Quaker’s purchase of Snapple

1994-1997

In 1994, grocery store legend Quaker Oats purchased the new-kid-on-the-block, Snapple, for $1.7 billion. Fresh from their success with Gatorade, Quaker Oats wanted to make Snapple drinks just as popular. Despite criticisms from Wall Street that they paid $1 billion too much for the fruity drinks, Quaker Oats dove head-first into a new marketing campaign and set out to bring Snapple to every grocery store and chain restaurant they could.

However, their efforts failed miserably. Snapple had become so successful because they marketed to small, independent stores; the brand just couldn’t hold its own in large grocery stores and other retailers nationally. Pepsi and Coca-Cola themselves began releasing Snapple-like drinks and the general public’s new-found taste for Snapple beverages was beginning to wane. After just 27 months, Quaker Oats sold Snapple for $300 million (or, for those of you doing the math, a loss of $1.6 million for each day that the company owned Snapple). CEO William Smithsburg’s reputation was forever tarnished, and numerous executives were fired.

References:
Harvard Business Review - How Snapple Got Its Juice Back