Snapple: the worst acquisition

In the late 1980s, soft drinks took grip on America. Pepsi had Michael Jackson and Coke replaced “New Coke” with their original formula under the name “Coca-Cola Classic”. Snapple was growing rapidly and Quaker just built the Gatorade empire using textbook business strategy. In the early 90s, Quaker acquired Snapple in what marketers refer to as the worst acquisition of all time.

Snapple introduced new flavors that people didn’t buy. Their core following bought Peach Tea, Grapefruit Tea, and Half & Half Tea and Lemonade. But you couldn’t buy them because the store had to make room for Snapple’s Fruit Punch and Strawberry Tea flavors. Snapple stretched their popular flavors thin on the shelves. Then there were shortages on shelves and in distribution, which forced long-time Snapple drinkers to switch to Arizona Tea.

Snapple designed larger bottle options but people didn’t buy them. It makes sense for larger Gatorade bottles because you drink it when you are active. But Snapple is bought by people in convenience stores on their break. 16oz were plenty. And the new designs were boring and corporate compared to the old artwork.

You can’t grow by neglecting your core audience. Design for the people who meet your bottom line and get excited about your products. You don’t want to be like Quaker and lose $1.4 billion.