Magazine article Marketing

Will Snapple Crumble Here after US Dive?

Magazine article Marketing

Will Snapple Crumble Here after US Dive?

Article excerpt

With US sales down 17%, Snapple has seen better days. Now its UK performance looks rocky as rivals bite into the new age soft drinks sector.

When Quaker acquired Snapple at the end of last year, sales of the brand were already falling in the US. Six months later, and Quaker has not only failed to halt the decline, but has been dragged into the precipitous slide itself.

Results in the fourth quarter saw Quaker profits down by around $140m ([pounds]88m). Sales of Snapple over the first half of 1995 plummeted by 17%. In the US supermarket sector, the decline was even more marked, with sales dropping off by 25%.

Considering Quaker spent more than $1.7bn ([pounds]1.1 bn) buying Snapple and shed its petfood business to raise the cash, the figures can safely be described as disappointing.

In the US, where Snapple has around 2% of the total soft drinks market and spends $65m ([pounds]40m) on advertising, the brand has suffered the combined weight of a slowing market, post-acquisition distribution problems and a period of intense competition. The question is whether the UK will go the same way.

Snapple was launched in the US as long ago as 1972, and the UK marker is clearly at a very different stage of maturity. Nielsen suggests the new age market in this country was worth only around [pounds]1.7m over the past 12 months.

The brand set the agenda in the UK when it launched under the aegis of the Maison Caurette Group in 1993. The launch inside the M25, supported by ads from Banks Hoggins O'Shea, helped set the tone of the adult soft drinks market with a campaign using real-life shopkeepers extolling the virtues of the brand's natural ingredients.

New age warfare

But Snapple's problems are likely to build in the UK at a far earlier stage of its development than in the US. While it had a long head start at home, the brand in the UK and Europe is being forced to slug it out with the competition from the word go.

The heavyweight national launches of Fruitopia, Oasis and Schizan this year have transformed the market. At the end of 1993, Coke's chairman, Roberto Goizueta, told analysts the company would have a new policy of quick-fire, short-life products and Fruitopia bore the hallmark of that strategy when it launched two months ago with a [pounds]4m advertising splash.

TV work for Snapple, meanwhile, has disappeared and independent sources suggest that Fruitopia is outselling the brand by two-to-one. …

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