Donald Keough, who as president of Coca-Cola Co. led the world's largest soft-drink maker during one of its most successful eras and one of its worst with the failed introduction of New Coke, has died. He was 88.
He died today at Emory Saint Joseph's Hospital in Atlanta, the company said. He had pneumonia.
As Coca-Cola's president from 1981 to 1993, Mr. Keough and then-CEO Roberto Goizueta were credited with steering the business to a golden age of global growth. During that period, revenue rose to $14 billion from $5.9 billion and the average earnings gain was about 15% annually.
The executives also had setbacks, most notably reformulated Coke, which was their response to rival PepsiCo.
In April 1985, Mr. Goizueta announced that Coca- Cola changed the formula of its flagship soda for the first time in its then 99-year-old history. He called New Coke "smoother, rounder, yet bolder" and "the boldest marketing move in the history of the consumer goods business."
Consumers didn't agree. They rejected the drink and flooded the company's headquarters with phone calls and letters demanding a return to old Coke.
Castro's view on Coke
"The Edsel of the 80s," said Roger Enrico, then-president of Pepsi-Cola USA, comparing New Coke with Ford Motor Co.'s famous design flop of the 1950s. Cuban dictator Fidel Castro, seeing a misstep by a model of U.S. corporate strength, called New Coke "a sign of American capitalist decadence."
Less than three months later, Mr. Keough and Mr. Goizueta announced that the company was pulling New Coke from store shelves and reintroducing the original formula, rebranded as Coca-Cola Classic. New Coke was renamed Coke II and relegated to the dustbin of corporate history.
"Some critics will say Coca-Cola made a marketing mistake," Mr. Keough said at the time, according to Mark Pendergrast's 1993 book, "For God, Country and Coca-Cola." "Some cynics will say that we planned the whole thing. The truth is, we are not that dumb, and we are not that smart."
Donald Raymond Keough was born on Sept. 4, 1926, in Maurice, Iowa. His father was a farmer and cattleman who lost most of his money in the Great Depression.
Mr. Keough enlisted in the U.S. Navy in 1944, and later enrolled at Creighton University in Omaha, Nebraska, on the G.I. Bill. He studied philosophy and joined the debate team, graduating in 1949.
After college, Mr. Keough stayed in Omaha, working at Paxton & Gallagher Co., a wholesale grocer. Focusing on marketing and advertising, he remained at the company as it grew through mergers.
In 1959 it was acquired by C.A. Swanson & Sons, a local maker of frozen foods, including so-called TV dinners. The combined company was renamed Butternut Foods Co., according to the Greater Omaha chamber of Commerce website. It merged with Houston-based Duncan Coffee Co. in 1962, and later became part of Coca-Cola.
"I never changed businesses," Mr. Keough said in "My One Big Break," a 2004 book of recollections by executives. "I started in 1950, kept my head down, and I felt privileged to work for each of them. I jumped into a little creek, which became a river, which turned into a gulf, which grew into an ocean. All I ever did was swim."
In 1967, Mr. Keough headed marketing at Coca-Cola's foods division and became the unit's president four years later. In 1973, he moved to corporate headquarters, where he served as executive VP of Coca-Cola USA. Keough was named president of Coca-Cola Co. and a director in 1981, posts he held until retiring in 1993, according to the company's website. He rejoined the board in 2004 and retired again in 2013.
He was named nonexecutive chairman of Allen & Company, an investment-banking firm based in New York, in 1993. That year he also became chairman of DMK International, his family's investment company.
Mr. Keough joined other boards, including Berkshire Hathaway Inc., run by his neighbor back in Omaha, Warren Buffett, whose company is Coca-Cola's biggest shareholder, with a stake of 9.1%.
He said it was Buffett who urged him to turn a speech about "The Ten Commandments for Business Failure" into a book, published in 2008. They include "quit taking risks; be inflexible; isolate yourself; assume infallibility; play the game close to the foul line; don't take time to think; put all your faith in experts and outside consultants; love your bureaucracy; send mixed messages; and be afraid of the future."
Mr. Keough added a bonus 11th commandment in the book: "Lose your passion for work, for life."
Mr. Buffett, in an e-mailed statement today, said, "You can sum up Don Keough's life in three words: Everybody loved him."
Mr. Keough was elected a fellow of the American Academy of Arts & Sciences in 2002, and inducted into the Junior Achievement U.S. Business Hall of Fame in 2003.
He was board chairman emeritus and a life trustee of the University of Notre Dame. The South Bend, Indiana-based university announced in October the creation of the Donald R. Keough School of Global Affairs, its first new college in almost a century. Keough and his wife, Marilyn, had donated gifts to the Notre Dame totaling $50 million.
His survivors include his wife; their daughters Kathleen Keough Soto, Shayla Keough Rumely and Eileen Keough Millard; sons Michael Keough, Patrick Keough and Clarke Keough; and 18 grandchildren and 2 great-grandchildren.
~ Bloomberg News ~