+quot;Snapple Escapes the Grip of Rumors+quot; by Barbara Presley Noble _New York Times_,
"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
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
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."
E-Mail Fredric L. Rice / The Skeptic Tank