Snapple Essay

699 Words2 Pages

Snapple was launched in 1972 in the Greenwich Village area of New York City with its founding product being an all-natural apple juice targeted to health conscious consumers. Over the next 15 years, Snapple grew slowly yet still managed to established markets on both the east and west coasts of the U.S. In the late 1980’s, with revenues reaching about $8 million in 1986, Snapple engaged a beverage industry sales and marketing veteran to professionally manage its next growth trajectory. Having established a $1 million advertising budget and a focus on strengthening its east coast independent distribution channels, Snapple revenues grew ten-fold to $80 million by 1989 and reached $231 million in 1992 when Snapple was then sold to the Thomas …show more content…

Quaker’s development and expansion of the Gatorade brand in the marketplace found success with about 60% of Gatorade revenues streaming from so-called “warm channel” distribution systems that were predominantly supermarket type retail outlets. Snapple, on the other hand, had established a stronger presence in the complimentary “cold channel” distribution areas that included convenience stores, restaurants, delicatessens, mobile food & drink vendors, parks and recreation areas, etc., and Quaker believed that the Snapple acquisition would complement and subsequently drive Gatorade sales into the Snapple cold channel distribution streams while Gatorade distribution logistics and warehousing would propel Snapple into the warm channel arena of mass sales. Quaker’s vision of joining the two beverage brands was to increase product value by providing enhanced merchandising to its customers, to expand its in-store refrigeration presence, and to expand the number of sales locations to the benefit of its product brand consumers. Unfortunately, that vision was never realized as Snapple sales slipped downward over the next 3 years following Quaker’s acquisition, dropping to $440 million in 1997 and forcing Quaker to sell Snapple in March of that …show more content…

Consistently timed advertising intended to drive consumer awareness coupled with timely new product innovations and marketplace introductions appeared lacking under Quaker. Additionally, Quaker’s corporate ethos did not align well with Snapple culture and the Gatorade and Snapple brand styles did not mesh well either, with the Gatorade brand being more “lifestyle” (health drink) focused while the Snapple brand was more “fashion” (taste drink) oriented; essentially targeting two different consumer audiences and diametrically opposed beverage markets. Quaker seemingly did not evaluate the impact of the brand differences relative to the Gatorade and Snapple target consumer markets nor did Quaker appear to consider the impact of corporate cultural differences between Quaker and Snapple. Quaker also did not appear to perform due diligence when it did decide to introduce Snapple in larger bottle sizes and in multi-packs for its warm channel (supermarket) points of distribution. Quaker simply failed to recognize that Snapple sold best in its single serving packages and that the mass marketing style of product presentation that supported Gatorade would not, inevitably, support Snapple in its mass quantity packaging

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