Quaker Oats paid $1.7B for Snapple and sold it three years later for $300M

In 1994, the Quaker Oats Company — riding the enormous success of its Gatorade acquisition — agreed to buy Snapple Beverages for $1.7 billion. Snapple was a fast-growing, personality-driven brand of teas and juices, famous for its quirky labels and its 'Snapple Lady' spokeswoman. Quaker's logic was straightforward: it had turned Gatorade into a powerhouse, and it believed it could do the same for Snapple.

The problem was that the two brands worked in completely different ways. Gatorade was a supermarket and sports-marketing product that fit Quaker's distribution muscle. Snapple was sold through a fragmented network of small independent distributors — gas stations, delis, convenience stores — and thrived on its offbeat, irreverent identity. Quaker tried to push Snapple through its own supermarket channels and to tidy up its marketing, and in the process stripped away much of what made the brand special. Sales stalled.

Within three years, Quaker gave up. In 1997 it sold Snapple to Triarc Beverage Group for just $300 million — a loss of roughly $1.4 billion on the purchase price, before counting the money lost along the way. (Triarc later revived the brand and sold it to Cadbury Schweppes for $1.45 billion in 2000.) The deal became a textbook example of paying a huge premium for an acquisition whose business model you don't actually understand how to run.