Understanding Dr Pepper
”Once I get Dr Pepper down their throats, and tell them about it, I’m in business.”
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IN SPITE OF THE NEW expansion, it may be that Dr. Pepper still looks better coming from a 7-11 cooler than it does from behind a New York bar. When served at a recent private screening of a new film given by critic and gadabout Rex Reed, it was hardly a success. Author Jaquelyn Susann, cajoled into taking a drink, made a face nearly as sour as her prose and said, “Yetch.” The rest of Reed’s guests, among them actresses Lotte Lenya and Arlene Dahl, actor Joe Dallasandro, and directors Frank Perry and Paul Morrissey, all concurred. They took one polite sip and then set their glasses, soggy cocktail napkins still intact, on window ledges, on empty chairs, atop urinals in the men’s room, or simply shoved them right back into the hand of the bartender who, as the evening wore on, dealt with his fate by calmly handing the glass to the next person who came along. —G.C.
A spoonful of Dr. Pepper will not relieve constipation, hives, excessive acidity, morbidity, sterility, bile, eczema, hysteria, bronchitis or what ails you in general. “Folks still splash it on. And some rub it on. But the only claim we make is that Dr. Pepper is soothing to youngsters suffering post-tonsillectomies. Teenagers have also discovered that they can drink a lot of it without getting pimples.”
That was W.W. Clements, the balding, genial, Dr. Pepper-swigging president of the company making the second-oldest soft drink in the nation, and he’s telling us what we wished we’d known through all those Coke-addicted, acne-plagued years of adolescence. While we were religiously “taking” Dr. Pepper at 10, 2, and 4, we were also drinking Coke the rest of the time, defeating the only therapeutic purpose all of us who still have our tonsils could have gleaned from it.
Perhaps the mythical healing quality of Dr. Pepper which will be hardest to see go by the wayside is as a sure-fire cure for constipation. Many were the days that we avoided drinking prune juice and other more hideous remedies by assuring our parents that we had “taken” our Dr. Pepper, which they, and we, were convinced came from mashed and otherwise transformed prunes, with purgative quality still intact. This remedy Mr. Clements firmly denies.
But if old legends die hard, Dr. Pepper seems to be making a strong effort to leave them back in the Southern territory that has been its stronghold for generations. The drive to expand the market for Dr. Pepper into the rest of the country and on around the world is concentrating strictly on its qualities as a thirst quencher. Even the 10, 2, 4 clock that was the trademark of the Dr. Pepper bottle has passed into history. Dr. Pepper means business, and when a company means business, old myths give way to new realities.
Nowadays, the only people entitled to claim miraculous properties for Dr. Pepper are the company’s stockholders. In old age, the company has blossomed anew as an elixir of profit, enjoying 140 consecutive months of sales increases. Sales have doubled over the past five years: from $28 million in 1966 to $63 million last year. Corporate profits have also doubled: $2.8 million in 1966 to $6.7 million last year. “We have only begun to move,” says Clements. “I expect our business to double again in the next five years, and in the next five years after that. We will become a quarter billion dollar company.”
Such effervescent predictions may, in fact, be a bit conservative. Advancing under a steady barrage of catchy television commercials, Dr. Pepper has staged an impressive five-year march out of the South to go national in a big way. For example, Dr. Pepper entered the New York market in 1970, sold 18 million bottles the first two weeks, and by last May New York equalled 95 per cent of the sales volume of Dr. Pepper’s largest plant in Dallas, which cranks out 10 million bottles monthly.
A Dallas-born journalist named David DeVoss tells of entering a Manhattan delicatessen and ordering a kosher salami on rye, with a cold and sparkling Dr. Pepper. “It simply blew my mind,” DeVoss reports. “It was like the merging of two great cultures; munching on a big kosher pickle and washing it down with my Dr. Pepper almost brought tears of joy. The two complemented each other like wine and cheese.”
President Clements, whose personal consumption rate is ten bottles of Dr. Pepper daily, admits that his drink is an acquired taste. “Once I get Dr. Pepper down their throats and tell them about it, I’m in business,” he insists. “If we get a person to drink three bottles a day for three days, we have a strong grip on a steady customer.”
The “misunderstood” aspects of the drink, however, are not mere Madison Avenue jargon. Because of its familiar deep burgundy color, many initiates in Brooklyn, Chicago and Los Angeles expect Dr. Pepper to taste like a cola, which it definitely is not. The distinctive taste lies halfway between a cola and a cherry-flavored soft-drink, although it is not a cherry-coke of teenager fame. Not being a cola has had important financial impact on the company. In 1966, the Food and Drug Administration formally declared Dr. Pepper not to be a cola, allowing Dr. Pepper to use cola bottling franchises off limits to other colas, because of licensing arrangements which provide for exclusive cola territorial assignments.
Being a natural fanatic about Dr. Pepper, Clements (who claims his wife even bastes turkey with the stuff) long believed that the rest of the country and the world would be willing to swim in it the way Texas and the South have done, if given the chance. “For years,” he says, “Dr. Pepper was considered a Southern drink. Why? Because we only marketed in the South. Southerners were the only ones who knew of it and drank it.”
And drink it they do. In Texas, its birthplace, Dr. Pepper is consumed in staggering quantities. About every three days, on the average, every man, woman and child in the state drinks a Dr. Pepper. In Dallas, the corporate headquarters, residents drink an average of 250 bottles annually. And in Waco, the birthplace of the drink, 270 bottles per person per year are consumed.
At the moment Dr. Pepper is number four in the total U. S. soft drink market. Even so, says Clements, “Our market share nationally is only about four per cent. All you have to do is look at the high market share we enjoy in the Southwest (number two, behind Coca-Cola) to know that we are growing faster in this market than any other soft drink. Our development of sales volume in new markets over the last five years has actually been faster than it ever was in our heartland.” This year, the company is launching new franchises in Japan as well as Mexico City. “Since our success in New York,” Clements reports, “we have been inundated with franchise requests from around the world. But we are proceeding cautiously.”
Slow-poking is very much the Dr. Pepper style, but strangely, so too is audaciousness. For example, a former company president of the 1950s named Wesby R. Parker could qualify for the merchandising hall of fame. Parker was disturbed about winter sales dropoffs, particularly during an abnormally severe winter which left sales near ground zero. Parker spent several days in his Dallas kitchen experimenting at the stove with a wide variety of soft drinks, including his own. He discovered that when heated Dr. Pepper alone retained its flavor. And when a slice of lemon was added to the steamy cup a hot Dr. Pepper was actually drinkable.
The company claims that hot Dr. Pepper retains its flavor because it is based on natural fruit flavors. Artificial flavorings immediately lose their taste when heated. Whatever the reason, the company has been shrewdly promoting hot Dr. Pepper since the mid-1950’s and reports that winter sales now equal summer sales. Although hot Dr. Pepper being vendored at the Cotton Bowl on brisk football days is a familiar scene, the practice has now spread to five other non-Texas, non-Southern stadia around the country.
In Alaska, for example, where hot Dr. Pepper receives a supreme test, consumption averages a 24-bottle carry-home case per person annually. And lets the enormity of such a promotion escape the Dr. Pepper-conscious Texan, imagine, if you can, shivering at the Yale Bowl and ordering up a steaming cup of ginger-ale.
The company also claims that because of its distinctive flavor Dr. Pepper is the least taste-affected of all diet soft drinks. Sugarless soft drinks account for a fat 15 per cent of the soft drink market nationally. Clements flatly predicts that Dr. Pepper will be number one in the sugarless market by the end of this year. “We blot out that strong saccharine flavor in diet drinks,” he says. “We are currently number one in Dallas, St. Louis and Denver, and we’re moving up quickly everywhere else.”
The heart of the Dr. Pepper business is selling its concentrated syrup to its 515 bottlers around the country at a flat 88 1/12 cents a gallon. The company’s financial investment in its franchise bottlers is limited to paying half of their individual advertising costs. In addition, Dr. Pepper owns and operates about half a dozen bottling plants, mostly in Texas. By selling its syrup in concentrated form, the firm avoided having to expand the large Dallas headquarters which for years had doled out non-concentrated syrup from 5,000 gallon vats. What has been expanded, however, is a quality control lab which constantly checks on the production of the 515 bottlers. Clements is continually travelling and tasting as he goes. “I had the best tasting Dr. Pepper recently in Cincinnati,” he reports. “Those boys are doing a fine job.”
Clements’ status as a Dr. Pepper connoisseur began in 1935, when he joined the company while still an undergraduate at the University of Alabama. To help pay school expenses during the depression, he became a route salesman for Dr. Pepper, which had only recently gained a foothold in the Deep South. He did so well that when he graduated he was offered a job with the company as a Southern regional representative. He has been with Dr. Pepper ever since, and has moved steadily up the ranks.
A devout Baptist who always carries a pocketful of marbles etched with the golden rule which he distributes to friend and foe alike, Clements is a relaxed, confident man who enjoys nothing better than to lean back at his large desk, swig a Dr. Pepper and puff on a thick, black stogie. Staring at you with his friendly, twinkling eyes and sporting a warm smile, he mouths nothing but the friendliest of words for the Coca-Cola company and their Mr. Pibb challenge. “Better to let sleeping dogs lie,” President Clements says softly. “Our sales have actually improved since Mr. Pibb came along.”
He denies the obvious: Mr. Pibb doesn’t taste like Dr. Pepper. “Dr. Pepper,” says its president, “tastes entirely different from anything else on the market. It is only natural to say it tastes like something else you are familiar with; but to say that Dr. Pepper tastes like anything else is like saying an orange tastes like an apple.”
Under Clements’ direction the company has set its sights on the 13 to 30-year-old market, those consumers who are not yet totally committed cola drinkers. Dr. Pepper’s president believes that the after-30 crowd is stubbornly committed in their tastes, and so, operating on the rather safe principle that young people are receptive to new taste sensations, the company is busy dispensing free samples on high school and college campuses around the country. The $13 million advertising campaign, mostly on national television, emphasizes the adventurous quality involved in trying a different-tasting Dr. Pepper.
All of which should draw a few guffaws in Waco, where the drink is about as familiar and adventurous as tap water. But probably not even Wacoans know that the trade name immortalizes a real Dr. Pepper, who was a Richmond, Virginia, physician. The doctor’s son-in-law worked in a Waco drugstore as a clerk, moonlighting as a beverage chemist. The young man, whose name, unfortunately, is forgotten (at least by Dr. Pepper researchers) worked up a formula with 38 ingredients for use with soda water. The formula was perfected by R. S. Lazenby, who purchased it from the young chemist and, as a favor, agreed to name the drink after the chemist’s father-in-law, who didn’t think that a Waco drug clerk was quite good enough for his daughter.
Whether the attempt to mollify the Virginia doctor by naming a concoction suspiciously like snake medicine in his honor actually did succeed, is lost to history. We know that Lazenby made a slow but steady start at marketing his beverage around the state. Within a few years, the small bottling plant at Waco was operating near capacity. Modest but consistent sales growth dominated the company’s long history until the rather sleepy, comfortable Dallas concern finally began flexing its muscles nationally.
“This is a conservative outfit,” admits Clements. “So we move with great deliberation. By the time we decided to go national we had a solidly established base of operations in the South and Southwest. We had, through long trial and error, weeded out good bottling franchises from among the weak sisters. And through long years of experience, we had developed proven marketing techniques.”
Armed with such obvious strengths, Clements began planning the national campaign 11 years before becoming president in 1969. As vice president for marketing, he was the key figure in shaping and formulating the expansion of franchising operations around the country. “The soft drink business,” he says, “is basically a local enterprise. Actually, it is as depression-proof as any business can be. But consumption patterns vary. Diet drinks, for example, are more popular in the North, East, and West, than they are in the Midwest or South. Also, canned drinks account for a larger share of volume in these same markets than in Texas or the Midwest. Our franchise people are on top of these local situations. They have to be because we have no way of knowing how sales patterns change from one locale to another.”
Looking ahead, Clements sees few problems clouding Dr. Pepper’s future. “With a market share of approximately four per cent in the United States, we have a fantastic opportunity for domestic growth,” he said. “For this reason we are not seeking any other acquisitions. Nothing else interests us but capitalizing on the growth opportunities of Dr. Pepper.”
Such sharply focused thinking is just fine with the company stockholders, who are happily floating atop a rising tide of Dr. Pepper sales. At the company’s Dallas headquarters, a pretty receptionist greeted us by reaching into a cooler and withdrawing a frosty bottle of the venerable beverage. With an approving smile she watched us take a polite swig. “Isn’t it good?” she asks.
It’s a happy, enthusiastic place these days. Even W. W. Clements whistles while he works. Escorting us around the plant recently, he stamped out one of his thick stogies and began to whistle a catchy little tune, familiar to just about every American who watches television any time during prime time. We heard a few bars and then caught ourselves humming the words: “Doctor Pepperrr…so misunderstood…”