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Pepsi

Soft drink by PepsiCo

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Through Soft drink, Great Depression and Soviet Union

Pepsi, originally created in 1893 by Caleb Bradham and named "Brad's Drink," was first sold in his drugstore in New Bern, North Carolina. Renamed "Pepsi-Cola" in 1898 due to its supposed digestive benefits, its name was shortened in marketing to "Pepsi" as early as 1951. Early on, Pepsi struggled with financial stability, going bankrupt in 1923 but was subsequently purchased and revived by Charles Guth, who reformulated the syrup. Pepsi gained popularity with the introduction of a 12-ounce bottle during the Great Depression and marketing strategies like the "Nickel, Nickel" jingle, doubling sales by emphasizing its value.

The mid-20th century saw Pepsi targeting the African American market, a then-untapped demographic, with positive portrayals and endorsements from prominent figures, boosting its market share. Pepsi's rivalry with Coca-Cola, highlighted by the "cola wars", led to significant cultural and market competition, including the "Pepsi Challenge" taste tests and the introduction of New Coke in response. Pepsi's expansion into international markets has seen varied success, with notable ventures into the Soviet Union via a landmark barter deal and enduring popularity in certain regions over Coca-Cola.

Despite occasional controversies, such as an aborted Madonna advertisement and the "Pepsi Number Fever" fiasco in the Philippines, Pepsi has remained a prominent global brand, partly thanks to innovative marketing campaigns and sponsorships in sports and entertainment. PepsiCo have also launched other drinks under the Pepsi brand, such as Diet Pepsi and Pepsi Max, that make up the brand portfolio today on top of the original Pepsi cola.

History

Pepsi was first invented in 1893 as "Brad's Drink" by Caleb Bradham, who sold the drink at his drugstore in New Bern, North Carolina. Bradham sought to create a fountain drink that was appealing and would aid in digestion and boost energy.

It was renamed "Pepsi-Cola" in 1898 due to its formula's inclusion of essence of pepsin. This was a then-common medicinal preparation made from the digestive enzyme pepsin, with glycerin and a mild alcohol added. It was often used as an additive to make bitter medicines palatable, as well as for curdling milk. Although this point is seemingly disputed by modern writers, the earliest print advertisements for the beverage carried the subtitle "The Pepsin Drink", and boasted its presence for the sake of relieving indigestion (dyspepsia), as well as alleviating headaches and drowsiness. A key selling point in a 1902 advertisement claimed that a glass of Pepsi-Cola contained a teaspoon's worth of the concoction. The original recipe also included sugar and vanilla.

Bradham would incorporate the Pepsi-Cola Company on December 24, 1902, and moved the bottling of Pepsi from his drugstore to a rented warehouse in 1903. That year, Bradham would sell 7,968 gallons of syrup. The next year, Pepsi would be introduced in six-ounce bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield was the first celebrity to endorse Pepsi, describing it as "A bully drink...refreshing, invigorating, a fine bracer before a race." The advertising theme "Delicious and Healthful" was then used over the next two decades.

In 1923, the Pepsi-Cola Company entered bankruptcy—in large part due to financial losses incurred by speculating on the wildly fluctuating sugar prices as a result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Megargel was unsuccessful in efforts to find funding to revive the brand and soon Pepsi-Cola's assets were purchased by Charles Guth, the president of Loft, Inc. Loft was a candy manufacturer with retail stores that contained soda fountains. He sought to replace Coca-Cola at his stores' fountains after The Coca-Cola Company refused to give him additional discounts on syrup. Guth then had Loft's chemists reformulate the Pepsi-Cola syrup formula. On three occasions between 1922 and 1933, the Coca-Cola Company was offered the opportunity to purchase the Pepsi-Cola Company, which it declined on each occasion.

Growth in popularity

During the Great Depression, Pepsi gained popularity following the introduction in 1934 of a 12-ounce (355 mL) bottle. Prior to that, Pepsi and Coca-Cola sold their drinks in 6.5-ounce (192 mL) servings for about $0.05 a bottle. With a radio advertising campaign featuring the popular jingle "Nickel, Nickel" – first recorded by the Tune Twisters in 1940 – Pepsi encouraged price-conscious consumers to double the volume their nickels could purchase. The jingle is arranged in a way that loops, creating a never-ending tune:

"Pepsi-Cola hits the spot / Twelve full ounces, that's a lot / Twice as much for a nickel, too / Pepsi-Cola is the drink for you."

Coming at a time of economic crisis, the campaign succeeded in boosting Pepsi's status. From 1936 to 1938, Pepsi-Cola's profits doubled.

Pepsi's success under Charles Guth came while the Loft Candy business was faltering. Since he had initially used Loft's finances and facilities to establish the new Pepsi success, the near-bankrupt Loft Company sued Guth for possession of the Pepsi-Cola company. A long legal battle, Guth v. Loft Inc., then ensued, with the case reaching the Delaware Supreme Court and ultimately ending in a loss for Guth.

The Pepsi-Cola name would be shortened to simply "Pepsi" as early as 1945, when their bottles transitioned from standard paper labels to the applied color label (ACL) process, which involved screen-printing enamel paint graphics directly onto the bottle at a high temperature. The neck of the new bottle design displayed a small ovoid Pepsi-Cola logo in color on the front, and a truncated version of the script reading "Pepsi" on the opposite side. This motif would be carried over when a new bottle design and logo were introduced in mid-1951. When the drink was rebranded in 1962, two versions of the same logo with either name were used interchangeably. By 1969, the drink would almost exclusively be referred to as "Pepsi", with the full name retained for secondary uses.

Second half of the 20th century

Pepsi-Cola began a continuous rise in popularity and sales growth starting in the 1950s under the leadership of Alfred Steele and later Donald M. Kendall. With Pepsi having been seen as a "poor man's Coca-Cola" that was "popular in the kitchen but it rarely arrived in the parlor", Steele gravitated production from economy to quality. The sugar content in Pepsi-Cola syrup was also lowered slightly to desweeten the taste. Combined with company and production changes, Pepsi sales had boomed by 1956 and gradually narrowed the gap to its large competitor.

By the mid 1950s, amid a time when cola products were booming all over the world, the drink was being bottled in over 700 plants across seventy countries. These helped make Pepsi-Cola a popular product in many markets, including in the Middle East following the opening of a plant in Cairo, and the Beirut Daily Star referred to the "Pepsi-Cola culture" when distribution began in Lebanon in 1952. Notably, in 1974 Pepsi became the very first American consumer product to be produced, marketed and sold in the Soviet Union.

In 1958, the "swirl" design bottle began to be used for distributing Pepsi. In 1963, the drink began to be distributed in America in larger 16-ounce (473 mL) bottles, and 12-ounce cans were introduced as well. Diet Pepsi, a second Pepsi product and the first extending the brand, was launched in 1964.

Beginning in the mid 1960s, aggressive and effective marketing of the product (see Pepsi Generation and Pepsi Challenge), mostly aimed at the younger generation, drastically increased the drink's popularity to become a formidable competitor to long-time market leader Coca-Cola. Pepsi machines were also installed in the White House cafeteria when Richard Nixon, who already had a close relationship with Pepsi, assumed the American presidency in 1969. Although total Pepsi sales never overtook that of Coca-Cola, the latter's lead in the American market had been narrowed to 1½-to-1 as of 1980 (from 5-to-1 in 1950), and Pepsi was outselling its rival in the "take-home" market, which includes supermarkets.

In November 1984, PepsiCo announced that it would, at least in the US, exclusively use high-fructose corn syrup (HFCS) to sweeten its canned, bottled and fountain Pepsi-Cola, replacing cane sugar. The Coca-Cola Company also did the same around the same time.

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