More Bounce

Alfred N. (for Nu*) Steele is a 51-year-old executive who keeps a bottle on his desk and takes frequent swigs from it, even when he has visitors in his office. The bottle contains Pepsi-Cola, the drink that Steele took over two years ago when Walter Mack was kicked upstairs to chairman (later he left the company). At the time, Pepsi had gone flat: earnings were down 78% from their peak, dividends had been stopped. Since then, President Steele has proved that he has plenty of bounce to every ounce of his 208 Ibs. Last week he reported that in 1951 Pepsi-Cola Co. grossed $47,000,000 and more than doubled its net to $2.6 million (45-c- a share). This year's earnings, he added, should be still higher--and President Steele thinks that dividends may be resumed later this year.

Crystal Balls. A veteran adman and onetime vice president in charge of sales at Coca-Cola, Steele knew what was wrong with Pepsi when he took over. The accounting system was so slipshod that management did not even know the production figures of some of its biggest bottlers, or the breakdown of its costs. Says Steele: "They were operating by gazing into a crystal ball." Steele brought in a bunch of old Coca-Cola hands, set up a detailed method of cost accounting. He slashed costs by eliminating executive bonuses (he incorporated his own in his $96,000-a-year salary), whacking out dead wood, liquidating expensive sales con tracts, and cutting out the company's scholarships and art contests. He also lopped off a bottle-cap factory and a Cuban sugar plantation, because "our business is selling Pepsi." Steele won favor with bottlers with a new national ad campaign, including Faye Emerson on TV. As her neckline plunged, sales soared.

He split the cost with bottlers on their local advertising, helped them buy more trucks and bottles to fill the peak hot weather sales. He bought and revamped 17 bottling plants at a cost of $13 million, sold some of them to new bottlers, added more flavoring to his drink. To keep Pepsi uniform in all its 487 U.S.

bottling plants, he sent out mobile testing laboratories.

Movie Houses. The old management had frowned on selling Pepsi in vending machines; under Steele, 42,000 were add ed in 1951 alone. As a vice president at Coca-Cola, Steele had pushed Coke in movie houses. Now, he persuaded some of his old friends such as National Theaters Corp.'s Charles P. Skouras to put in Pepsi instead. Abroad, Steele moved into five new countries, bringing Pepsi's foreign markets to 44, and got some important people to push his product. (The Cairo bottler, for example, has close Farouk connections.) Pepsi-Cola's sales are still only 21% of Coca-Cola's, but Steele is not discouraged by that. Sales are at a rate of 130 million cases a year now, up 40% since Steele took over. Al Steele's goal is to double the figure.

*After his father's college fraternity, Sigma Nu.

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