'Foots' Clements, Master of the Soft-Drink Sell, Makes a Hot Deal
Along the way Clements has picked up a few dignified titles as well, thanks to 52 years spent single-mindedly selling a single product: Dr Pepper. Since 1974 Foots has headed the soft-drink firm as chairman and chief executive, a position he earned by being a man obsessed, or perhaps addicted.
Visitors to the company's Dallas headquarters are offered Dr Pepper ice cold, or steaming hot with a slice of lemon. Foots, who drinks about 10 Dr Peppers a day, thinks that hot Dr Pepper tastes "like Russian tea—sweet, spicy and aromatic." He often sports gold Dr Pepper bottle-cap cufflinks, stocks his bar at home with cases of the stuff and even likes his spaghetti sauce made with Dr Pepper instead of water.
Gray-haired, stately and as slow-talking as he is fast-thinking, Foots fairly fizzes with enthusiasm for the soft drink he started selling the year he graduated from college. "I didn't think there was anything like it then, and I still don't," he says. Clearly, others feel the same way. Last February Coca-Cola tried to purchase Dr Pepper for $470 million. That buy was opposed by the Federal Trade Commission, so Foots cooked up another. On Aug. 20 Dr Pepper was sold to a multibillion-dollar partnership for $416 million.
For Clements the deal was the capper to some very fancy financial footwork. A few years ago, at an age when most successful businessmen are worrying about where they left their golf carts, Foots was anxious about an unfriendly takeover and fretting about Dr Pepper's inability to expand sales overseas. In 1984 he engineered the private purchase of the publicly held company by a low profile investment firm based in New York. As part of the leveraged buy-out, the New York company quickly unloaded some of Dr Pepper's assets: Canada Dry, acquired in 1982, brought some $175 million, and real estate and bottling plants about another $170 million. Then Foots sat back to await a call from Coke or Pepsi, companies with the cash and clout to vault into the overseas markets he wanted.
Last January, Pepsi jumped first, announcing that it had arranged to buy 7-Up, increasing Pepsi's share of the soda-pop market to about 34 percent. If Pepsi then bought Dr Pepper (6.5 percent of the market), it could have owned more of the $30 billion soft-drink business than Coke for the first time. Foots, who had invested everything he had in the Dr Pepper deal, lit a cigar. Coke came forth a few weeks later. "Timing is important, in everything from sex to selling," says Clements.
But, according to the Federal Trade Commission, a little thing called competition is also important, and the FTC didn't take kindly to the prospect of two giants sharing 81 percent of the market. A federal judge agreed, and the deal with Coke was off.
To Foots, who has watched the slow consolidation of the industry through a myriad of small buy-outs over the past decades, the court's decision was a clear case of belated principle. "That ruling was sort of like making birth control retroactive," he drawls. But one man's setback can be that same man's opportunity if his name is Foots Clements, and he just looked elsewhere. "China has some possibilities," he said. "And who knows, we might even decide to buy out some other companies ourselves."
The deal that came through, Foots claims, will finally give Dr Pepper the muscle to grow overseas, and there are other virtues to it as well. "I can continue to compete with Coke," he says, with a chuckle. "We can keep the guerrilla warfare going."
The youngest of eight children, Clements grew up a half-day's wagon ride from North Port, Ala., and "two axle greasings" north of Tuscaloosa. After two years at Howard College in Birmingham, he transferred to the University of Alabama on a football scholarship. There he learned his first hard lesson in timing when he found himself benched behind a couple of soon-to-be-famous ends named Don Hutson and Bear Bryant.
In his senior year Foots' timing looked even worse when he took a job as a route salesman for a then barely known Texas soda pop with the decidedly unappealing name of Dr Pepper. Concocted in 1885 by a pharmacist in Waco, Texas (who named the drink after his true love's father), Dr Pepper had a unique flavor and mysterious ingredients that made it misunderstood from the start. Recalls Foots: "People used to tease me and tell me it tasted like everything from prune juice to bugs. I liked the challenge of trying to get people to try it. I used to tell them it helped develop their manhood, that it would cure baldness—anything I could think of just to get them to try it."
Once Foots got his titanic tootsies in the door at the Dallas home office, it was a quick elevator ride to the top. He arranged for Dr Pepper's sale in Army PX's around the country, persuaded the company to focus on younger, more open-minded customers and by 1985 had steered operating profits to the $60 million-plus level. But the pressures of the job, including up to 200,000 miles of travel each year, took their toll on Clements' private life. In 1978 he separated from his wife of 40 years, and they divorced four years later. They had one son, Wayne, now 37 and a real estate investor in Dallas.
Clements has since married his former executive assistant, Virginia Thomas. Their new home in Dallas has a 26-foot ceiling in the main entry, a swimming pool and, of course, an antique Dr Pepper vending machine. Foots has no financial worries now(he owns 7 percent of Dr Pepper) and delegates enough authority to make his constant presence at work unnecessary. The employees appreciate being treated, as he puts it, "like Thoroughbreds—hold the reins loosely." He arrives at the office at about 9:30 a.m. and leaves by 3 p.m., with perhaps a short nap in between. He is a "lovable character," says one worker who especially enjoys Clements' longtime practice of sending out Christmas cards in the shape of a bare foot. He is also a master at avoiding confrontations. "I always thought of salesmanship as the gentle art of letting other people have your way," says Clements.
In his office, surrounded by a comfortable chair, a jungle of indoor plants and the smoke from a Travis Club cigar, Clements seems supremely content with his latest sale. His new title will be chairman emeritus. "I thought at first it meant I was over the hill," he says, "but I looked it up, and it's a title of honor that still carries certain responsibilities and authority. I love the idea of getting rid of the day-to-day burdens of being CEO and operating in the capacity of 'advise and consent.' I guess," he says as his last exhalation of smoke drifts slowly upward, "I'll just have to put off early retirement."