Pepsi Veteran Pops Up Again With King-cola

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Walter S. Mack figures life was easier back in 1938, when he took Pepsi-Cola, then a syrup sold through candy stores, and in only three years turned it into the second largest selling soft drink. He's in the cola business once again, but with a greater challenge. "Back then I only had Coke to deal with," he recalls. "Now I have to fight both Coke and Pepsi."

At 85 Mack has left retirement behind to become chairman of King-Cola, a three-year-old New York company that expects to capture between 1.5% and 2% of the $12.5-billion cola market this year and between 7% and 10% by 1987. "I'm an ambitious fellow," Mack says.

To do battle with the big boys, Mack has surrounded himself with a group of former Pepsi executives who have a total of 188 years of soft drink experience. His vice-chairman is in his 70s and the man in charge of the secret formula is in his 60s.

Coke and Pepsi have around 1,000 territorial bottlers between them. King-Cola has only 26 "kingdoms," covering 41 states, but these larger divisions, Mack claims, make his system more efficient. Unlike the giants, King-Cola delivers only to central warehouses, not to individual supermarkets. That slices into the largest cost of a bottle of pop: transportation. In most markets, Mack's cola is 20? to 30? cheaper -- depending on the size of the purchase -- than Coke or Pepsi.

Beating the competition with a pricing strategy is nothing new for Mack. Long before most of the Pepsi generation was born, he promoted Pepsi with a radio commercial that hit Coke in the pocket: "Twice as much for a nickel, too." Says Mack, "We wouldn't have started King-Cola unless our back cost was a dollar a case less than theirs. Coke and Pepsi can match our price sometimes, but they can't stay there and make money."