Triarc Companies, Inc.

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Triarc Companies, Inc.

280 Park Ave.
New York, New York 10017
USA
Telephone: (212) 451-3000
Fax: (212) 451-3134
Web site: www.snapple.com

RETURN OF THE SNAPPLE LADY CAMPAIGN

OVERVIEW

On June 5, 1997, Wendy Kaufman, known to millions of consumers as "the Snapple Lady," was welcomed back as a brand spokesperson after an almost two-year hiatus. The move completed a circle of sorts for Snapple, a brewer of iced teas and fruit flavored beverages that just three months earlier had been purchased by the Triarc Beverage Group. A stormy period of declining sales as a subsidiary of the Quaker Oats Company—during which the highly popular Snapple Lady was ushered out of the spotlight—was now over, and Snapple was in a mood to celebrate.

The Kaufman announcement was made in midtown Manhattan in New York City with style, flair, and a healthy dose of kitsch, all trademarks of the Snapple brand. Triarc retooled an empty storefront at 319 Fifth Avenue (at the corner of 32nd Street) to resemble an old-fashioned New York deli. Mike Weinstein, chief executive officer of the Triarc Beverage Group, stood up to welcome the media, distributors, and invited guests. Then Kaufman, escorted by several Snapple trucks, drove up to the "deli" on a parade float modeled to replicate the label of Snapple Orange Tropic, the new drink the company had formulated to commemorate her return. Kaufman then burst into the press conference to announce that she was, in fact, reunited with Snapple. A video of her latest Snapple television commercial was then played for the invited guests.

The commercial and the campaign were designed to return Snapple to its roots. This was an important strategy for a brand that had seen its sales decline by 21 percent during two years of Quaker Oats management. Triarc executives hoped the return of the Snapple Lady would energize the brand and once again put it in the forefront of American consumer consciousness.

The stakes were high for the new campaign. Triarc Companies, a holding company whose subsidiaries were engaged in beverages, restaurants, and propane distribution, spent $300 million in March 1997 to secure control of Snapple from Quaker Oats Company, the maker of Gatorade, Cap'n Crunch, and Rice-a-Roni brands. The acquisition added to the company's beverage interests, which also included subsidiaries Mistic Beverages and Stewart's. The company was also the franchiser for more than 3,000 Arby's fast-food restaurants. In addition, Triarc owned 43 percent of National Propane Partners.

HISTORICAL CONTEXT

Founded in 1972 in Brooklyn, New York, Snapple began as a natural soda sold in health food stores. By the early 1980s the line had expanded to include fruit flavors with evocative names like Mango Madness and Tropical Fantasy. Later the company added a line of bottled teas as well. On its packaging Snapple emphasized the "natural" aspects of its beverages. The brand attracted a loyal following, particularly among college students and hip young professionals. Other companies soon moved to market similar products. By the end of the 1980s the so-called "New Age drink" market was growing briskly at 50 to 100 percent a year.

Kaufman became known as the Snapple Lady, answering mail for the Long Island-based beverage company. Majoring in film and sociology at Syracuse University, Kaufman spent eight years of dispatching trucks at her father's metal warehouse before getting a job in Snapple's order department in 1991. Having learned the workings of the beverage business, Kaufman started personally to answer consumers' letters to Snapple headquarters. Her oft-stated sentiment was that if people cared enough about Snapple to take time to write to the company, the company owed it to the consumers to respond. The company, which traded on a folksy image, decided to incorporate Kaufman into its ad campaign in 1993, and 36 award-winning television commercials between 1993 and early 1996 would ensue.

The spots were decidedly low-concept. In most of them Kaufman simply sat behind a desk and answered letters from Snapple consumers. "Hi and hello from Snapple," she predictably announced in her Long Island accent. Yet something about her authenticity and sense of humor struck a chord with audiences across the country. "I don't play the part, I am the part," she once observed, and Snapple drinkers embraced her as a company spokesperson they could relate to. As Snapple's "ambassador of goodwill," Kaufman did more than just appear in television commercials. She traveled the country performing promotional activities for the company, such as attending a prom with a New Jersey fan and dancing with the Los Angeles Classical Ballet. She even took a whirlpool bath in kiwi strawberry flavored Snapple in order to promote that new drink.

The "Snapple Lady" campaign came during a time of enormous growth for the brand. Between 1989 and1993 Snapple sales rose from $23.6 million to $516 million. The ads and promotional activities made Kaufman a minor celebrity. She appeared on television talk shows like Oprah, Regis and Kathy Lee, and The Rosie O'Donnell Show. But her time in the national spotlight would run out when cereal giant Quaker Oats bought Snapple for $1.7 billion in December 1994.

There were ominous portents almost as soon as the Quaker Oats acquisition was completed. Some analysts noted that the allure of the so-called New Age beverages, which had gained popularity across the country, was fading at the time. Quaker Oats then compounded its troubles by trying to meld the Snapple distribution network into its top-selling Gatorade network, which did not go over well with distributors.

Quaker Oats then gave the green light to a series of new television commercials, dismissing Snapple Lady Kaufman just months before the expiration of her contract. The new spots, launched in April 1996, followed a four-month television advertising blackout, during which time Quaker Oats worked intensely to develop a new strategy for the struggling brand. For the first commercials of this campaign, created by agency Kirshenbaum, Bond & Partners, the iced tea and juice marketer tapped filmmaker Spike Lee to helm one of five new television spots. Echoing the old "We Try Harder" campaign for Avis Rent-a-Car, the new Snapple spots trumpeted the fact that while Snapple was not in the same league as soft-drink giants Coca-Cola or Pepsi-Cola, it would be happy as a high-ranking also-ran. "Threedom Equals Freedom" and "We Want to Be No. 3" were the tag lines for the spots. Some viewers were confused by the abruptness of the Snapple Lady's departure from the scene. Neither Quaker Oats nor Spike Lee offered any explanation for the change. "She had her run," said Lee.

While being proud to be third might have sufficed as a quirky campaign mantra, it proved unsuccessful as a market proposition. The campaign left consumers confused about the brand's identity, and Snapple took a beating from competitors who saw its problems as an opportunity to pour new products onto the market. The high-priced ads did nothing to slow the erosion in Snapple sales. Quaker Oats executives ultimately were forced to try giving the drink away in a $40 million summer campaign to try to lure skeptical consumers back to the brand. Despite these efforts, Snapple endured a $100 million loss in 1996.

In March 1997 Quaker Oats sold Snapple to Triarc Companies, Inc,. for less than one-fourth of what it had paid for the brand. The diminution was a result of losses that totaled $160 million in 1995 and 1996 alone and sales that dropped 21 percent in two years to $550 million. Triarc Companies, Inc., was perhaps ideally suited to try to revive the sagging fortunes of Snapple. Best known for its RC Cola brand, subsidiary Royal Crown Company made flavor concentrates for private-label soft drinks. The company was run by financiers Nelson Peltz and Peter May, who profited from several large investments in the 1980s. The pair eventually bought a controlling stake in Triarc, an industrial conglomerate then known as DWG Corp., from financier Victor Posner in 1993 for $71.8 million. In the 1990s Triarc began to focus on beverages and restaurants, purchasing the Mistic teas and juice drinks and the T. J. Cinnamons restaurant chain. It operated almost 3,000 restaurants, including Arby's and P. T. Noodles.

One of Triarc's first orders of business was to renew its association with Kaufman, and the beloved Snapple Lady was soon appearing in Snapple ads once again. In addition, a new Snapple flavor, Snapple Orange Tropic, was developed as part of a new line dubbed Wendy's Tropical Inspiration. Calling Kaufman "the embodiment of Snapple's lovable, offbeat nature," company officials appointed her to the newly created post of Snapple Ambassador for Community Relations.

TARGET MARKET

The New Age segment of the beverage category began as an alternative to highly carbonated soft drinks, offering iced teas, fruit-based beverages, and flavored waters in the 1980s. In the 1990s new New Age alternatives included caffeinated waters, herbal concoctions, and "premium" sodas with less sweetness and carbonation. By this time non-colas had grown to command more than 60 percent of the soft-drink market.

Snapple was created by a trio of marketers from Long Island: Leonard Marsh and Hyman Golden, brothers-in-law who owned a window-washing company; and Arnold Greenberg, who had a health food store. Because the three did not have the financial clout of the big soft-drink makers, they marketed mainly to small stores. Along the way their beverage developed a cachet among the young and trendy. This sought-after cachet was encouraged with clever advertising and the constant introduction of new, offbeat flavors. In the late 1990s Snapple continued to market its products to those young and health-conscious consumers who preferred an alternative to colas.

COMPETITION

Beverage industry giants Coca-Cola and Pepsi were to a large degree responsible for the slump in sales in the New Age beverage category that betokened the sale of Snapple to Triarc and the return of the Snapple Lady. Their glitzy marketing campaigns and big-budget commercials helped depress Snapple sales to the point where Quaker Oats found it necessary to sell the brand. Triarc's only recourse seemed to be a "back to the roots" strategy designed to recapture Snapple's lost consumers.

Snapple's overall success emboldened the giant soda makers to develop fruit and tea products to compete in this market. Coca-Cola spent an estimated $15-20 million to promote its Fruitopia brand of juices. Pepsi also embarked on an expensive relaunch of its Lipton's Brew brand of ready-to-drink teas.

FIFTEEN MINUTES AND COUNTING

"I never left Snapple. Snapple left me," Wendy Kaufman observed following her re-hiring by the beverage maker in 1997. "When Quaker came into the picture they decided I was no longer the image they wanted to project, that I had had my time, and that they wanted to go mainstream." That was the extent of the public bitterness expressed by Kaufman (although she did make a point of saying, "I'll never eat oatmeal again"—a not-so-veiled jab at Quaker Oats, Snapple's erstwhile parent company—at her reintroduction extravaganza). The happy-go-lucky Long Island native seemed to have accepted her so-called fifteen minutes of fame with an equanimity that other celebrities could learn from.

While away from Snapple Kaufman tried a few other show business gigs. She held a job hosting a radio call-in advice segment called "Ask Wendy" and appeared briefly in the Chevy Chase film National Lampoon's Vegas Vacation. But she could not escape the image that she had built for herself as a heartfelt iced-tea pitchwoman—especially after a Colorado disc jockey launched a "Bring Back Wendy" campaign. Kaufman even turned down an offer to promote Mistic soft drinks because her heart reportedly remained with Snapple. "I was heartbroken," she said of her dismissal. "All I wanted to be was the Snapple Lady." In March 1997 she got her wish—and so did her legions of fans worldwide.

MARKETING STRATEGY

Before Quaker Oats purchased Snapple in 1994, growth in the New Age beverage category had slowed to about 20 percent from the highs of the 1980s. By the end of 1995 Snapple sales had fallen 9 percent, and the brand lost $100 million including charges and write-offs. "What the hell is Snapple?" groused corporate brand consultant Alan Brew in March 1997. "No one knows what it means anymore." Indeed, the single greatest challenge faced by Triarc marketers in the wake of the beverage company's acquisition of Snapple was to rebuild the brand's identity. "It's not edgy anymore, but we can bring that edginess back," declared Triarc Beverage Group CEO Weinstein. He immediately entered into negotiations with Kaufman to discuss her future role with Snapple.

"Time is of the essence because summer is coming," Kaufman remarked after their initial meeting. "One more year of bad Snapple advertising would be devastating for the brand." Heeding Kaufman's advice, Triarc in May 1997 announced that it had hired the New York-based ad agency Deutsch to create advertising for Snapple. The $40 million account had been in the hands of Chicago agency Foote, Cone, and Belding. Kirshenbaum, Bond & Partners, Snapple's original agency, was contacted by Triarc but declined to offer a pitch for the account.

With Deutsch now in charge of the creative side, Kaufman was once again tapped to star in a Snapple television commercial. This spot, however, finds her venturing far afield from her previous role as a company ombudsman responding to consumer letters. The new spot traces the efforts of a search party that has set out to find the missing Snapple Lady. The searchers eventually trace her steps to an island near Bora Bora, where the rotund New Yorker is being worshiped as a god by the natives. Kaufman is ultimately located and returned to Snapple headquarters. "They need me!" she says as a rowboat whisks her away from the island paradise. The commercial ends with a humorous twist as one of the islanders mistranslates her parting words as "we can eat you" and looks menacingly on the team of rescuers. The ad plays humorously off of Kaufman's oft-repeated public pronouncement that she spends her time away from Snapple touring the tropics.

Snapple Orange Tropic, the product commemorating Kaufman's renewed association with the company, blended fruit juices and purees to conjure up "the tastes and scents of the tropics," according to a company press release. The all-natural beverage contained 12 percent juice. It also featured Kaufman on its packaging. The 16-ounce bottles of the new product were wrapped by a whimsical drawing of the Snapple Lady relaxing in her island getaway. Reclining on a chaise lounge and outfitted in a floral dress with a lei and a fruit-topped hat, Kaufman is shown surrounded by lobsters, fish, and tropical birds. Palm trees and tropical plants and flowers serve as a backdrop. The new drink was distributed for a limited time starting in June 1997.

Weinstein stressed that Kaufman's return would not be a one-time proposition. While she would not be asked to fulfill her previous role answering letters and would no longer serve as company spokesperson, the Snapple Lady would be deployed to make personal appearances and aid the brand in other ways. Although Kaufman's potency as a pitchwoman was said to be strongest on the East Coast, due to her pronounced New York accent, Weinstein also emphasized Snapple's commitment to remain a national brand.

OUTCOME

The return of the Snapple Lady seemed to generate the kind of energy around the Snapple brand that its marketing executives had hoped for. Kaufman's coming-out party was heralded with a blitz of free publicity in Snapple's core East Coast markets, as local newscasts scrambled to cover the return of the prodigal pitch-woman. The commercials themselves evaded the usual critical scrutiny as reviewers preferred to remark on the new aspects of Kaufman's reemergence.

Kaufman soon settled into her role as spokesperson emeritus for Snapple brands. She rode the Snapple Orange Tropic Float in the 24th Annual New York City Halloween Parade on October 31, 1997. Meanwhile, Triarc went about the business of crafting a long-term marketing and advertising strategy for the brand. During this period sales rebounded. For the year ending March 1, 1998, dollar sales of refrigerated teas grew 4.8 percent, with Snapple leading the market. Triarc stewardship halted a three-year sales decline and actually increased Snapple case volume slightly in the second half of 1997 compared to the second half of the previous year. The return of the Snapple Lady—along with improved distributor relationships, targeted advertising, and product innovation—was credited with the upswing.

In the spring of 1998 Snapple introduced a new tag line, "The Best Stuff Is in Here," in commercials that retained the quirkiness of previous ads but without the Snapple Lady. The product-focused spots were designed to illustrate the wide variety of Snapple flavors and were again created by Deutsch New York. Industry analysts were undecided about whether the brand's turnaround was permanent or temporary.