SNAPPLE SPENDS HARD TO FIGHT BIG GUYS

By Published on .

While Coca-Cola Co. and Pepsi-Cola Co. try to remake themselves as nimble, New Age beverage companies, scrappy Snapple Beverage Corp. is pumping up to fight the titans on their own turf.

The strategy will help Snapple defend its position as the ready-to-drink iced tea leader against intensified competition from the big brands it started battling last year: Coca-Cola Nestle Refreshments' Nestea and the Pepsi-Lipton Tea Partnership's Lipton Original.

The three market leaders are expected to spend more than $125 million combined on advertising this year, almost double 1993 levels, to capitalize on the 70% growth expected for the ready-to-drink tea segment during 1994.

Both Snapple and Nestea will pour on marketing support this year-Snapple to defend its position and Nestle to catch up.

Snapple in mid-April will reprise its 1993 TV campaign with new fan letters from Snapple loyalists and a 117% hike in media spending. The $65 million campaign from Kirshenbaum & Bond, New York, will rival the cola giants' spending on major brands.

Snapple President-CEO Leonard Marsh has a simple explanation for the rise: "Our business doubled last year, so our advertising will double."

What Mr. Marsh doesn't mention is that Snapple is also fighting a comparative campaign from Lipton that challenges the leader's "real-brewed" product claim. Lipton continues to run a guerrilla radio campaign, begun last year, that charges Snapple teas are made from reconstituted tea powders.

In addition to advertising, Snapple is moving to broaden its distribution in vending machines and foodservice accounts.

The efforts are well-timed.

Coca-Cola Nestle Refreshments, with the No. 3 brand behind Snapple and Lipton, hopes to boost Nestea's market share by tripling media spending to $30 million for its most aggressive ready-to-drink tea campaign, themed "Plunge in."

The company is planning a heavy seasonal promotional schedule including a $5 million sponsorship of the Association of Volleyball Professionals' beach volleyball tour and an aggressive sampling program.

At least one of a handful of 30-second TV spots from McCann-Erickson Worldwide, New York, will feature association player Karch Kiraly.

Nestea's share of supermarket ready-to-drink tea sales, a $217.3 million segment, was 15.2% for the year ended Jan. 31, according to Information Resources Inc.

Snapple commanded a 37.1% share. Pepsi-Lipton's bottled Lipton Original and canned Lipton Brisk combined earned a 26.4% share, outpacing the segment with a growth rate of 266.4%. Supermarket sales of liquid teas grew 188.9%, with Nestea pacing and Snapple slightly lagging that mark.

Pepsi-Lipton will continue the "This ain't no sippin' tea" TV campaign that helped Lipton challenge Snapple last year. TV spots from J. Walter Thompson USA feature athlete Bo Jackson, model Vendela and actor David Carradine.

In this article:
Most Popular