How Quaker Broke the Brand
When you try to force a brand to be something counterintuitive to its big idea disaster follows. Brand research determines success or failure during a rebranding. Quaker Oats failure to understand and work with the big idea and brand image of Snapple is what makes its acquisition and attempted rebranding of the company a perfect branding disaster.
In 1993 Quaker paid $1.7 billion for Snapple, in just five years Quaker sold Snapple to Triarc Beverages for just $300 million, a loss of 1.4 billion dollars. When it first purchased Snapple, Quaker had an impressive background in beverage marketing, having developed Gatorade into a powerhouse national brand by skillfully executing a plan drawn straight from a marketing textbook.
After purchasing the sports drink from Stokely–Van Camp in 1983, Quaker introduced it into 26 foreign markets, added a variety of flavors and brought on Michael Jordan as a spokesperson. These textbook actions produced textbook results; Gatorade sales shot from $100 million to $1 billion in ten years, this success left Quaker’s executives confident they could produce similar results with Snapple.
But the Snapple and Gatorade brands were night and day. Gatorade was about the sport, the competition, the drive to win. You can have fun with Gatorade, but only after you’ve won. Quaker’s corporate temperament was a perfect fit for Gatorade’s achievement-oriented brand identity. While Snapple on the other hand was a brand all about quirk, with a messaging and marketing strategy reflecting that.
Snapple originated in an increasingly health conscious New York and stood out from its competitors with an endearing sense of amateurish authenticity. The labels on the bottles were cluttered, and the ads seemed almost homemade. In one commercial, tennis star Ivan Lendl garbled the brand name into “Shnahpple,” Several others featured a Snapple order-processing clerk named Wendy Kaufman. Wendy was Bright, Cheerful, with a demeanor reminiscent of a slightly kooky aunt and a paint peeling New York accent. Wendy blossomed into a minor celebrity known to her fans as the Snapple Lady.
Gatorade and Snapple’s opposing brand identities were also reflected in their distribution strategy. Gatorades distribution like its branding was straight out of a marketing textbook. With Quaker using its leverage with supermarkets to win premium display space and squeeze costs out of the supply chain. But Snapple’s distribution channels were as unconventional as its promotions.
Initially Snapple had very little supermarket coverage. Instead, it flowed through the “cold channel,” with small distributors serving hundreds of thousands of lunch counters and delis, which sold single-serving refrigerated beverages consumed on the premises. Small as the individual distributors were, collectively they were a force not to be taken lightly. By 1994, Snapple was available across the country, with distributors painstakingly cultivating supermarket accounts that ballooned Snapple’s sales from $4 million to over $674 million.
Quaker thought that because they had done it with Gatorade they could do it with Snapple and their failure to understand the difference between the two brand identities cost them dearly. Just as it had done with Gatorade, Quaker introduced Snapple in larger, more profitable sizes: with 32- and 64-ounce bottles, supplying them to supermarkets and attempting drop the “cold channel” distributers who had worked to build Snapple up, offending them in the process and effectively slashing sales.
But consumers didn’t want to go to the supermarket for Snapple or care about larger sizes and bulk packaging. Snapple was a lunchtime beverage — people weren’t looking for anything larger than a 16-ounce bottle they could finish in one sitting. The larger bottles were suitable for Gatorade because people tended to drink it during or after team practice or other exercise, when they were especially thirsty and needed to be rehydrated.
The company next tried to rebrand Snapple in the style of Gatorade running, ads whose mainstream blandness and slick production values were a complete contradiction of Snapple’s positioning and brand image. It then compounded the misstep by dropping Wendy the Snapple Lady from the ads and eliminated her job, alienating brand loyal consumers in the process. In going against the brand and relationship with consumers and distributors that Snapple had built, Quaker raised the brand to the ground.
Quaker’s failure to understand Snapple as a brand from its demographics to its big idea is a cautionary tale of branding and a lesson that when conducting a rebrand any good marketing agency needs to have a brand research stage. A thorough study of what the brand is and what it represents, including; strengths, weaknesses, tone and big idea. Always do this research before conducting a rebrand or get someone who knows rebranding to do it for you.
