A group case study project as part of the Marketing Management Post-Graduate course work exploring the acquisition of Snapple by Quaker and then Triarc.

1. 1
CASE
STUDY
Presented By:
Alex MacArthur
Chantelle Jewkes
Heather Osbourne
Oliver Ifurung
Sara Blumenstein
Sarah Turner
Tracy Jiang
Michelle Hamilton
Prepared For: Mike Dover
Course Code: MKPD 507
Due Date: March 26, 2013

2. 2

3. 3
Table of contents
SWOT Analysis.......................................................................
Key Implications
Strengths........................................................................
Weaknesses...................................................................
Opportunities.................................................................
Threats...........................................................................
PEST Analysis.........................................................................
Snapple: The Golden Years.....................................................
Entrepreneurial Beginnings...........................................
Standout Promotional Strategy.....................................
A New Age Niche..........................................................
The Quaker Debacle
A Mergers & Acquisitions Disaster................................
Quaker’s Lagging Growth..............................................
Intensity of Rivalry.........................................................
Problems with Promotion..............................................
Mishandling of Distribution & Packaging.......................
The Triarc Acquisition
Valuable Lessons Learned.............................................
Leveraging Triarc’s Core Competencies........................
Snapple Brand Positioning
Risks...............................................................................
Rewards.........................................................................
Snapple: A Fashion Brand......................................................
Triarc: Recommended Initiatives............................................
Works Cited............................................................................
6
6
7
7
8
9
10
11
11
12
13
13
15
15
16
18
19
20
21
21
24
26
..................................
...

4. 4
SWOT Analysis...............................................................................
PEST Analysis.................................................................................
Quaker’s Stock Price
Exhibit 1, Exhibit 2.................................................................
Supermarket Brand Shares Strategic Group Map.........................
Brand Resonance............................................................................
Lovemarks.......................................................................................
Table of EXHIBITS
6
10
14
15
20
22

5. 5
ExecutiveSummary
Beginning in 1972 as an all-natural apple juice, Snapple was a small business that took 15 years to
become an overnight success. The Snapple brand provided an offbeat product to satisfy the needs
of young adults in the health conscious, alternative beverage category. Offering “100% Natural”
products in many different flavours, Snapple was able to maintain premium pricing across the brand
to achieve success.
During the late 1980’s and early 1990’s, through an increase in their advertising budget, Snapple
gained a near-cult following across the United States. Sales skyrocketed to a peak of $674 million in
1994, when Snapple was sold to Quaker Oats for $1.7 billion. Mistakes in advertising and a
disconnect with consumers led to sales falling $234 million in the next three years. Quaker was
forced to sell the troubled company to Triarc Companies for $300 million.
This report examines the success and subsequent downfall of the Snapple brand by utilizing
multiple models including a SWOT, PEST, and 4 P’s analysis. We will examine these implications for
the Snapple brand, and why their brand took a turn for the worst after its sale to Quaker Oats in
1994. Through additional analysis, we will provide recommendations to the Triarc Company.

6. 6
SWOTAnalysis
Weaknesses
• Snapple’s brand lacks clearly established
points-of-difference.
• As a “fashion” brand Snapple
consumption needs to be socially reinforced
• lacks “conceptual coherence” to drive
usage outside of above social factors
• Weak in “warm channels” including
supermarket sales
• Vulnerabilities in their relationship with
controversial public figures
Threats
•Intensely competitive nature of market
•Emerging markets
• Healthy lifestyle and eating trends
•Volatile consumer preferences
•Potential government regulation in soft
drink industry
Opportunities
•Grow their brand as a fashion beverage
• Innovate their product continuously based on
customer interpretations
•Capitalize on health-conscious social patterns
• Focus on their “real” personality and quirky
edge
•Establish nutritional education programs and
draw on corporate social responsibility
• Increase their product differentiation and
establish a clearer brand image
• Produce other “alternative” beverages i.e.
bottled water and non-premium
•Combine with another company to improve
supply chain and management capabilities
Strengths
• Wide product line
• Strong brand image / heritage / meaning
• Strong and meaningful spokesperson
• Well established distribution network

7. 7
SWOTAnalysis:Implications
Key Implications
Strengths
Wide Product Line: Snapple’s product line offers consumers a large variety of all natural flavors to choose
from. The use of all natural ingredients is in line with industry health trends, presenting consumers with a
healthier option. This in turn has provided them with a major competitive advantage in the segment.
Strong Brand Image / Heritage / Meaning: Snapple is classified as a strong, authentic, premium beverage
that is both personal and fun. The Snapple brand reflects a fun and quirky image that stands out in the mind
of their consumers. This key differentiating factor and USP has undoubtedly pushed the company to
succeed and should not be ignored by acquiring companies.
Strong and Meaningful Spokesperson: Snapple has been able to create a significant amount of equity
through past offbeat promotional and marketing efforts. Wendy the “Snapple Lady” is a strong, well-liked
spokesperson, with a relatable persona that represents the brand’s values and encapsulates the
‘authenticity’ of the brand. The ability to connect with their consumers in meaningful and lasting ways
through promotional characters such as Wendy underlines one of their core competencies, and has helped
build out a strong image and high levels of awareness.
Well-Established Distribution Network: these relationships have been injured through the acquisition of the
brand through Quaker. However the strong relationships with the independent distributors have played a
large part to Snapple’s growth, value, and overall success. These key relationships have provided Snapple
with a competitive foothold in the cold channel, and must be carefully fostered.
Weaknesses
Many of Snapple’s weaknesses stem from the brand’s poor product differentiation under Quaker’s
stewardship. The brand lacks clearly established points-of-difference from its competitors within the
segment and by extension; a weakness lies in the ability to define distinctive, appealing consumer benefits
that effectively drive increased consumption and growth in sales.
A related weakness is Snapple’s difficulty establishing clear, actionable associations for the brand that drive
independent usage. As a “fashion” brand, Snapple use typically requires social reinforcement, and the
desirability of the product relies on perceived popularity. Consumption is directly correlated with the
intensity of Snapple use by others in the immediate social environment. This consumer behaviour means
that Snapple can easily fall out of fashion; brand perception and usage is more difficult to control than if
there was more conceptual coherence of the brand. That would provide clear points of difference and
consumer benefits driving consumer behaviour.
Where entrepreneurial spirit and authenticity was an integral factor of early success, under Quaker,
management that did not understand the brand became a detrimental weakness. One of Snapple’s key
strengths prior to acquisition by Quaker was its oddball promotion and niche positioning. These factors
endeared Snapple with consumers, and even developed fans and followers of the brand. This essential
strength quickly turned into a weakness under new management that did not recognize the importance of
these factors to the brand’s success. The diluted brand personality under new management resulted in poor
brand perception from consumers who felt betrayed by the brand that they felt had “sold-out”.

8. 8
A strong and loyal network of independent distributors is another strength that became a weakness under
Quaker’s ownership. Quaker mismanaged the relationships with the distributors permanently damaging
Snapple’s distinct advantage in the cold channel distribution system turning it into a weakness for the
company.
In a similar vein, throughout Snapple’s existence it has performed poorly in the warm channels with
grocery stores making up only 20% of Snapple’s sales in 1994. Headway into warm channels did not
improve under Quaker management despite very strong efforts. The inability to make inroads into
ultimately limits the sales potential of the product.
Snapple’s off-the-wall promotional techniques included relationships with controversial radio personalities,
Howard Stern and Rush Limbaugh. This strategic association, despite clear benefits, put the Snapple brand
in a very vulnerable position. These outspoken public figures made their names walking the line of
acceptability. With the close brand association with these figures if one of them did cross a line in public
perception it could result in serious consequences for the brand’s image and public perception. When
Quaker severed these relationships due to the inherent risk, this vulnerability was demonstrated when
Stern very publicly turned against the Snapple harming the brand’s image.
Opportunities
There are a number of opportunities that Snapple may wish to capitalize on. Firstly, Snapple may grow
their brand as a fashion beverage. Snapple’s “alternative” drink category is largely represented by what is
current and trending. Therefore, an opportunity may lie in dedicating resources to market research and
spotting trends. They may then use this research to innovate their product and maintain their image as a
fashion brand. This may also entail revamped and innovative packaging with higher impact. They are
currently perceived as quirky, edgy and real. It is opportunistic to preserve this image.
Snapple prides itself in being a natural and real fruit beverage. Society has a growing health-conscious
attitude that Snapple may capitalize on. They may wish to solidify this image and post facts regarding their
beverages true content. This may also deter people from the ambiguity of the health content.
Historically this also aligns with their “real” personality. An opportunity also lies in their corporate social
responsibility. They can educate youth about nutrition and health in general. This may help them gain
access to schools and relates to their natural and real product. Consumers desire beverages that they can
feel good about drinking. Snapple can provide them with the reasons they should feel good drinking their
product.
An opportunity for Snapple may also be to increase their product differentiation by establishing a clearer
brand image. This would help to encourage daily use and establish Snapple as part of a routine. Currently,
consumers drink Snapple in an individualistic and inconsistent manner. They can use advertising and
promotional tactics such as Wendy and public relations campaigns to maintain their clear “real” product
differentiation. It is more likely that when someone truly understands and favours the brand it will be
consumed more often.
Snapple may pursue other popular “alternative” beverage segments such as bottled water, sports drinks,
juice and non-premium. The non-premium, and bottled water, segment of “alternative” beverages
represent 24 and 19 percent of the category respectively. If Snapple can introduce another product that
aligns with their “alternative” image there may be an opportunity for increased profits. This may also help
to solidify their brand.
SWOTAnalysis:Implications

9. 9
Snapple may pursue merging with another company in order to leverage supply chain capabilities and
management expertise. Collaborating resources with the right company may lead to cost savings and
improved supply chain processes. They may also gain access to newer technologies that may allow for
improved packaging and research and development. However, they must ensure that their brand aligns with
the company. With greater capabilities and resources there should be a better chance for increased market
share and profits.
Threats
Snapple faces a number of threats in the beverage market. First is the intensely competitive nature of the
business. There are hundreds of different beverages in the market for consumers to choose from. Water,
flavoured water, soft drinks, juices, teas, coffees, energy drinks, and any hybrid exist. Other substitutes exist
as well, such as wine, beer, ciders, coolers, and spirits. There are many beverage options for consumers to
choose from which presents a threat to beverage producers. Companies must ensure that their brand and
their product stand out, are differentiated and can make it through the clutter. Consumers need to feel a
compulsion to buy a company’s specific product.
In addition, beverage markets are developing and new markets are emerging that did not exist before.
As companies innovate, new markets are beginning to form around new beverages. Diet juices, flavoured
waters, as well as tea and coffee based beverages are some examples of new products that are changing
markets. Hybrid products, such as beverages that combine juices and tea, are also changing the structure of
the beverage market. This presents threats to beverage producers in two different ways. If the producer is
the leader of change, then they face the threat of increased competition. On the other hand, if the producer
is lagging behind and not innovating, then these new markets present increased threats to existing business.
Furthermore, the beverage market faces a threat from the move towards more healthy lifestyles and eating
trends. In the past, beverages such as juices and soft drinks were successful in having full flavour and high
sugar content. Now, as consumers are becoming more informed, and are reading labels more carefully, they
are demanding more healthy alternatives to the products that they love. Consumers are moving away from
the traditional sugary beverages, to low calorie and low sugar options. Pressure exists now for beverage
producers to change recipes to suit these evolving consumer preferences. If beverage producers do not
innovate and develop new products to meet these changing needs, they might get left behind.
Changing consumer preferences also present a threat to beverage companies. Consumer preferences are
volatile and often unpredictable. With consumers holding an increasing amount of power in the
business-consumer relationship, companies must ensure that they are meeting their needs. This is
threatening because companies are losing some of their power. In the past, companies made all the
decisions based on what worked for the corporation. However, this power dynamic is changing, and
companies need to meet the demanding wants and needs of consumers. If not, companies stand to lose.
Lastly, potential government regulation in the soft drink industry presents a threat to beverage producers.
Over the years, soft drinks have received widespread criticism for their high sugar content and unhealthy
nature. Soft drinks have been banned from school cafeterias, vending machines, and in public areas as well
in the hopes of improving public health. Talks of imposing a tax on soft drinks have also occurred, with the
idea that the added tax will be a deterrent to buying unhealthy products. This presents a threat to beverage
producers, because soft drink manufacturers will likely turn to producing alternative beverages to
compensate for declining soft drink sales. Soft drink conglomerates will likely increase efforts in other areas
of their beverage portfolios to offset the shrinking soft drink market. This could lead to increased
competition, or new products entering markets.
SWOTAnalysis:Implications

10. 10
pestAnalysis
Technical
•Innovations in bottling techniques for hot
teas. Snapple pioneered this new
technology which later became standard
practice within the
category.
•Innovations in vending machine design.
Snapple proved to be innovative again in
developing glass-front vending machines
and coolers that doubled as promotional
tools effectively displaying its uniquely
packaged products (Winer).
Social
•Prominence of influential and entertainment
icons holding social importance e.g.,Howard
Stern, Rush Limbaugh celebrity endorsers
•More relatability with brands and their
positioning through use of new and innovative
marketing tactics such as spokespeople
e.g., Wendy Kaufman
•Growing health-consciousness and care for
nutrition
•Consumers are now more aware of what
ingredients and nutritional facts are relevant to
the products they consume
•More social awareness and public expression
of sensitive topics. This leads to very vocal and
informed (or misinformed) consumers that are
quick to judge or praise companies. Thus, there
is an increased importance for Corporate Social
Responsibility
•Increase in teenagers with disposable income
that have influenced marketers to discover new
and upcoming trends and fashions
(The Merchants of Cool)
Political
•In the early 1990’s, Americans viewed
their health care system in a negative
light - nine in ten Americans felt the U.S.
health care system needed fundamental
changes or to be completely rebuilt. (CBS
News)
•Clinton’s proposed health care reforms
led to government endorsed health wake
up calls within 30-44 age group, which
may affect Snapple consumption.
Economic
•In 1997 growth in the alternative beverage
category was explosive, with premium making up
24%, bottled water 19%, 100% juice 17%, sports
drink 16% and Non-Premium 24% (Deighton).
•1997 financial crises in Asia, making it a poor
time for Snapple to expand into Asian markets.
However, most developed countries were
relatively unharmed, including the United States
•Based on the statistics, the US economy was at
the stage of rapid sustainable growth around 1997.
Personal and household incomes were increasing.
These factors created robust consumer spending
and increased market demand, providing a very
good opportunity for Snapple to develop its
business. On the other hand, because of increasing
demand, more competitors were entering the
segment. In addition, with more jobs created, the
cost of labor can rise, increasing Snapple’s
fixed costs.

11. 11
SNAPPLE:THEGOLDENYEARS
Entrepreneurial Beginnings
Greenberg, Marsh, Golden began in a business partnership selling brand name Snapple all natural apple
juice to health food stores in 1972. Health implications derived from the initial business led Snapple to
popularity in the 90’s. The mantra “100% Natural” was adopted into Snapple’s marketing. Snapple’s almost
cult status achieved in 1980 catapulted the business into success above its competitors.
As business grew product and product development was outsourced, allowing for a network of distributors
to be built across New York City. Wider distribution network alerted the company to a need for larger
variety in its product line. Fortunately products were priced at premium, allowing for new flavours and
varieties to be tested without negatively impacting the business if a specific product failed. Marketing was
targeted towards aspiring young, health conscious, urban professionals. Snapple becomes part of the New
Age / Alternative beverage industry, competitors included; Napa Naturals, Natural Quencher, SoHo, After
the Fall, Ginseng Rush, Elliot’s Amazing, Old Tyme Soft Drink, Manly Sodas, Syfo, and Original New York
Seltzer.
The Snapple founders decided to go against the normal entrepreneurial goal of exit via acquisition. In order
to facilitate the next stage of growth, Snapple hired professional management to run sales and marketing.
Advertising budget was increased to $1 million by Gilman who implemented focus groups while also
intensifying the independent distribution system from coast to coast. This distribution system grew to a
network of 300 small, family-owned distributors, highlighted with a press story calling this network,
“salesman, truck loader, driver, heavy lifter and bill collector, all in one”. Nationally, supermarkets
accounted for about 20% of Snapple’s sales.
Standout Promotional
Strategy
The real success was in Snapple’s
promotion, an “offbeat blend of
public relations and advertising.”
The advertising agency
Kirshenbaum, Bond & Partners
created a spokesperson for
Snapple, Wendy Kaufman, a
former truck dispatcher with a
brash New York attitude. Her
eccentric personality attracted
unpaid media attention, and she
also appeared on Oprah and
Letterman. From Wendy’s
success, Snapple sponsored the
radio shows of Howard Stern and Rush Limbaugh. The brand received on-air endorsement and was often
the topic of the two radio hosts’ banter. Snapple’s sales grew from $80 million in 1989 to $231 million in
1992 and $516 million in 1993. Even with the growth of competition in the “Alternative beverage”
category, Snapple remained steady at 30-40% of market share.

12. 12
A New Age Niche
Snapple’s growth from 1972-1993 can be attributed to its initial success as a health food beverage.
As Mike Weinstein said, the key drivers in the beverage business are distribution and promotion. The
implicit health benefits attached to Snapple’s brand image allowed for the beverage to be widely
distributed. Consumers associated fruit with health and Snapple with fruit, this led them to the
conclusion that Snapple was healthy.
This strategy was extremely effective from 1972-1993 allowing Snapple thrive within the new age /
alternative beverage category, while at the same time allowing the beverage to be widely and cost
effectively distributed. 1992’s $516 million and 1994’s $674 million in sales are evidence of a
successful advertising campaign operated by the Kirshenbaum, Bond & Partners. Quaker’s $1.7 billion
purchase in 1994 that included the discontinuation of the Kirshenbaum advertising strategy, was
followed by a $234 million drop in sales from 1994-1997. This drop in sales shows correlation between
the advertising tactics and Snapple’s successful promotional strategy from 1972-1993.
Thus, we can see that from 1972-1993 Snapple flourished in a sea of failed beverage startup
companies because they decided against exit via acquisition, allowing them to successfully employ
promotional and distribution strategies. The focus on two of the 4 P’s, the “100% Natural” product and
promotion, drove Snapple to success.
Snapple:TheGoldenYears

13. 13
THEQUAKERDEBACLE:ANM&ADISASTER
A Mergers & Acquisitions Disaster
Quaker’s problems with Snapple were primarily a managerial failure that was compounded by the fact that
the purchase was not an ideal due to the misalignment between the Snapple brand and Quaker’s corporate
culture, and the external competitive environment. These errors caused the brand to lose $1.4 billion in
value in just four years of Quaker’s stewardship.
Research shows that approximately 70% of mergers and acquisition deals that take place globally result in
failures. Most of these failures can be attributed to non-alignment of objectives, lack of cultural integration,
and incomplete due diligence. Despite the degree of risk taken in a merger, accurate planning and
knowledge can result in major success. In the case of the Quaker acquisition in Snapple, there was a major
failure in achieving synergy between the two companies (Turner).
Quaker did not understand Snapple’s key demographics, the importance of its unique/quirky brand identity
and failed to realize that it required different promotional, distributional and other considerations than
Gatorade to be successful.
On a superficial level, the probability of failure with Snapple was very low given their marketing know-how,
and success in the beverage category with Gatorade. However, there were several key, avoidable factors
that led to such a devastating loss for the company.
Quaker’s Lagging Growth
In 1994, Quaker was looking to diversify their beverage portfolio to stave off acquisition by larger
competing firms. Quaker bought Snapple for what is often considered an overvalued price tag for a brand
that is unproven in the national markets, still being primarily a regional brand, of $1.7 billion in the hopes
they could make lightening strike twice (Deighton 47).
One of the discernible motives behind the acquisition was to reinvigorate both growth and financial
performance. Quaker’s growth had been lagging due to holding several mature businesses, and share prices
had remained largely unchanged since 1991 (Optimum Capital). However, Quaker failed to note that
Snapple was a declining brand in a growing market, and a lack of due diligence caused the company to
severely overestimate Snapple’s growth potential which had been impressive prior to the acquisition.
Lack of Due Diligence
Smithburg had already successfully acquired Gatorade, quickly turning it into a market dominator,
and was hoping to do the same with Snapple. However, the brands were completely different in
regards to culture, marketing etc. and would not be able to achieve the desired synergies due to this
lack of compatibility.
Quaker had also made the mistake of selling off their bean based and pet food businesses (positive but
low-growth cash flows for the firm) to raise $90 million of the $1.7 billion acquisition cost - which had they
been kept, would have sustained much higher level of performance for the firm (Optimum Capital).

14. 14
Exhibits 1 and 2 summarize financial and stock price performance for Quaker prior to the acquisition, and
during the period which it operated Snapple. It is apparent that such a purchase was not appropriate for
Quaker, and with proper due diligence (properly assessing whether or not Snapple’s growth was in fact
sustainable) the company could have avoided such a huge loss.
Exhibit 1
Exhibit 2
(Source: Optimum Capital)
THEQUAKERDEBACLE:LaggingGrowth

15. 15
Intensity of Rivalry
At the time of acquisition in late 1994 competition was intensifying in the RTD tea segment from both deep
pocketed competitors and smaller niche brands slowly eroding Snapple’s market share. In 1993 Pepsi/Lipton
had begun dedicating significant resources to the category in the form of national advertising campaigns,
even briefly surpassing Snapple’s market share in the supermarket channel. During this period there were
several new entrants in the category including; Arizona Iced Teas, Nantucket Nectars, and Mystic that were
all eating into Snapple’s market share with innovative, niche strategies (Winer 3).
Simultaneous to the intensifying competition, by 1994 year-end, the overall growth of the segment was
showing signs of slowdown, for the first time below the 50-100% range (Winer 2).
Supermarket Brand Shares, 1997 (Case pg. 246)
*Market share is indicated by circle size
*Note that Snapple is the market leader however their position is threatened by competitors with similarly branded teas
and fruit juices
THEQUAKERDEBACLE:intensityofrivalry
Problems with Promotion
As illustrated in the previous section, Snapple owed its early success in large part to eccentric, oddball
branding and unique promotional tactics. Quaker made the fatal error of abandoning Snapple’s
unconventional strategy in favour of a more traditional approach. This began with the high-profile firing of
the much-loved spokes model Wendy Kaufman, and severing ties with radio personalities Howard Stern and
Rush Limbaugh at once robbing Snapple of the cultural cache that it had previously carried and creating a
severe public relations backlash.

16. 16
When Quaker cut ties with Snapple’s public faces they the fallout exceeded the loss of the spokespeople
themselves as assets to the brand. The decision generated a public relations crisis as loyal fans of Wendy
the Snapple Lady were upset by the treatment of the beloved spokeswoman. Even worse, Howard Stern, an
outspoken radio personality that had once represented Snapple, turned against the brand. He was relentless
in his on-air diatribes creating a months long battle Quaker now had to fight to stop Stern from continually
referring to “Crapple” to his vast audience (Deighton 50).
Quaker then faltered in its new promotional strategy, making moves to normalize the brand identity stripping
it of the “oddball”, “kitschy” image differentiation that audiences connected with. The “Threedom is
Freedom” television campaign was the most obvious shift in focus. This corporate campaign revolved around
Snapple angling to be the third largest beverage brand behind Coca Cola and Pepsi, an approach that ran
counter to the brand’s quirky sensibilities.
The new mainstream positioning aimed to remove Snapple from a niche segment where the brand was
market leader and position the brand as third choice in the mainstream beverage category behind Coca Cola
and Pepsi where at this point, the brand had no hopes of being a viable competitor. (Jackson 225)
Mishandling of Distribution & Packaging
Quaker purchased Snapple in order to complement, and boost sales of their successful Gatorade brand.
Quaker understood Snapple’s success selling single servings in the cold channels and aimed to capitalize
on that strength to push Gatorade through those channels. Conversely, Quaker aimed to increase Snapple’s
sales through warm channels where Gatorade had been successful.
Quaker’s mistake was attempting to transform Snapple’s successful ‘fashion brand’ into a mainstream
product like Gatorade, by changing its distribution, packaging, and other important relationships.
Quaker mistakenly implemented the textbook mass market strategy used with Gatorade in an attempt to
accelerate Snapple’s growth - completely ignoring the distribution system that had made Snapple so
successful in the first place. Snapple had created a successful niche for itself, and a transition to mass
distribution was an inappropriate move for the brand.
THEQUAKERDEBACLE

17. 17
Quaker’s attempts to push Gatorade onto Snapple’s distribution partners created problematic relationships
with Snapple’s cold channel distributors. Quaker’s proposal to Snapple’s distributors would create an
inequitable arrangement with the distributors on the losing end. By initiating this, Quaker fostered distrust
and ill-will towards Snapple’s new parent company. Snapple provided almost double the margins and sold
better - asking distributors to take a deal that would hurt their business (Winer 4) quickly turned this vast
and loyal network of distributors from a key strength to a weakness.
Unfortunately, from the start, improper treatment of channel issues doomed Quaker’s Snapple strategy.
While Quaker’s Gatorade strategy centered on achieving strength in the warm channel, Snapple’s strength
had developed in the cold channel, something Quaker hoped to reverse. Quaker’s disregard for Snapple’s
established channel structure certainly injured the brand, causing channel conflict that resulted in
plummeting Snapple sales (with the distributors now relegating Snapple to secondary status). In order to
successfully transition the Snapple brand to the Quaker infrastructure, the company needed to better
manage and retain the strong relationships that had been established with the distributors.
Another fatal mistake was Quaker’s introduction of larger sized Snapple bottles, a packaging strategy that
was found to be quite profitable with Gatorade. This demonstrates Quaker’s evident lack of understanding
and appreciation for the Snapple brand as the drink was seen as a ‘lunchtime beverage’, and was most often
consumed in single servings. Thus, 32 and 64 ounce bottles were a mismatch with the purchasing and
consumption behaviour of Snapple’s customers.
Had Quaker’s marketing executives been more scrupulous and less biased, they might have devised a more
effective and appropriate channel strategy for Snapple. Unfortunately, from the start, improper treatment of
channel and packaging issues doomed Quaker’s Snapple strategy. Quaker’s disregard for Snapple’s
established channel structure certainly injured the brand, causing channel conflict that resulted in
plummeting Snapple sales. In order to successfully transition the Snapple brand to the Quaker
infrastructure, the company would have needed to better manage and retain the strong relationships that
had been established with the distributors.
Despite the superficial probability of success there were a myriad of managerial missteps that
plagued Quaker’s handling of the Snapple brand. Perhaps most significantly, Quaker failed to realize
the obvious cultural differences between Snapple’s brand and their corporate positioning goals, and
the importance of Snapple’s offbeat brand image to its success. This directly impacted the decisions
that followed including correcting non-existing problems in promotion and distribution, wrongly
applying a mass marketing operating style to Snapple, destroying Snapple’s offbeat brand image,
and thereby undermining Snapple’s competitive advantage. It is unlikely that Quaker could have
made a success of Snapple unless it somehow distanced the parent company from the Snapple
subsidiary and conducted business in an entirely different manner.
THEQUAKERDEBACLE

18. 18
THETRIARCACQUISITION:VALUABLELESSONS
Triarc successfully recovered the Snapple brand within just three years of stewardship, demonstrating a
clear passion and understanding for the quirky spirit of the brand, having already competed against Snapple
with Mistic. Triarc was able to capture and overcome several of Quaker’s challenges and failures with the
brand, which enabled the company to sell Snapple for a mass profit in 2000 at the price of $1 billion.
Blending the Brand with Corporate Culture
The Snapple brand was clearly incongruous with Quaker’s mainstream corporate culture. Triarc learned to
embrace the original vision of Snapple which Quaker had failed to do, and the brand quickly returned to a
highly profitable state. Quaker’s attempts to mold Snapple to fit its corporate image diminished the brand’s
unique features and value. Peltz, Weinstein and Gilbert at Triarc took a different approach, recognizing that
Snapple meant different things to different people (e.g. fun, fashionable, regular, quirky) - none of which
Quaker cultivated.
The key to success was in remaining true to the brand’s culture. Triarc’s managerial team rehired Wendy
Kaufman to be the “Snapple lady,” bringing back their authentic, endearing advertisement style. In addition,
Triarc ensured the product’s niche, quirky positioning was consistent in all aspects of the brand, this included
returning to the style and tone of advertisements, as well as reverting to the kitschy, cluttered style of the
packaging.
Triarc executives remained true to Snapple’s core values ensuring its eventual success.
Due Diligence
Quaker approached the Snapple acquisition with a level of overconfidence, miscalculating the potential
growth of the brand. Given their success with Gatorade, Quaker believed they had the formula for success
in the beverage category without considering brand specific factors and the emerging competitive
environment. Quaker needed another “win” product and erroneously thought that Snapple was the perfect
match, however the two beverages were dynamically different.
Triarc can learn from Quaker’s mismanagement of Snapple’s strong network of independent distributors.
From this mistake, Triarc can better understand how to build successful distribution partnerships that will be
mutually beneficial to both the Snapple brand, and the partners involved. This will not only improve the
effectiveness of the distribution process, but also contributes to the image of the company as caring and
good corporate citizens.
Quaker tried to fit Snapple into a textbook growth and marketing strategy which severely clashed with the
core values and attributes of the brand. There are several takeaways from Quaker’s strategic failures in
promotion, distribution and packaging, which Triarc can apply whilst developing a renewed growth plan for
Snapple.

19. 19
LEVERAGINGTRIARC’SCORECOMPETENCIES
Triarc Companies is an investment company with a long history of buying and selling troubled assets. Like
other companies Triarc had taken over, Snapple was a company in distress when Triarc management took
control of the once powerful brand (Funding Universe). Nelson Peltz, chairman and chief executive officer of
Triarc, said in a statement “Our Strategy at Triarc revolves around our ability to acquire brands and
combine them under talented management to deliver value to our shareholders. The acquisition of Snapple
fits very well into that overall objective” (Turcsik).
Leveraging Rich Experience in Beverage Industry
Before acquiring Snapple, other beverage brands such as Royal Crown and Mistic were under the operation
of Triarc. Experience with these brands gave Triarc a deep understanding of the beverage industry. Triarc
turned Mistic into a strong, direct competitor to Snapple; the brand was also a leader in the new age
beverage segment (Funding Universe). All this experience had enabled Triarc to know the new age
beverage segment well.
In addition, the experience Triarc had from recovering Mistic applies to Snapple. “In August 1995, we bought
Mistic,” said Martin M. Shea, Senior Vice President of Corporate Communications at Triarc. “We introduced
new graphics, and through our marketing organization, with new marketing plans, we turned it around. We
hope to use the same template for Snapple.” After acquiring the brand Mistic, which was suffering from a
somewhat tarnished image, Triarc restored profitability soon after gaining control of the company. In doing
so, the company demonstrated its talent for improving relations with distributors, its flair for marketing, and
its shrewdness in developing new products for an established brand (Turcsik).
Using Previously Acquired Knowledge in Distribution
Triarc had used a similar distribution strategy as pre-acquisition Snapple for Mistic, gaining experience and
relationships in the niche, independent network of distributors that had served Snapple well pre-acquisition.
Triarc knew Snapple had conflicts with the distributors and took advantage of this to gain a foothold in the
channels. Many of these distributors said they were so unsure of their future with the troubled Snapple that
they were refocusing their efforts onto competitors, including Mistic (Businessweek).
Triarc can apply this knowledge of the cold channel distribution system and relationships with distributors
where Snapple first found success, to relaunching the brand under their stewardship.
Management Experience
CEO of Triarc Mike Weinstein had strong experience in managing beverage brands such as A&W and Mistic,
both of which eventually turned into great profits. He had very good relationships with distributors. When
distributors were unsure about Snapple’s future and began to sell other brands, Mistic became popular as
Mistic had a strong promoter in Michael Weinstein. He was a popular figure among distributors
(Businessweek).

20. 20
OWN
IDENTIFY
WITH
VALUE
UNDERSTAND
Brand Positioning Risks & Rewards
A strong brand positioning allows a company to create a clear and concise image of what a brand stands
for. This also allows a company to strategically determine their target audience and provide a standard
for their product. On the contrary, with customer demands and expectations constantly changing perhaps
there is less risk to allowing customers to identify the brand themselves. Snapple must clearly examine the
risks and rewards involved with branding versus allowing their customer’s interpretations determine who
they are.
If Snapple chooses to leave their brand positioning up to interpretation there are a number of risks they
face. Firstly, this may establish ambiguity and a lack of clarity as to what the brand stands for. Without
this clear view of what they represent, unfavourable definitions may surface. “Positioning is the mental
space that we want to occupy in the customer’s mind about the brand” (Joseph). By clearly
understanding what your brand stands for it can then transfer to how you are perceived. This can help to
avoid any negative connotations or unfavourable opinions customers create on their own. Consumers like
to know what they are purchasing and purchase products that they can understand. They also are often
unsure of exactly what they want until they are presented with it. It becomes easier to simply be told. If
Snapple does not show evidence of understanding who they are themselves, then how can consumers
truly grasp it on their own.
SNAPPLE’SBRANDPOSITIONING:Risks
Brand positioning helps consumers to
understand, value, identify with, and ultimately
own their product. A brand positioning model
has been established indicating its importance.
(Gram) This model indicates the possible risks
that would coincide with allowing customers to
establish their own meanings of Snapple.
As previously mentioned, if a consumer does
not understand the product they are less likely
to follow the chain and value, identify with or
frequently purchase it.
Establishing a clear brand positioning can result
in brand loyalty and brand advocates.
If what Snapple stands for is up to continuous
interpretation it may discourage loyal Snapple
users. This may pose a serious risk. Without
a doubt, creating loyal brand users is desirable
for continuous sales and predictable profits.
If a customer consistently knows what to
expect then they will feel trust and loyalty
towards the brand. They know their brand
represents a promise. Allowing the image and
positioning to consistently change poses a threat that Snapple consumers will be
confused.
A risk also lies in an unclear and ever-changing target market. This relates back to brand loyalty. Having
a clear understanding of what your brand stands for assists in clearly identifying who you are targeting.
This prevents wasted funds attracting the wrong people and should ultimately lead to higher profits.

21. 21
There are also potential rewards for Snapple if they allow customers to make their own
interpretations of what they stand for. This may allow them to stay hip and trendy with the
ever-changing world of what is fashionable. This could potentially solidify them as a fashion brand.
This could also save resources that would be used on establishing themselves as a clear and concise
brand. In the fashion business, if what is popular is likely to change then it could become costly to
continuously use funds to confirm this.
This alternative allows the customer to ultimately decide who they are. If consumers are determining
who you are it saves the expenses of research and seeking to find who it is they want you to be. What
better way to reach your consumers than to allow them to identify you as they please. Although of
course this runs the risk of them viewing you in a negative manner. However, the nature of this
alternative allows Snapple to remain very adaptable. They can respond almost immediately to what the
customer is saying and how they are being viewed.
The alternative beverage category, and Snapple itself, represents an ambiguous category. They are
identified as in-between in regards to health, taste and category. If the category is quite ambiguous
then perhaps it is fair for people to view their brand as what it means to them. This in itself may act
as a brand position. It coincides with what their brand represents as well as their varying flavours for
varying palettes.
Snapple: A Fashion Brand
Mike Weinstein, CEO of Triarc Beverage Group explains that when it comes to Snapple, “we’re in a
fashion business here, and when your imagery isn’t fashionable, often that’s the end. (Deighton 1)”
Consumers are constantly searching for products and services that will help to create their ideal self.
They strive to find products that are cool, edgy, and will increase their social standing. Snapple is a
brand that consumers can turn to: it provides an alternative beverage that consumers feel fashionable
drinking. The all natural quality and quirky personality of the brand makes consumers feel like they
embody some of that spirit by drinking Snapple. Like fashion brands, Snapple also faces immense
pressure to innovate and stay ahead of trends. Consumer preferences are volatile and unpredictable;
therefore the brand must stay ahead to meet those changing needs. While it may be a beverage brand,
it possesses qualities of a fashion brand.
The Snapple brand is quirky and on the edge. It is fashion sensitive and authentic. The brand’s mantra
of “100% Natural” applies more to than just the product’s ingredients. Snapple is natural, real, personal
and encourages diversity and individualism. The Snapple community is inclusive and irreverent. Ken
Gilbert admits in the case that “Snapple users are very average, normal people but the brand helps
them to think of themselves as offbeat” (Deighton 8). This brand has a clear and distinct personality and
has established brand associations. The core values of the brand are relatable and shared by the loyal
customer base of Snapple.
Fashion brands are characterized by trends, hype and perceived quality. The face an immense amount
of scrutiny and criticism, much like Snapple does. Three core components of fashion brands are also
held by the Snapple brand. These include a strong brand personality, brand resonance, and an
emotional connection with Lovemark status. Consumer preferences change frequently and
unpredictably, therefore strength in these key areas ensures that fashion brands and Snapple can still
remain at the top of consumers’ minds.
SNAPPLE’SBRANDPOSITIONING:Rewards

22. 22
SNAPPLE:AFashionBRAND
A strong brand personality increases the value of a brand. It can be a way to create a competitive
advantage over other companies. By developing an essence, characteristics, and psychographic elements
to a brand, it creates a persona that can be relatable. Consumers find it easier to connect to a personality
than to a generic product. If a brand has personality, then consumers can start to build a relationship with
that brand and emulate that personality. Consumers are able to express themselves through the brand’s
offerings. Fashion brands are often aspirational in nature. They create a personality and lifestyle to which
their customers aspire to achieve. For example, famed fashion house Chanel has developed a personality
over the years that its customers desire to embody. The Chanel woman is classic, elegant, timeless and
feminine. She is wealthy and carries herself with style and grace. She has a luxurious lifestyle and enjoys
the finer things in life. The Chanel woman is fictional, however she is figure that women can aspire to
be. Snapple has also been successful in creating a brand personality and community around its brand. Its
consumers can relate to the quirky and offbeat nature of brand, and connect with the diverse and
irreverent community. Snapple is edgy, unique, and outspoken. Wendy Kaufman as the spokesperson
embodied the characteristics of the Snapple brand. She gave strength to the Snapple brand and put a
face to the name. Wendy was relatable, inspirational and personable. This strong personality increases
the value of the Snapple brand in the same way it does for fashion brands.
Additionally, brand resonance with fashion brands is similar to brand resonance with Snapple. For both,
salience is not good enough. A general knowledge of a brand will maybe stimulate recall, but that is not
good enough. Feelings and judgements about the brand are perhaps one step higher. However,
companies aim for the top, desiring to build relationships with their consumers. They want to establish
deep and long-lasting loyalty with their customers. When a company is able to establish a relationship
between brand and customer, they are building trust and
a meaningful connection. Fashion brands resonate with
consumers at all levels of the brand resonance pyramid
(refer to brand resonance exhibit/page #) However the
strong brands lie at the top of the pyramid, establishing
loyal relationships. Snapple holds a loyal customer base
and has been successful in establishing these meaningful
relationships. However, the brand has lost some of impact
and popularity is declining. Snapple needs to find a way
to stay at the top of the pyramid, strengthen ties to the
brand, and provide value and meaning to consumers.
Finally, the emotional connection that fashion brands
create with their consumers can sometimes reach
Lovemark levels. Marketing agency Saatchi & Saatchi
developed the concept of the Lovemark: brands that
deliver beyond the expectations of consumers. They
inspire, they reach the heart, and they are irreplaceable to the consumer. These brands establish deep
emotional connections to their consumers and become an important part of their lives (Saachi & Saachi
2013). Fashion brands become Lovemarks when consumers will go out of their way to shop in their store.
They wear them and feel like they fit in with the brand. These consumers can’t see their lives being the
same without their favourite brand of jeans or shoes in their life.

23. 23
Snapple should aspire to have their brand reach this Lovemark status. Snapple can be a brand
that breaks through clutter, and be the first in mind in the alternative beverage market.
However they need to reach the high love and high respect quadrant on the axis (see exhibit).
Snapple lost respect when Quaker changed its branding and what the brand stood for. The brand
needs to reconnect with the consumers they lost and strengthen their image. The brand is
beloved by many, and has potential to have high love, but it needs some more work to reach the
Lovemark status.
Overall, Snapple exhibits similar characteristics to fashion brands in the ways that they both
possess strong brand personalities, brand resonance, and potential for Lovemark status.
Snapple is a fashion brand, as it demonstrates volatility in relation to consumer behaviour.
Snapple needs to leverage their strengths in order to meet these changing needs and bring value
to their consumers. There must be something for consumers to connect with and a reason for
them to choose Snapple over any other beverage in the market. Consumers often do not know
what they want. Therefore Snapple needs to anticipate needs and shape what consumers want
in their minds.
SNAPPLE:AFashionBRAND

24. 24
Refocus Efforts on Recovering Snapple’s Previous Brand Image
Triarc has already taken the right initial first steps ordering the Cultural Logic of the Snapple Brand
report from Deutsch, Inc. This report allows Triarc to begin planning with a thorough understanding
of the brand, consumers, and surrounding environment which is essential for finding success with the
Snapple brand. We recommend restoring the key success factors with a sharp focus on the “100%
Natural” mantra that had guided the company prior to its acquisition.
Niche brands have unique associations which need to be preserved in order to foster loyalty and
growth. The diluted brand image and eroded loyalty is a consequence of Quaker’s mainstream
marketing and positioning strategy, and will need to be reversed in order to restore equity to the
brand. Triarc should focus on reinstating the unique, quirky aspects of the brand in order to increase
sales, rebuild profits and its consumer base.
Reinstate Independent Distribution Network
Acknowledge Quaker’s mistakes of pushing Snapple into the warm channel at the expense of cold
channel distribution. Snapple is a product that is most often sold cold in single servings, in small retail
channels rather than supermarkets. Triarc should focus efforts on rebuilding relationships for Snapple
with cold channel distributors by creating synergies with Mistic’s distribution.
That being said, in 1997, Triarc estimates placed Snapple at 35% of the total supermarket alternative
beverage category. With a $0.3 billion wholesale value the warm channel is not a distribution channel
that should be ignored, but should be tackled with a more measured approach that is appropriate for
the brand, the company and the distributors.
Define & Communicate100% Natural Positioning
In order for Snapple to improve its branding, the company should return to it roots and revive its
100% Natural brand. Over the years of management, the Snapple brand has seen many changes,
some for good and some with negative implications. The image of the brand has been damaged and
has resulted in less trust and respect for the company. Triarc has the ability to revive the Snapple
brand, through honest and transparent marketing initiatives. Going back to the authentic, real, and
quirky edge that the brand started with will give Snapple the best chance of getting back to its roots.
Snapple needs to clearly define what the brand represents and clearly communicate what its values
are. The brand should not be left open for interpretation. This would present a risk of skewed
perceptions and misrepresentation. Snapple has a charming story, rich history, and strong identity.
Triarc needs to put these strengths at centre stage and showcase the great brand that it is. Snapple
will only be successful if it leverages its strengths and explores some of the opportunities it has for
expansion.
TRIARC:RECOMMENDEDINITIATIVES

25. 25
Wendy Kaufman proved to be a strong spokesperson and personality for the Snapple brand. She was
as sassy and outspoken as the brand itself. It is recommended that Snapple find a new
spokesperson that is as authentic, real, and edgy as the original Wendy. Find someone that will
connect with the target audience of Snapple and bring character back to the brand. A spokesperson
will also give Snapple the ability to address the Quaker years. Instead of avoiding the marketing
blunders of those years, a spokesperson could be used to talk about those years with a
tongue-in-cheek attitude, and how Snapple is back and better than ever.
Since Snapple is seen as a fashion brand, Triarc needs to keep up with consumers, and listen to
what they want. It is essential that the brand reconnects with its consumers, and tries new methods
of communication to stay ahead. Keeping a finger on the pulse of consumers will ensure that their
wants and needs are met in a timely matter. Creating multi sensory experiences that go further than
their expectations will help to make Snapple a Lovemark brand.
Overall, Snapple should go back to the original branding that made it successful. Innovate the original
personality that Snapple started with. The brand can come back with an edgy, offbeat, and quirky
splash that their consumers will love.
TRIARC:RECOMMENDEDINITIATIVES

26. 26
“December 1994: The Acquisition of Snapple by Quaker Oats.” Case Studies of M & A Failures. Optimum
Capital. Web. 10 March 2013. www.optimumcapital.com/docs/Chapter10.pdf.
Deighton, John. “How Snapple Got Its Juice Back.” Harvard Business Review. Harvard Business Review,
Jan. 2002. Web. 8 Mar. 2013.
Dutton, Sarah. “Clinton’s 1993 Health Care Speech Had Little Impact.” CBS News. Web. 22 March 2013.
Goodman, Barak , prod. Frontline: The Merchants of Cool . Prod. Rachel Dretzin. 2001. Film. 10 Mar 2013.
<http://www.pbs.org/wgbh/pages/frontline/shows/cool/view/>.
Grams, Chris . “Why does brand positioning matter and what must change?.” Dark Matter Matters. N.p., 12
May 2011. Web. 18 Mar. 2013.
<http://darkmattermatters.com/2011/05/12/why-does-brand-positioning-matter-and-what-must-change/>.
Jackson, Stuart E. Where Value Hides: A New Way to Uncover Profitable Growth for Your Business. New
Jersey: John Wiley & Sons, 2007. Google Books. Web. 15 March 2013.
Joseph, Jim. “Why Brand Positioning Matters.” The Holmes Report. N.p., 18 Mar 2012. Web. Web. 18 Mar.
2013.
Saatchi & Saatchi. “Lovemarks: the future beyond brands.” Lovemarks: the future beyond brands. Web. 21
Mar. 2013.
Turner, Freda. “Reasons Why Mergers and Acquisitions Can Fail.” Jacksonville Business Journal. n.p. 28
August 2000. Web. 10 March 2013.
“Triarc Companies, Inc. History.” Fundinguniverse. N.p., n.d. Web.
<http://www.fundinguniverse.com/company-histories/triarc-companies-inc-history/>.
Turcsik, Richard. “ANALYSTS DESCRIBE TRIARC, SNAPPLE AS INTRIGUING FIT.” Supermarket News.
Supermarket News, 14 Apr. 1997. Web.
“Will Triarc Make Snapple Crackle?” Businessweek Archives. Businessweek Archives, n.d. Web. 11 March
2013.
Winer, Barry. Quaker Oats and Snapple. Case Study. City. Tuck School of Business at Dartmouth. 1996.
Web. 8 Mar. 2013.
Workscited