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"Snapple Escapes the Grip of Rumors" by Barbara Presley Noble _New York Times_, January 19, 1993

At first, there were only one or two inquiries, by phone and very 

specific: Was Snapple, soda maker to the New Age, supporting Operation Rescue, the anti-abortion group that tries to shut down abortion clinics? Odd, thought Arnie Greenberg, a company founder and the chief operating officer, but not especially vexing. "Eh," he said of his first reaction in early August, emphasizing the syllable with a shrug that brings one floral suspender up near his ear.

But a week or two later his brother came home to Long Island from a 

trip to the Poconos. He told Mr. Greenberg people were saying, "Your brother's anti-choice."

Mr. Greenberg said in a recent interview at the company's headquarters 

in Valley Stream, L.I., that he knew instantly it did not matter that Snapple took no position on abortion. If the Poconos were buzzing, so would be the rest of the Northeast, California, and the West and anywhere else Snapple's many apostles are found. Snapple was about to become boycott bait.

Welcome to the Snapple Beverage Corporation's near nightmare.
Once Snapple, the fastest growing beverage company in the country, 

pondered how much it had to lose, it moved quickly. It wrote back to customers, got in touch with abortion-rights groups and hired a detective. By late December, the fuss had evaporated, and whatever attention had been diverted was back on soda.

In the last couple of years, the company has had a fairy tale 

existence, transforming itself from a pedestrian maker of fruit juices sold in health-food stores into star soda maker, with "natural" iced teas as its specialty.

In the first nine months of 1992, Snapple had revenue of $177 million, 

more than double the corresponding period a year earlier. In December, the 20-year-old company raised $88 million in an initial public offering that succeeded vastly beyond its expectations, if not its fantasies. The stock was offered at $20 a share, but began trading at $31, and closed yesterday at $31.375.

Rumors never arrive at a convenient time, but this one had the 

potential to devastate Snapple. "Their momentum is based on hitting every cylinder," said Tom Pirko of Bevmark Inc., a beverage industry consulting company that has had some dealings with Snapple. "Any bad news can stun that momentum. They can't afford any ill will."

Brawling for Shelf Space

Beverages is not a business for wimps. In the brawl for shelf space, 

no jealousy is too petty, no deceit too extravagant, no expression of greed too excessive. The industry's intricate three-tiered system of interdependent manufacturers, distributors and retailers seems guaranteed to foment rogue-provocateuring. It is home to a well- established tradition of dirty tricks and mischief.

Last year, rumors that Tropical Fantasy caused sterility in black men 

torpedoed sales of the cola, made by the Brooklyn Bottling Company. Similarly, in 1987, there were whispers that Corona Extra, the brew that turned a perfect yin-yang following of surfers and yuppies into a meteoric and highly profitable broad popularity, was contaminated with urine. Sales tanked. Corona and Tropical Fantasy lived to be consumed again, largely because the companies involved took the you-eat-the-bear- or-the-bear-eats-you approach. They countered with risky high-visibility publicity campaigns.

Snapple trod softly on publicity but firmly on inquiries. After Mr. 

Greenberg's Pocono-inspired moment of clarity, the company moved to contain the damage. By then, according to the rumors, the company was not only contributing to so-called pro-life causes, it was also giving money to the Ku Klux Klan and anti-gay groups. Late in the episode, Snapple also heard it was brewing some of its teas in South Africa.

Snapple has both the advantage and disadvantage of being popular with 

college students and of being particularly popular in the beverage-happy Bay Area, a campus-rich region. The company received frantic calls from distributors when anti-Snapple fliers began appearing near local colleges and universities, where students have long been highly politicized if not always interested in due diligence on issues.

Tom Louderback, a former Oakland Raider who is a beverage distributor 

in Oakland, has been in the area long enough to remember the United Farm Workers boycott of Gallo wines and the more recent boycott of the Coors Brewing Company for a myriad of supposed sins. Mr. Louderback was afflicted by bad memories when he began to hear that Snapple, his hottest ticket of the moment, might be the target of a boycott. "It started in hotbed areas, around the universities," he said.

He would not be surprised if the rumors were started by a competitor, 

but he believes they are passed on by "people who believe in good things but don't know the truth." He began asking his retailers what they were hearing and from whom. And he talked to Snapple. "I pleaded with them to take a stance," Mr. Louderback said.

Answering the Mail

Snapple, meanwhile, began answering the letters that came in, at the 

rate of a couple dozen a day. One person wrote: "I am dying for one of your fine beverages, but I am holding back. Please send a response." The company sent each correspondent – including the opponents of abortion who sent in their blessings – a statement of the company's neutral position. It sent affadavits to that effect to distributors, retailers and any relevant established political groups. The reaction began to taper off once the company got in touch with pro-choice organizations.

When anti-Snapple fliers began appearing, Snapple sent out its own 

counter-fliers and hired a detective. The company says he never found the original source of the Operation Rescue rumor but did find one person in the Bay Area who seemed to be at the center of several networks where the rumors were especially lively. Snapple asked him to stop; it says he did. The source of the Klan rumor apparently was the kosher marque that Snapple – like hundreds of companies – puts on the bottle to indicate its drinks are prepared to rabbinic standards.

In the end, says Jude Hammerle, Snapple's vice president for 

advertising and its self-described bird dog on the rumor front, the episode was not as traumatic for the company as it might have been. It certainly, Snapple says, did not disrupt its sales momentum. The main cost was in secretarial time. It was a slight distraction, said Arnie Greenberg, "having the girls answering letters."

[End Quote] – Greg Franklin

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