Cadbury Unveils New Snapple Ads and Products.
'Believe Again.' 'All About Winning.'

At meeting with Snapple distributors in NYC on Oct. 14, Cadbury executives unveil new ads/products and stress company will work to re-forge strong consumer connections for brand. Cadbury Americas Beverages CEO Gil Cassagne acknowledges, "recently Snapple's connection with consumers has been slipping (and) performance has been volatile." Snapple has had some "frustrating issues and setbacks," but promises improvements and asks distributors for "open mind" and to "believe again." Declares Cadbury will return "to the roots of what made Snapple, Snapple." Acknowledges company doesn't yet have "all the answers." But Cassagne promises company will work "collectively" with distributors and declares: "I'm all about winning and you are, too." Says "winning" means enjoying "above-category profitable growth."

Results. Recent. YTD, overall Snapple volume is down -2% (table). Regulars are down and diets are up. Across Snapple segments, teas are growing; juice drinks and lemonades down. Long-term. Snapple was born in 1972 and over next 15 years grew to just 2 mil cases (chart page 2). Then it took off, growing to 72 mil physical cases by 1994 -- when it was acquired by Quaker Oats. At that point, results began to crumble; volume slipped to 34 mil cases by 1997 -- when it was acquired by Triarc. Under Triarc, volume recovered to about 49 mil cases. Since Cadbury acquired brand in 2000, volume has eroded slightly.

Integration; Snapple #2 brand. Over last year, Cadbury has integrated operations of its three U.S. beverage units: Dr Pepper/Seven Up; Snapple; and Motts into "Cadbury Schweppes Americas Beverages" (CSAB). Cassagne says Snapple is #2 CSAB brand in terms of profitability, behind Dr Pepper but ahead of 7UP. Tells distributors corporate integration has produced "significant cost savings" enabling more investment/support/innovation next year behind Snapple.

Imperatives for brand. CSAB CMO Randy Gier says Snapple must do three things: 1) rebuild consumer connections. 2) innovate to address health/wellness issues. 3) improve in-store availability and provide wider array of packaging to meet consumer needs/preferences.

Advertising/marketing. Cadbury will launch new Snapple ad campaign in mid-January using "Return the Favor" tagline. Ads show consumers saying nice things about Snapple and then others saying nice things about those consumers. So, for example, one ad pictures car mechanic extolling Snapple; ad then cuts to one of mechanic's customers saying something nice about him, albeit with humor and heavy irony. 'Wendy.' "Snapple Lady" Wendy Kaufman, who has played on-and-off role in Snapple ads/marketing since early 1990's, is back once again. She provides voice-over in ads and will also do P.R. She makes characteristic humorous appearance at meeting, proclaiming: "I'm so excited ... I'm so thrilled." Media. Snapple vp marketing Holly Mensch says company is expanding age range for media buys up to 49-year-olds; will now cover 18-49 age-range. Next year, Snapple ads will have "+61% more impressions" and +14% more with 18-24 year-olds.

Diet push. Gier says Snapple needs to work harder to address consumer concerns about calories/carbs. Notes "only 32% of our distribution outlets" have Snapple diets. Plus, many consumers "don't know" about Snapple diets. Declares: "We're going to jump fast and heavy against diets."

Innovation. Company plans new products and will test two new sub-lines. New products. Cadbury will debut Diet Lemonade Iced Tea and Diet Plum-A-Granate Tea (pomegranate/plum flavored). New sub-lines. Addressing need for lighter beverages, Cadbury will test two new sub-lines: 1) "Snapple White Tea" beverages sweetened with cane sugar; will contain one-third fewer calories than Snapple regular flavors; will be colorless, like water. 2) Snapple "It's All Light" light fruit drinks with sweetener blends.

Availability/packaging. Gier says Cadbury will focus heavily on availability and packaging. 40% of Snapple consumers, he says, will "walk away if they can't find the flavor they want." Plus, he says, consumers would buy more Snapple for take-home if it were more affordable and notes 12-packs are only in 57% of distribution. In 2005, company will focus on 12-pack glass and expand other multi-pack and multi-serve take-home options. Will also develop more non-glass packaging. Wal-Mart. Mike McGrath, outgoing president sales, tells BD 2100 Wal-Mart stores will sell Snapple diet variety 12-packs during late December and January on their wellness displays.

Snapple-A-Day; Snapple Elements. Company next year will focus on core Snapple. But to help growth of Snapple-A-Day meal replacement beverage, pricing will be brought down to be competitive with Slim-Fast. Re Elements energy drinks, Gier says: "It it's working, fine. If it's not, convert its space to basic Snapple and diets." For Elements, Cadbury adopts new point-of-sale tagline: "Everything Else is Just Bull."

Distributors. Distributors say they like ads and focus on consumer connections: 1) "Ads are great, just what the brand needs. They're a combination of old and fresh." 2) Ads should "help re-connect." 3) "I hope they move the diets, consumers are concerned about sugar." 4) "This brand needs to do a lot better in addressing the health issues." 5) "Retailers are saying the brand is 'nice, but why do we need it?' (Cadbury executives) have their work cut out for them." 6) "The ads will play well with consumers." 7) "Message is about stabilization and the importance of Snapple to Cadbury."