textfiles/food/snapple.rum

"Snapple Escapes the Grip of Rumors"
by Barbara Presley Noble 
_New York Times_, January 19, 1993

  At first, there were only one or two inquiries, by phone and very 
specific: Was Snapple, soda maker to the New Age, supporting Operation 
Rescue, the anti-abortion group that tries to shut down abortion 
clinics? Odd, thought Arnie Greenberg, a company founder and the chief 
operating officer, but not especially vexing. "Eh," he said of his first 
reaction in early August, emphasizing the syllable with a shrug that 
brings one floral suspender up near his ear.
  But a week or two later his brother came home to Long Island from a 
trip to the Poconos. He told Mr. Greenberg people were saying, "Your 
brother's anti-choice."
  Mr. Greenberg said in a recent interview at the company's headquarters 
in Valley Stream, L.I., that he knew instantly it did not matter that 
Snapple took no position on abortion. If the Poconos were buzzing, so 
would be the rest of the Northeast, California, and the West and 
anywhere else Snapple's many apostles are found. Snapple was about to 
become boycott bait.
  Welcome to the Snapple Beverage Corporation's near nightmare.
  Once Snapple, the fastest growing beverage company in the country, 
pondered how much it had to lose, it moved quickly. It wrote back to 
customers, got in touch with abortion-rights groups and hired a 
detective. By late December, the fuss had evaporated, and whatever 
attention had been diverted was back on soda.
  In the last couple of years, the company has had a fairy tale 
existence, transforming itself from a pedestrian maker of fruit juices 
sold in health-food stores into star soda maker, with "natural" iced 
teas as its specialty.
  In the first nine months of 1992, Snapple had revenue of $177 million, 
more than double the corresponding period a year earlier. In December, 
the 20-year-old company raised $88 million in an initial public offering 
that succeeded vastly beyond its expectations, if not its fantasies. The 
stock was offered at $20 a share, but began trading at $31, and closed 
yesterday at $31.375.
  Rumors never arrive at a convenient time, but this one had the 
potential to devastate Snapple. "Their momentum is based on hitting 
every cylinder," said Tom Pirko of Bevmark Inc., a beverage industry 
consulting company that has had some dealings with Snapple. "Any bad 
news can stun that momentum. They can't afford any ill will."

Brawling for Shelf Space

  Beverages is not a business for wimps. In the brawl for shelf space, 
no jealousy is too petty, no deceit too extravagant, no expression of 
greed too excessive. The industry's intricate three-tiered system of 
interdependent manufacturers, distributors and retailers seems 
guaranteed to foment rogue-provocateuring. It is home to a well- 
established tradition of dirty tricks and mischief.
  Last year, rumors that Tropical Fantasy caused sterility in black men 
torpedoed sales of the cola, made by the Brooklyn Bottling Company. 
Similarly, in 1987, there were whispers that Corona Extra, the brew that 
turned a perfect yin-yang following of surfers and yuppies into a 
meteoric and highly profitable broad popularity, was contaminated with 
urine. Sales tanked. Corona and Tropical Fantasy lived to be consumed 
again, largely because the companies involved took the you-eat-the-bear- 
or-the-bear-eats-you approach. They countered with risky high-visibility 
publicity campaigns.
  Snapple trod softly on publicity but firmly on inquiries. After Mr. 
Greenberg's Pocono-inspired moment of clarity, the company moved to 
contain the damage. By then, according to the rumors, the company was 
not only contributing to so-called pro-life causes, it was also giving 
money to the Ku Klux Klan and anti-gay groups. Late in the episode, 
Snapple also heard it was brewing some of its teas in South Africa.
  Snapple has both the advantage and disadvantage of being popular with 
college students and of being particularly popular in the beverage-happy 
Bay Area, a campus-rich region. The company received frantic calls from 
distributors when anti-Snapple fliers began appearing near local 
colleges and universities, where students have long been highly 
politicized if not always interested in due diligence on issues.
  Tom Louderback, a former Oakland Raider who is a beverage distributor 
in Oakland, has been in the area long enough to remember the United Farm 
Workers boycott of Gallo wines and the more recent boycott of the Coors 
Brewing Company for a myriad of supposed sins. Mr. Louderback was 
afflicted by bad memories when he began to hear that Snapple, his 
hottest ticket of the moment, might be the target of a boycott. "It 
started in hotbed areas, around the universities," he said.
  He would not be surprised if the rumors were started by a competitor, 
but he believes they are passed on by "people who believe in good things 
but don't know the truth." He began asking his retailers what they were 
hearing and from whom. And he talked to Snapple. "I pleaded with them to 
take a stance," Mr. Louderback said.

Answering the Mail

  Snapple, meanwhile, began answering the letters that came in, at the 
rate of a couple dozen a day. One person wrote: "I am dying for one of 
your fine beverages, but I am holding back. Please send a response." The 
company sent each correspondent -- including the opponents of abortion 
who sent in their blessings -- a statement of the company's neutral 
position. It sent affadavits to that effect to distributors, retailers 
and any relevant established political groups. The reaction began to 
taper off once the company got in touch with pro-choice organizations.
  When anti-Snapple fliers began appearing, Snapple sent out its own 
counter-fliers and hired a detective. The company says he never found 
the original source of the Operation Rescue rumor but did find one 
person in the Bay Area who seemed to be at the center of several 
networks where the rumors were especially lively. Snapple asked him to 
stop; it says he did. The source of the Klan rumor apparently was the 
kosher marque that Snapple -- like hundreds of companies -- puts on the 
bottle to indicate its drinks are prepared to rabbinic standards.
  In the end, says Jude Hammerle, Snapple's vice president for 
advertising and its self-described bird dog on the rumor front, the 
episode was not as traumatic for the company as it might have been. It 
certainly, Snapple says, did not disrupt its sales momentum. The main 
cost was in secretarial time. It was a slight distraction, said Arnie 
Greenberg, "having the girls answering letters."

[End Quote]
--
Greg Franklin
f67709907@ccit.arizona.edu