Quaker Bought Snapple for $1.7 Billion. Sold It for $300 Million.

In 1994, Quaker Oats was riding high on the success of Gatorade. They had transformed a regional sports drink into a national powerhouse. Naturally, they assumed they could do the same thing with Snapple.

They bought the company for $1.7 billion.

The Mismatch

Quaker immediately tried to apply the Gatorade playbook: centralise distribution, push into supermarkets, streamline the product line. The problem was that Snapple was not Gatorade. Its charm was its quirky independence, its network of small distributors, and its offbeat marketing.

Quaker replaced the distributors with their own system. Sales cratered. The brand that had been built on personality was being run by a cereal company that understood oats better than iced tea.

The Exit

After 27 months of declining sales and mounting losses, Quaker sold Snapple to Triarc Companies for $300 million. They took a $1.4 billion loss on the deal.

The acquisition had lasted less time than most car loans. Quaker's CEO was forced out. The Snapple debacle is now taught in business schools as one of the worst acquisitions in American corporate history.

Triarc, incidentally, turned Snapple around within two years and sold it for $1.45 billion. Almost exactly what Quaker had paid.