Snapple Beverage Group
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This is an archived article published in 2003
Mayor Bloomberg puts Snapple
into every New York school
By Paulo C P Bótas, Education Editor
14 September 2003: New York City Mayor Michael Bloomberg announced that the Snapple Beverage Group, a division of Cadbury-Schweppes, had become New York City’s first official corporate marketing partner under the City’s plan to generate revenue by centralizing New York’s marketing assets and intellectual properties.
Snapple has entered into a five-year vending and marketing agreement with the City of New York. The deal, which will be implemented in phases, guarantees the City $106 million in cash and $60 million in marketing and promotional value. Snapple won the contract against competition from Coca-Cola and PepsiCo.
In July 2003, the Bloomberg Administration created the New York City Marketing Development Corporation (NYC Marketing), a local development corporation, run by Joseph M. Perello, the Citys first Chief Marketing Officer. Its mission is to centralize the Citys marketing assets, rights and authority in order to generate new revenues and resources and to create a plan to enhance the Citys brand around the world for the growth of jobs and tourism.
The City of New York and Snapple agreed on the following:
Snapple will become the exclusive provider via vending machines of water and fruit juices in the Citys 1,200 schools.
Snapple will financially support the schools through commissions on sales from vending and by creating sponsorships, which will support sports and physical education programs including the Public School Athletic League (PSAL).
Outside of the schools, Snapple will become the official iced tea, water and chocolate drink (Yoo-hoo) for vending in the City.
Snapple will market these products directly with the City through the sponsorship of concerts, events, and utilization of the Citys owned media including outdoor media, TV and online assets.
Snapple has committed to work with its affiliates to promote New York City through its marketing and communications efforts.
According to New York Citys education department, Snapple will deliver a vending solution that is turnkey, allowing school principals and educators to focus on educating and not on administrative or business issues. Principals will no longer be responsible for negotiating, operating and collecting revenues for vending agreements, thus allowing them to focus on educating children. The Citys new approach allows the Department of Education (DOE) rather than each individual school to centrally manage the vending operations, distribution of funds back to individual schools and implementation of the sponsorship revenues, a spokesman told CityMayors.
As a part of its commitment to schools, Snapple has entered into a five-year agreement to exclusively vend bottled spring water and 100 per cent juices in all schools. Snapple, in cooperation with the Department of Education, will develop new products that meet the Citys strict nutrition guidelines. Snapples new product line 100% Juiced! will include four flavors, Green Apple, Orange Mango, Grape and Fruit Punch, with Vitamins A, C, D and Calcium. The new juices will be ready for distribution within the next 30 days.
Snapples five-year commitment will provide a minimum of $40.2 million to the DOE in cash, including commissions on every case sold plus an additional sponsorship investment to support sports and physical education in schools. Snapples commitment includes a minimum of $3 million per year for PSAL-associated programs.
Funds will be used for the following:
Creating innovative awareness programs and educational materials designed to educate students, parents and teachers on the benefits of physical activity and a healthy diet.
Purchasing equipment, uniforms, coaches, and training.
Creating events and other initiatives specifically designed to encourage physical education both in schools and on weekends including the support for the PSALs 100th Anniversary in 2004.
Upgrading sports facilities including school playgrounds.
Prices for vended beverages in all schools will be fixed initially at $1.00 for water and fruit juices, an average of about 18 per cent below the average retail price for comparable beverages in the City. Moreover, Snapple will be entirely responsible for the installation, operation, maintenance and filling of all vending machines.
In a second agreement to begin 1 January 2004, Snapple will be granted the exclusive right to vend iced teas, water and chocolate drinks throughout City-controlled properties. Snapple will vend items including its popular Snapple Lemon Iced Tea, Snap2-0 spring water and Yoo-hoo chocolate drink among others. The City of New York will receive $66 million in cash over the term of the agreement, which includes commissions on every case sold.
In addition, Snapple and the Citys marketing team, NYC Marketing, will jointly promote Snapples association with New York City. In total, Snapple will direct $60 million over the next five years towards jointly marketing New York City and Snapple, providing the City with new ways to reach tourists and consumers without requiring an increase in Snapples marketing budget.
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The history of Snapple
Snapple Beverages originated as the Unadulterated Food Corporation in 1972 when three childhood friends, Leonard Marsh, Hyman Golden and Arnold Greenberg, began selling pure fruit drinks to health food stores in the Greenwich Village area of New York. In almost no time at all, consumers were seeking out these delicious beverages. Distribution was expanded to meet the ever-growing consumer demand. Snapple, as we know it, had formed its roots.
Snapple's nutritional cachet and quirky product names like Mango Madness and Ralph's Cantaloupe Cocktail so intrigued consumers that, between 1989 and 1993, sales rocketed from $24 million to $516 million. In April of 1992, the original owners sold the company to Thomas H Lee and Company, a Boston-based investment firm, which then took Snapple public. Within the three months following its initial public offering, Snapple's stock value had tripled.
In December, 1994, Snapple Beverage Corporation was purchased by The Quaker Oats Company. In May of 1997, the Triarc Beverage Group acquired Snapple from Quaker Oats. Snapple along with Mistic, Royal Crown and Stewart's Brands were sold as the Snapple Beverage Group to Cadbury Schweppes in November 2000.