Cadbury's interest distribution, not brands
After selling most of its brands last year in 160 markets, Cadbury's has now acquired the US-based Snapple brands, in a deal worth around $1.45 billion, including $420m of Snapple's debt.
Obviously keen to strengthen its position in the US behind Coca-Cola and Pepsi, Cadbury has also announced it is now in talks to acquire the Orangina brand from Pernod Ricard.
A Pernod Ricard source told just-drinks.com that rumours Pernod has a one billion euro price tag for Orangina are false and a more realistic price would be around half of this figure.
just-drinks.com was also told that while Cadbury Schweppes is pursuing its own strategy by concentrating on the juice market, Orangina is not a brand Pernod Ricard sees in its portfolio. After Coca-Cola was refused permission to acquire the Orangina brand last year by the EU Monopolies Commission, the price tag is no longer important to Pernod Ricard.
But while Cadbury Schweppes is muscling its way back into the US market, will the Snapple brand survive under its new ownership, being the fourth time it has been sold in 8 years?
Or will Schweppes, known for its more traditional beverage portfolio, concentrate on Orangina and its owned favoured brands Dr Pepper and 7UP? Leaving Snapple to take a declining back seat?
A spokesman for Snapple said: "We think it is a great haul for the Snapple brand. There is an opportunity for Snapple to continue to grow. It is a very logical marriage as there is some distribution overlap in the US and complementary brands."
Michael Weinstein who heads the Snapple team is planning to stay on under Cadbury's ownership as it has been assumed Cadbury is keen to allow Snapple to continue its operation status as in the past.
Though when asked its plans once the Snapple acquisition is finalised, Dora McKabe, spokeswoman at Cadbury Schweppes told just-drinks.com: "It is far too soon to say. We only announced the acquisition a few weeks ago and we now have to go through the various processes to complete the acquisition, and that is going to take us well into November."
Snapple management should be used to uncertainty. Its history has at times been a shaky one. In 1994 it was sold to Quaker Oats for around $1.7 billion by private treaty company Thomas H Lee. But Quaker wanted to turn Snapple, known for its constant new flavours and off the wall names, into something more traditional and suited to the Quaker image.
This failed and Quaker was left with a company that had lost its way and three years ago, it was handed over by Quaker to Triarc for a mere $300m.
Cadbury's strategy could be to use the Snapple brand as its trump card to gain more US market share against the cola giants, Coca-Cola and Pepsi. The distribution overlap must be an advantage.
Snapple will hope to have seen the end of the uncertainty, but the future looks shaky. Surely this is not a time for the company to feel secure under its new ownership (with its non-traditionalist history)? Cadbury Schweppes is after all known for its traditionalism.
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