Snapple 's Acquisition Of Snapple Essay

1133 Words Oct 20th, 2016 5 Pages
Snapple was launched in 1972 in the Greenwich Village area of New York City with its founding product being an all-natural apple juice targeted to health conscious consumers. Over the next 15 years, Snapple grew slowly yet still managed to established markets on both the east and west coasts of the U.S. In the late 1980’s, with revenues reaching about $8 million in 1986, Snapple engaged a beverage industry sales and marketing veteran to professionally manage its next growth trajectory. By establishing a $1 million advertising budget and focusing on strengthening its east coast independent distribution channels, Snapple grew its revenues tenfold to $80 million by 1989. Revenues subsequently reached $231 million in 1992 and Snapple was first sold to the Thomas H. Lee Company. Two years later in 1994 with Snapple generating $674 million, Quaker Oats acquired Snapple from Thomas H. Lee Co. for $1.7 billion. Quaker’s acquisition of Snapple was envisioned as a complimentary beverage to its Gatorade brand of sports drink, with each brand intended to fill Quaker’s product distribution and marketing gaps. Quaker’s development and expansion of the Gatorade brand in the marketplace found success with about 60% of Gatorade revenues streaming from so-called “warm channel” distribution systems that were predominantly supermarket type retail outlets. Snapple, on the other hand, had established a strong presence in the complimentary “cold channel” distribution areas that included…

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