
to get their feedback and also making them aware of the comeback of Snapple.
The past records of Snapple suggest that the top 10 flavours of Snapple amounted to 55%
of Market Share. This implies that Snapple should focus on limited flavours and efforts
should be made to improve them so that consumers are deeply in love with those
flavours. Only then can it lead to maximum use of promotional activities.
Trirac should concentrate on getting distribution channel productive and try to remove
inefficiencies in the channel so that operational cost could be decreased and make the
product available in all the major market area according to the demand.
For Snapple to get back the lost customer base and increase its sales, it must lower down
its sales price and also to increase the profit margin it should lower the production cost by
making production system more effective and efficient.
For promotion of Snapple to large base of audience Triarc should choose ambassador for
the product who has long reach among the audience and can put a strong and reliable
image of the product in front of them.