Read Online Barbarians at the Gate by Bryan Burrough, John Helyar - Free Book Online Page A

period, he was less a business dynamo than a corporate Eddie Haskell, sucking up to Schaeberle while kicking the Beaver in the teeth. Whatever the case, it worked: Within three years, twenty-one of the company’s top twenty-four officers were Standard Brands men. The Nabisco officers had been killed so softly that Schaeberle never realized what had happened. At meetings, he would say, “It’s so great to see all these young people around the table.”
    As Johnson’s power grew, much of Nabisco’s future began to be planned at all-night drinking sessions at his apartment. The roster hadn’t changed much in ten years. There was Peter Rogers, still The Rook; Martin Emmett, The Big E; and Bob Carbonell, El Supremo, among others. Johnson, The Pope, used the sessions to throw out all manner of ideas—for restructuring the company, for hastening the Old Guard’s exit, for new products. Many were profanely hooted down, and Johnson, sipping Scotch, would cheerfully withdraw and move to the next.
    Even as he reshaped its executive suite, Johnson moved to mold Nabisco’s business mix to his own tastes. On its face it was an impossible task—Nabisco’s vast, entrenched bureaucracy seemed impervious to change—but with his newfound sway over Schaeberle, Johnson made steady progress. It was always Johnson initiating, Schaeberle assenting; Johnson spinning out sweet reason, Schaeberle accepting it. “You know,it just doesn’t make sense to have anything that’s not number one or number two in its industry,” Johnson would say. “That’s right, Ross,” Schaeberle would reply.
    In the last quarter of 1982 alone, Johnson sold J. B. Williams, Freezer Queen frozen foods, Julius Wile wine and spirits, Hygiene Industries shower curtains, and Everlon Fabrics draperies. At the same time, he cut loose some of Standard Brands’s old businesses: Chase & Sanborn and high-fructose syrup. Johnson discovered he was an excellent auctioneer. Nobody thought that J. B. Williams, home of over-the-hill brands such as Geritol and Aqua Velva, would fetch more than $50 million. But Johnson unloaded it for twice that, applying his usual charm and telling potential buyers how badly Nabisco had been running the business. He convinced them that Williams had worlds of unexploited potential. “I learned,” he said, “you always tell people how badly you’ve been running the goddamned company, so they’ve got some upside.”
    As successful as his manipulations were, Johnson could see it would take something like wartime conditions to attain a complete overhaul of Nabisco Brands. To his surprise, he soon reached that juncture in a period that came to be known as “the cookie wars.”
    Nabisco had fairly invited attack on its position atop the multibillion-dollar cookie business. It had grown soft: Its bakeries were old, its profit margins were big, and it dominated its few competitors. The company’s Pearl Harbor came in Kansas City. The attacker was Frito-Lay, the nation’s premier salty-snack maker, home of brands such as Ruffles, Doritos, and Tostitos. Frito-Lay hit the Kansas City shelves in mid-1982 with a new line of soft cookies called Grandma’s. Cocky Frito executives boasted publicly how quickly Grandma’s would thrash Nabisco, which didn’t make a soft cookie. Nabisco’s lock on the cookie business, they predicted, would break, and the $2.5 billion market would become “a Coke-Pepsi kind of thing.” The Frito generals looked as good as their word in the early days, capturing 20 percent of the Kansas City market.
    Even as Johnson scrambled to meet that onslaught, another attacker struck. Procter & Gamble, the Cincinnati consumer goods giant, unveiled its own Duncan Hines line of soft cookies. P&G began construction on a massive bakery, applied for a patent on its cookies, and started its own assault on Kansas City. Within days the city became a cookie-crazed battleground. Spurred on by coupons, special displays, and advertising,