CHICAGO -- Quaker Oats Co. here is betting that a more understanding independent distributor network, along with new flavors, advertising and packaging, and a site on the World Wide Web, will snap its Snapple beverage line out of the sales doldrums it experienced last summer.
When Quaker acquired the brand last year, it attempted to fold much of Snapple's supermarket distribution in with its successful Gatorade brand. The move was met with stiff opposition by Snapple's distributors, who feared losing the lucrative supermarket routes to giant food brokers.
Snapple's worldwide sales plunged 10% in 1995 due to several reasons: the internal turmoil, the maturation of the category, delays in getting new products to market because of the sale's late closing, and the introduction of the Lipton and Fruitopia brands by Pepsi and Coca-Cola, respectively. Margaret Stender, vice president of marketing for the Snapple brand, told Brand Marketing that this year Snapple will seek to build its market shares in the central areas of the country where the brand is currently underrepresented.
"It is our strong desire for Snapple to become a strong national brand, and it is well on its way to doing that," she said.
"We have very capable distributors in all 50 states. What we're really doing now is putting a real innovative growth plan together with those distributors in the areas where the brand is underdeveloped."
Stender said Quaker creates individual sales plans for its distributors according to stockkeeping unit mixes, programming, shelving standards, in-store merchandising, etc.
"We have about 295 distributors and we actually write a plan with every single one of them that is very tailored to their market, their needs and their capabilities. It is usually quite integrated," she said.
Patti Jo Sinopoli, spokeswoman for Quaker Beverage North America here, told Brand Marketing that even though this summer the beverage marketer is using the same distributors for Snapple, it is expecting a much rosier scenario than what happened in 1995.
"The difference [in distribution] is that our relationship with those distributors is much better mutual understanding of what each of our roles are in moving the business forward," she said.
"There is a better understanding among the Snapple distributors of Quaker's desire to want to work closely with the distributors. There was unfounded fear early on that we might have done things that would have diminished their already great success with the brand," she explained.
"There was also a lack of understanding among many of them that Snapple was sorely in need of a greater infrastructure than had existed under the original entrepreneurs," Sinopoli said.
Stender said a major problem Quaker encountered with Snapple when it acquired the brand in January 1995 was that the previous owners did not have a summer marketing program in place.
"We couldn't get plans into the marketplace until pretty late. In the beverage business, if you miss April and May, you might as well not bother to show up," she said.
For the summer 1996 season, Quaker had a distributor kick-off meeting in October where it unveiled its marketing plans, Stender said.
"In November and December, our whole system worked with the distributors to create their plan. Now we are really selling those plans into our customers. We are literally six to eight months ahead of where we were last year at this time, and we think that will have a huge impact on how we get to market," she said.
Sinopoli said both Quaker and its distributors have learned from the mistakes of last summer.
"Certainly Quaker is a hell of a lot smarter than we were a year ago. From a distribution standpoint and a consumer offering standpoint, we're in much, much better standing than we were a year ago," Sinopoli said, noting it took a while for Quaker to earn the distributors' trust.
"It became clear that we were there to work with them and support the distributor family and that we were going to give them the marketing materials and the tools, and that they in turn were responsible for delivering the distribution and in-market execution," Sinopoli said.
In an attempt to win back market share, Snapple has introduced more unique flavors, such as the Samoan Splash and Papaya Colada added to its Island Cocktail line, and a peach lemonade.
For 1996, Snapple has repackaged its diet line of three teas, two juices and a pink lemonade. They now have a more significant "diet" call-out on the label, and the individual flavors are more extensively highlighted.
Snapple has also introduced 32- and 64-ounce polyethylene terephthalate bottles for many of its products, and has also introduced a 12-pack of its single-serve glass bottles.
This month Snapple is launching a major $30 million
to $40 million "under-the-cap" promotion called A Snapple A Day that rewards drinkers with 15,729 prizes.
"This one-month promotion is the most integrated promotion, and the first under-the-cap promotion, that Snapple has ever done," said Jeff Lime, assistant marketing manager.
"Our prizes have a thematic link, including trips for two to Bali, trips to Paris, and a red Mustang convertible that is symbolic of cherry lemonade," he said.
To further promote the brand, Lime said, Quaker established the "Land of Snapple" site on the World Wide Web.
"We think that the Web site has been very successful. We want to be on the Internet to provide content and product information to our consumers. We are receiving in the neighborhood of 100,000 hits a month," he said.
While some supermarket shipments of the quart and half-gallon bottles of Snapple may go directly to supermarket warehouses, the majority of Snapple products will still be delivered using the independent distributor network, Sinopoli said.
Quaker has learned that the independent distributor network can offer marketing advantages that would be missed through a warehouse-only system, she added. "With direct store delivery, you have more control over the warehouse, merchandising and promotion of your product at the point of sale because your own people are calling on those accounts and setting shelves. In the case of warehouse-delivered products, you are relying on the retailer to do that on your behalf. There is also the opportunity to reach broader points of availability, such as delis and other options of distribution beyond the supermarkets, mass merchants and convenience stores," she said.