So why did Quaker’s cup turneth over? It’s a great lesson in why you shouldn’t buy a stock just because you like the product. Snapple’s founders had quenched a thirst for something that wasn’t Coke, Pepsi or Perrier. But Quaker bought in just as competition heated up. High on its success with Gatorade, Quaker missed the point: Snapple wasn’t a mainstream product. Gatorade’s supermarket system, for example, didn’t mesh with Snapple’s small-store strategy. As late as December, chairman Bill Smithburg was still in denial, refusing to write down Snapple’s value. The sale may or may not stop calls for his head-or a salary cut. Last week Quaker said only that it had taken a risk that didn’t pay off. And how.
