‘100 % NATURAL’

Section D ROHAN (2011159) SAHIL JOSHI (2011163) SAVI (2011172) SHARAD (2011177) SIDDHARTH JAIN (2011189)

INTRODUCTION

In 1972, Arnie Greenberg, Leonard Marsh and Hyman Goldman started their own company ‘SNAPPLE.’

The business became well established with its unconventional marketing strategies .

Quaker bought it in 1994 for $1.7bn Things didn’t came up to the expectations

such that it had to sell it to Triarc Beverage Group at$ 300mn in 1997.

SNAPPLE AS A BRAND

• 100% Natural.• Used Real people and incidences in

advertisements.• A Fashion Brand including fun for

people giving vivid sensory experiences.

• Quirky & Offbeat.• Sense of Modernity.• Drink for everyone with lips.

PERIOD

1972-1986

THE ORIGIN OF

THE BRAND

“SNAPPLE”100%

NATURAL

OWNERSHIP

Arnie Greenberg,

Leonard Marsh and Hyman

Golden.

SALES FIGURE

• The three brought up their own company “UNADULTERATEDFOOD PRODUCTS” to sell bottled 100%natural apple juice under the brand of Snapple .

• In 1984 annual turnover was $4 million and it doubled by 1986 to $8 mn.

CHANGES

• As per the needs they added carbonated drinks, fruit-flavored iced tea, diet juices, seltzers, an isotonic sports drink..etc.

• The idea of featuring ‘Iven Lendl’ in several ads also didn’t come quite off . He kept mispronouncing the name as “ shnapple’.

GROWTH OF SNAPPLE

PERIOD

1987-1993

THE GLORY YEARS

OWNERSHIP

• In 1992 the three handed over the control to The Boston private investment bank –THE THOMAS H. LEE CO.

SALES FIGURE

• The distribution system of snapple grew to 300 small, predominantly family owned distribution servicing convenience chains.• Boston beer distribution grew the sales volume from 2,50,000 cases up to 1 mn cases a year.• Supermarkets accounted for about 20% of Snapple's sales.• Sales grew from $80 million to $231 million in 1992 & $516 million in 1993.

CHANGES

• They hired Carl Gilman to run sales and marketing , and also to improve Snapple's label design. He increased advertising budget to $1 million &intensified independent distributor system.

• Advertising agency Kirshenbaum, Bond & Partners represented Wendy Kaufman as a spokes model for the brand.

• Also the company sponsored two very popular Radio programs of 1980s to strenghten the brand.

PERIOD

1994-1997

QUAKER TAKES

COMMAND

OWNERSHIP

• Quaker Oats acquired snapple with running sales of $674 million for $1.7 billion cash from Thomas H. LEE Company.

SALES FIGURE

• Quaker ‘s aim was to convert snapple from a fashion brand to a lifestyle one but the strategy didn’t worked and sales declined from $674 mn to $440 mn.

CHANGES

• They thought of creating the most innovative distribution system in the beverage industry. The advantage being customer will be able to buy products of snapple in many more locations than they did.

• Quaker sought to eliminate the substantial cost of middleman in snapple’s warm channel by shipping direct from factory to supermarket.

TRIARC ACQUISITION

In March 1997 Triarc Beverage Group acquired

Snapple from Quaker for $300mn.

Mike Weinstien ,CEO of Triarc Beverage Group

along with Ken Gilbert, senior VC of marketing

at Triarc set their priorities for reviving the

brand.

Developing on the idea

z GROWTH OF SNAPPLE$

Mill

ions

0

100

200

300

400

700

600

500

1974

1976

1988

1978

1996

1980

1986

1984

1992

1990

1994

1982

1972

BEVERAGE CATEGORIES

16%

19%

24%

24%

17%

Sales

Sports Drink(16%)Bottled Drink(19%)Non Premium(24%)Premium(24%)100% Juice

SUPERMARKET

35%

29%

11%

9%

4%12%

Snapple (35%)All Others (29%)Arizona (11%)Lipton (9%)NesteaOcean Spray (12%)

DILEMMA's

Transition from Fashion Brand to Life style Brand brought a severe change in the value proposition of Snapple.

•The change in sales channel of Snapple, lead to the disturbance in supply chain of the company.

•It was now with the Triarc to revive Snapple’s image and tackle with other competetive brands.

MARETING STRATEGY

Triarc named Mike Weinstein as CEO of its beverages division and

Ken Gilbert as senior VC of marketing to access the Snapple’s

situation and set priorities to revitalize the brand.

The study made by Deustch inc.(Snapple’s Advertising Agency)

provided Triarc a new track to walk on and revitalize their brand. It

was then they decided to come up with product development in

house rather than going on with the consumer research. They made

product first and then came up with market segmentation.

SOLUTIONS

• They must concentrate on the brand strength ‘Snapple’ .

to come up with new marketing strategy so as to strengthen

the present distribution system of the product.

• Come up with new variants as and when required.

• To come with visible changes in the packaging from time to

time.

• To come up with new offers at the same time maintain the

quality of the product.

• Rather than only focusing towards the youth they should think

of targeting towards other sections of the society also, like

come up with new products for children, old men, athletes etc.

CURRENT SCENARIO

• Triarc sold it to Cadbury Schweppes for $1.45 billion in September

2000. It was spun off in May 2008 to Dr Pepper Snapple Group

Starting in May 2009, Snapple was made with sugar, not high

fructose corn syrup. However, in certain areas, the old Snapple is

being sold in stores, although is becoming more and more rare

• In 2009, a consumer lawsuit was brought against Snapple. The suit

alleges that the manufacturer's marketing use of the words "all

natural" is fraudulent because the drink is made with corn syrup.

The complaint also raises the issue of Snapple drink names

including fruits when the products do not contain those fruits