Snap Back

by Gerry Khermouch

AFTER QUAKER OATS' COLOSSAL FUMBLE OF SNAPPLE, WEINSTEIN AND GILBERT PICKED UP THE BALL AND RAN WITH IT. THEIR NEW PRODUCTS AND DEFT PROMOTIONS HAVE THE BRAND GROWING AGAIN.

So-called "new age" beverages just may be ground zero for guerrilla marketing: the premium is on creating a buzz, deft tactical maneuvering often prevails over grandly orchestrated strategies, and that old marketing standby, TV advertising, won't necessarily get you anywhere, even if you can afford it.

That may have been one of the cultural schisms that the savvy marketer of Gatorade, Quaker Oats, ran up against in its disastrous stewardship of the Snapple beverage brand, which resulted in a fire sale to Triarc for $300 million and a stunning $1.4 million writeoff in 1997. And it seems to be one reason that two years later, the brand is thriving again at Triarc Beverage, a pressure cooker of a company in White Plains, N.Y., that seems to operate on gut instinct--and plain guts--as much as it does on brains and process.

At the heart of the transformation have been a beverage lifer, CEO Mike Weinstein, and his ally of 12 years from the agency side of the business, svpmarketing Ken Gilbert, a pair whose humorously self-deprecating tone and spirited kibbitzing can disguise the intensity with which they have run the organization. Weinstein, 50, and Gilbert, 49, have known each other since Gilbert worked on the Squirt account that Weinstein managed at A&W Brands.

The Snapple turnaround, allowed Weinstein, "is one of the few times in my career that I created a plan, followed it and it worked. We were able to rebuild distribution, create new-product excitement and get the base business back on line. At the end of the day, consumers began to hear good things again about Snapple. The lesson is that a brand is a complex thing and you can't push one button to fix the problem."

Weinstein and Gilbert started pushing buttons immediately upon acquiring the brand in the spring of 1997--terrible timing, since the crucial summer season was right upon them--organizing a hasty series of pr stunts, line extensions and promotional packages that were not necessarily expected to create long-term value for the brand, but might generate enough excitement to get disillusioned wholesalers and retailers working the brand again. Former mascot Wendy "The Snapple Lady" Kaufman, after having been abruptly dismissed by Quaker, was summoned back with an impromptu parade down New York's Fifth Avenue and given a starring role in a commemorative drink called Wendy's Tropical Inspiration. New agency Deutsch, New York, cobbled together a commercial depicting Wendy returning from a desert isle that, for all its constraints, is still considered by some wholesalers to represent Deutsch's most loose, liberated work on the brand. Throw in a gaggle of green teas, 100% juices and other modest new entries, and the br and gave off the sense that important things were about to happen again.

While Weinstein now refers to that as the "smoke and mirrors" phase, it succeeded in just six months in stemming what had been a 20% rate of decline under Quaker. Although Triarc execs publicly trumpeted the improving trend as a turnaround, they realized that the real work of getting the 50 million-case brand growing again still lay ahead.

One of the first longer-term moves the team undertook was to undo a repackaging of the brand under Quaker that one Triarc exec, at the time of the acquisition, had derided as resembling "body parts in caramel," in reference to the weirdly unnatural, airbrushed-looking fruit surrounded by a viscous-looking tea "splash" that more closely resembled a mud puddle. While the original packaging, with its quirky etching of the Boston Tea Party, had been long overdue for a remake, Triarc and design shop Coleman Group, New York, harnessed traditional American woodcut-style imagery to arrive at a label that looked homespun, yet carried shelf impact and helped consumers more easily sort out the range of tea and fruit sublines in diet and full-calorie versions.

Meanwhile, Triarc development people were scrambling to come up with new beverage "platforms" that might really move the sales needle. One that proved crucial in re-establishing the brand's new-product credentials came from a technology pitched by a supplier. Triarc execs decided it could work well for a bottled smoothie that, unlike some existing entries, would not need to employ gums as a thickener to attain a smoothie-like consistency.

After deciding that the Snapple brand was flexible enough to be extended into that segment, Triarc execs, working with New Jersey packaging consultant IDI, came up with a swirlie bottle reminiscent of custard that they clothed in an opaque "fullwrap" label and called Whipper Snapple. It immediately clicked with wholesalers and consumers, and proved one of the beverage hits of 1998.

Triarc was able to repeat the stunt this year, responding to the momentum of an herbally infused line from rival SoBe with Elements, packaged in a curvy bottle and cloaked in mystique thanks to provocative flavor names like "Fire" and "Rain" and exotic ingredients like dragonfruit. Though some initially derided the launch either as a copycat product or a tactical move to block Snapple distributors from picking up SoBe, that brand, too, proved an immediate hit.

Throw in oddball promotions--"Win Nothing Instantly," "The Joke's on Us"--deemed in keeping with Snapple's gently antiestablishment ethos, and many in the beverage industry feel that the brand may have a future after all, in a segment where wholesaler consolidations and the increasing market clout of Coke and Pepsi have made survival by independents tenuous.

The achievement is the more impressive because it means that Triarc prevailed in resisting early pressure from some bottlers to begin offering cheaper-to-produce, preservative-filled "cold-filled" drinks, a gambit that would have run the serious risk of undermining the "all natural" premise upon which the Snapple and Mistic brands were built and eroding their ability to command a premium price at retail. That's the path that Triarc's larger rivals, notably Coca-Cola and Pepsi-Cola, have taken after struggling with their own all-natural, "hot-filled" teas and juice drinks. The cold-filled versions offer the advantages of being cheaper to make and more easily fitting into the existing production and merchandising operations of soft-drink bottlers, but might have had disastrous effects if undertaken with Snapple.

Although Triarc execs debated the matter carefully, "It would have been a major mistake, because one of the things we learned early was that people were looking to Snapple to get back to basics, and the core of the positioning is 'all-natural,'" Gilbert said. "We could not have done anything worse for Snapple than go to cold-fill."

For his part, Weinstein maintains that the two categories--all-natural "premium" beverages and cold-filled beverages--should be able to co-exist. "It's not so much a question of rejecting cold-fill drinks, because many Snapple users drink carbonated beverages or Lipton Brisk," he said. "But there are times, as with the wine and beer industry, that people want a higher-quality product."

Like many of the fundamentals of the business they're in, both Weinstein and Gilbert constitute a set of paradoxes, mixing the gentleman on the one hand and the street fighter on the other.

Weinstein has spent essentially his entire career in beverages, starting at Pepsi and achieving his big payday when A&W Brands, which he led, sold out to Cadbury Schweppes in 1994. With the A&W deal having left him financially secure, the beverage obsessive, Weinstein--with an e-mail tag of "MikeSoda"--set up a consultancy called Liquid Logic, but was given to joking that he spent most of his days lounging around his Westchester County home absorbing developments in the O.J. Simpson trial. Thus, when financiers Nelson Pelz and Peter May added new age pioneer Mistic to a Triarc portfolio that already included Royal Crown's cola brands, it didn't take much to lure Weinstein in to run it. He relocated Mistic to the same White Plains office building from which he had run A&W Since the Snapple acquisition, the staff there has burgeoned.