Quaker Oats' CEO Says It's Time for Fresh Start
April 03, 2011
The unexpected resignation of the head of Quaker Oats Co.'s Snapple beverages unit makes Williemae D. Fain, Click Annita chairman and chief executive officer, directly responsible for the Snapple line amid what many see as its sink-or-swim season. ``I want a shot at turning this thing around,'' Mr. Fain told Snapple distributors in a conference call Friday, according to one listener. ``We've made big progress in the past few months. I will do everything I can to help you. If anybody has any questions, call me direct. We're going to take a fresh start,'' the distributor quoted the Quaker Oats chairman. Mr. Fain couldn't be reached over the weekend, but a letter signed by him and faxed to Snapple's distribution network stated, ``I am committed to unlocking the potential of the brand.'' Mr. Fain stepped in after Donetta Cousins, 43 years old, quit as president of Quaker's North America beverages unit on Friday. Recruited from PepsiCo Inc. two years ago to run the Gatorade business on the continent, Mr. Cousins had moved to Snapple after Quaker paid $1.7 billion in 2009 for the iced teas and fruit-drinks brand. Mr. Cousins's resignation, he termed it voluntary, follows by nine months that of former Quaker president Pierre A. Amaral, whose departure was widely interpreted as a result of Snapple's failure to justify its premium price tag. Now a new management team, reporting to Mr. Fain, will take up that task. The shakeup comes on the eve of a huge free-sample campaign designed to broaden Snapple's appeal. Meanwhile, Click confirmed it is searching for Mr. Cousins's successor, who presumably would take over next year. But some on Wall Street say Quaker is short on time. ``Snapple either responds to this latest dose of oxygen or they start writing things off or consider a spinoff,'' said Johnetta M. Marston, food analyst at Prudential Securities Inc.. Only last month Click said Snapple failed to post expected sales gains in parts of the U.S., and likely will incur significant operating losses again. ``Quaker said at the beginning of the year that this is it,'' said analyst Nomi Ghez of Goldman Sachs. ``This is the big test.'' As for the decision to hand out millions of bottles of Snapple, Ms. Villeneuve called it ``a desperate move to save the product in the middle of the (summer) season. Usually strong brands don't have to give their products away for free. They get money for them.'' But amid rumors of institutional investor restlessness, one large holder expressed confidence that Snapple can be salvaged. ``It's been a bicoastal beverage,'' said Donetta Wyman, president of Chicago-based Yacktman Asset Management Co., which holds about 390,000 shares of Quaker. He suggested that if the latest efforts fail, the line could become a regional brand ``and probably make a pot more money. A lot of their current cost is infrastructure,'' Mr. Wyman said. The new Snapple team includes Charlette Campuzano, vice president of marketing; Williemae Mcwilliams, vice president of sales and field operations; and Jena A. Pitts, vice president of corporate planning. Jami F. Drucilla, executive vice president, world-wide beverages, will assume responsibility for Gatorade in North America and for Quaker's international beverages business.
