Donald Kendall: helping Pepsi win the cold war

Donald Kendall was there to serve Nikita Khrushchev a Pepsi during a famous cold war détente with Richard Nixon. He went on to become a 20th-century marketing legend.

Donald Kendall
(Image credit: © Sergey Ponomarev/AP/Shutterstock)

Donald Kendall, who has died aged 99, was the “stuff of corporate Americana mythology”, says Forbes. Raised on a remote dairy farm in Washington state, he got to college on a football scholarship and earned two Distinguished Flying Crosses while serving in the Navy in World War II, “before landing a job” on Pepsi’s bottling line in 1947. It was the start of a transforming 44-year tenure at the company that saw Kendall emerge as “the man who made PepsiCo PepsiCo” – and a 20th-century marketing legend.

A cultural phenomenon

When Kendall became head of the company, aged 42, in 1963, after rocket-like ascension up the sales ladder, Pepsi “trailed so far behind arch-rival Coca-Cola that the folks in Atlanta didn’t even acknowledge the rivalry”, noted Fortune in 1987. Kendall changed all that – launching a high-profile marketing assault and pursuing it relentlessly until his retirement, by which time sales had grown “nearly 40-fold”, says The Wall Street Journal.

The company followed-up its mid-1960s “Pepsi Generation” campaign, which cast the drink as “the hip upstart cola for young people and Coke as staid and old fashioned”, with the “Pepsi Challenge” taste test. By the 1980s – when Pepsi stunned its bigger rival by signing the era’s biggest music star, Michael Jackson, to promote the brand in a record-setting $5m deal – the “cola wars” had become “a cultural phenomenon”, says The Economist. The battle was a risky gambit, but it paid off in two ways. First it helped fizzy drinks win a greater “share of throat”. Secondly, it produced “the world’s best marketers”. “They brought out the best in us,” Kendall later observed. “If there wasn’t a Coca-Cola, we would have had to invent one, and they would have had to invent Pepsi”.

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Nonetheless, the company he built differed substantially from the old rival, says The New York Times. Kendall took greater risks: pushing Pepsi into food production by merging it with crisp maker Frito-Lay in 1965 – and later acquiring (and then spinning off) Kentucky Fried Chicken, Pizza Hut and Taco Bell. He was also a more daring player on the international stage. In 1973, Pepsi’s long Russian campaign finally came good when Kendall signed a ground-breaking manufacturing deal – making Pepsi the first US consumer product to be made and marketed in the Soviet Union (he side-stepped currency exchange complications by accepting payment in Stolichnaya vodka rather than roubles). Later, when the USSR was collapsing, Pepsi struck another coup: negotiating the right to open two-dozen more plants by agreeing to buy 17 Russian submarines and three surplus warships for scrap. “We’re disarming the Soviet Union faster than you are,” he told politicians in Washington.

The end of a more civilised era

“Be sociable, have a Pepsi”, ran an early company slogan. Kendall personified it: combining close friendships with Republican politicians with a progressive outlook that saw PepsiCo become the first US firm to appoint African-Americans to top jobs, staring down a racist campaign against the move to do so. Above all, he was “a company patriot”, painting his home mailbox in Pepsi colours. Kendall’s death coincides with nostalgia for a more civilised political scene, before “mutual contempt… swamped partisan rivalry”, says Edward Luce in the Financial Times. It was still possible, when Barack Obama was rising, to joke about US elections as a choice between “Pepsi and Coke”. Sadly, no longer.

Jane writes profiles for MoneyWeek and is city editor of The Week. A former British Society of Magazine Editors editor of the year, she cut her teeth in journalism editing The Daily Telegraph’s Letters page and writing gossip for the London Evening Standard – while contributing to a kaleidoscopic range of business magazines including Personnel Today, Edge, Microscope, Computing, PC Business World, and Business & Finance.

She has edited corporate publications for accountants BDO, business psychologists YSC Consulting, and the law firm Stephenson Harwood – also enjoying a stint as a researcher for the due diligence department of a global risk advisory firm.

Her sole book to date, Stay or Go? (2016), rehearsed the arguments on both sides of the EU referendum.

She lives in north London, has a degree in modern history from Trinity College, Oxford, and is currently learning to play the drums.