"Wendy called to say, `I'm the Quaker lady now,"' said Mr. Uzzi, president of Quaker's beverage division, laughing.
Wendy, of course, is the "Snapple lady," star of TV and radio spots for the New Age beverage that Quaker hopes will be its thirst aid for the '90s.
In forking out $1.7 billion for Snapple, Quaker hopes history will repeat itself. Back in 1983, when Quaker bought Gatorade, the package-goods marketer that has grown to $6 billion in sales also was at a corporate crossroads.
"Gatorade put Quaker into the beverage business; this substantially broadens our position," Mr. Uzzi said. "Quaker has a vision of becoming a very large beverage company. This is the first step toward that vision."
At its annual meeting in Orlando this week, Quaker will tell shareholders it now has four core businesses: cereal and grain-based snacks; rice and pasta brands; foodservice; and the Gatorade-Snapple beverage operation. Snapple's annual sales are estimated at $700 million.
Noticeably absent was any mention of domestic pet food, even though the division's free fall in sales has been stabilized, due to the strengths of brands like Kibbles 'n Bits, Cycle and Pup-Peroni. Somewhat lost in the Snapple excitement was the flip side of Chairman-CEO William Smithburg's announcement that Quaker is putting its $800 million European pet foods business on the block.
All President-Chief Operating Officer Phil Marineau will say is: "We've told our U.S. pet food people that our plan at this point is to continue focusing on improving results. But we'll re-evaluate our brand portfolio on a quarter-to-quarter basis."
The acquisition means one-third of Quaker's annual sales will come from beverages. Buying Snapple also gives Quaker a chance to do what it's done best lately: manage acquisitions.
Though some analysts said the immediate drop in Quaker's stock price that followed the announcement could make the company more of a takeover target, most think the acquisition will serve as a buffer against a takeover attempt. Quaker for years has been the subject of takeover rumors. But Mr. Marineau adamantly denied any such motive on Quaker's part.
Led by Mr. Marineau, Quaker built Gatorade from a $90 million, regional business into the company's largest brand, with sales of $1.2 billion in 26 countries. Following a bruising and expensive summer competing with Coca-Cola USA and Pepsi-Cola USA-in which analysts estimate Quaker spent an extra $40 million defending its turf-Gatorade ended the sports-drink season with only a small share loss.
Beyond Gatorade, Quaker's done well by acquiring the Chico-San rice cake business, which combined with its Quaker line has an 80% share of a $255 million category. Quaker feels good enough about the once-neglected rice cake line to have returned to TV advertising this fall, with spots from Berry-Brown, Dallas.
Last year's purchase of the Near East side-dish line also "has been the acquisition we hoped it would be," Mr. Marineau said. Near East, plus Quaker's Rice-A-Roni and Noodle Roni brands, are "right on target."
Of course, some might say what Quaker does best is make money in categories where it owns the market-whether rice cakes, sports drinks or oatmeal. That may make Snapple, awash in competition, a tougher challenge.
"[Snapple CEO Leonard Marsh] told his employees that they needed this to move on," Mr. Uzzi said. Many analysts agree.
Despite leading with 21.3% and 17.7% volume shares in ready-to-drink teas and single-serve juice drinks, respectively, Snapple sales dropped 6% in its most recent quarter. "Snapple had moved beyond its point of competence," said Tom Pirko, president of Bevmark, a food and beverage consultancy in New York. "Both Snapple and Gatorade have been staring at barriers they had to cross."
Michael Bellas, president of Beverage Marketing Corp., agreed. "Both companies needed to get bigger. The ante is bigger every day in this industry."
With Quaker, Snapple gets packaging and manufacturing expertise and clout in improving its supermarket distribution. Meanwhile, Snapple gives Quaker efficiencies of scale, more leverage as a beverage marketer, plus the cold-channel distribution it's coveted for Gatorade.
But if Mr. Marineau really wants beverages to account for half of Quaker's sales-as he said last week-some analysts say Quaker's best move would be to make another acquisition quickly. And Mr. Pirko said to compete, Quaker must spend "a lot more money on advertising."
Snapple this year committed $65 million to its quirky ad campaign from Kirshenbaum & Bond, New York. Though he joked about setting up a meeting between Wendy and Gatorade spokesman Michael Jordan, Mr. Uzzi last week said he expected no immediate change in that agency relationship; Bayer Bess Vanderwarker, Chicago, handles Gatorade.
There are other questions about the Gatorade-Snapple combination. One is how the Quaker corporate culture meshes with street-smart Snapple; "They can't afford to `Quakerize' Snapple," said a former senior executive.
"The burden's on Quaker to demonstrate why this acquisition makes sense," said Michael Mauboussin, analyst with First Boston Corp., New York.