Consulta

Harvard Business School

9-599-126
Rev. October 13, 1999

You remember the ‘80s, Philip?
- Of course.
God hated the ‘80s.
- He didn’t like anything?
He liked Snapple.
- God liked Snapple?
Not all the flavors.
From a 1998 episode of Chicago Hope, a
network television drama.
Arnie Greenberg, Leonard Marsh and Hyman Golden had been friends since high school. In
1972, they went intobusiness selling all-natural apple juice to health food stores in Greenwich Village
under the brand name Snapple. By the late 1980s, their brand had achieved near-cult status on both
coasts of the United States, with its iced teas particularly in demand. It had taken 15 years, they said,
to become an overnight success.
In 1994 Quaker bought Snapple for $1.7 billion. The vision had been tocombine Snapple
with Gatorade, an earlier and very successful acquisition, to form a powerful beverage business unit.
Snapple, however, did not thrive: sales fell in each of the next four years, and in 1997 Quaker
despaired and sold the brand to Triarc Beverages for $300 million. In the fallout that followed, both
Quaker’s chairman of sixteen years and its president resigned.
Mike Weinstein, CEO ofTriarc Beverage Group, reflected on the acquisition. “At $300
million, Snapple is not a steal by any means. It’s in decline, and when that happens to a brand it’s
seldom that it comes back. We’re in a fashion business here, and when your imagery isn’t
fashionable often that’s the end. But we’ve talked to a lot of consumers and we did a lot of
qualitative research, and we’ve decided that inthis case the brand still has inherent strength. People
feel good about it. It will respond to the right marketing stuff.”

Professor John Deighton prepared this case as the basis for class discussion rather than to illustrate either effective or
ineffective handling of an administrative situation.
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Snapple

1972–1986: The Origins of the Brand
Arnie Greenberg’s family ran a sardine and pickle store in Ridgewood in Queens, NY. His
friends Leonard Marsh and Hyman Golden helped him in the store, and in turn he helped them to
manage their window-washing business. In the climate of the 1960s, Arnie encouraged the family to
stock health foods. The three saw thepopularity of natural no-preservative fruit juices in the store,
and teamed up with a California-based juice company to manufacture and distribute a bottled apple
drink. Eventually they broke away from the Californian partner and founded their own company,
Unadulterated Food Products, and the Snapple brand. “100% Natural” became Snapple’s mantra.
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The business grew slowly using internallygenerated funds. It outsourced production and
product development, and built a network of distributors across New York City. Where possible, it
sought individual distributors working for their own account, and found as a result
that the business needed to broaden the product line to keep distributors occupied. It
added carbonated drinks, fruit flavored iced teas, diet juices, seltzers, anisotonic
sports drink and even a Vitamin Supreme. Some succeeded and many failed, but
premium pricing on the successful products covered losses on the failures. Revenues
and profits grew with expansion of distribution into New Jersey and Pennsylvania.
In 1984 annual turnover was $4 million and it doubled by 1986 to $8 million.
In response to pleas from Snapple’s distributors, the founders...