THE PEPSI-COLA STORY
PepsiCo Inc is a Fortune 500, American Multinational Corporation
headquartered in Purchase, NY and a world leader in convenient
snacks, foods and carbonated and non-carbonated beverages with
revenues of more than $43 billion and over 198,000 employees.
Besides the Pepsi-Cola brands, the company owns the brands
Quaker Oats, Gatorade, Frito-Lay, SoBe, Naked, Tropicana,
Copella, Mountain Dew, Mirinda and 7-Up. 7-Up is especially for
outside USA markets.
It only became known as PepsiCo when it merged with Frito Lay in 1965. Until 1997, it
also owned KFC, Pizza Hut, and Taco Bell, but these fast-food restaurants were spun off
into Tricon Global Restaurants, now Yum! Brands, Inc. PepsiCo purchased Tropicana in
1998 and Quaker Oats in 2001. Today, The PepsiCo Family has three major divisions of
the PepsiCo family: PepsiCo Americas Beverages, PepsiCo Americas Foods, and PepsiCo
Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006 with her
"Performance with Purpose" philosophy that led it to the real corporate excellence.
THE SUMMER OF 1898,
As usual, was hot and humid New Bern, North Carolina. So a young pharmacist named
Caleb Bradham began experimenting with combinations of spices, Juices, and syrups,
trying to create a refreshing new drink to serve to his customers. He seceded beyond
expectations, inventing the beverage now known around the world as… PEPSI-COLA.
Caleb Bradham knew that to keep people returning to his pharmacy, he would have to
turn it into a gathering place. Like many pharmacists at the turn of the century, he had a
soda fountain in his drugstore, where he served his customers refreshing drinks that he
created himself. His most popular creation was a unique mixture of carbonated water,
kola nuts, vanilla and rare oils, named "Brad's Drink" by his customers.
Caleb decided to rename it "Pepsi-Cola," and advertised his new soft drink to enthusiastic
customers. Sales of Pepsi-Cola started to grow, convincing him to form a company and
market the new beverage. In 1902, he launched the Pepsi-Cola Company in the back
room of his pharmacy, and applied to the U.S. Patent Office for a trademark. An official
patent was awarded on June 16, 1903. At first, he mixed the syrup himself and sold it
exclusively through soda fountains. But soon Caleb recognized that a greater opportunity
existed—to bottle Pepsi-Cola so that people everywhere could enjoy it.
BUILDING THE BUSINESS
Advertising Pepsi-Cola as "Exhilarating, Invigorating, Aids Digestion," the business began
to grow. Caleb sold 7,968 gallons of syrup in 1903. Two years later, he awarded two
franchises to bottle Pepsi-Cola to independent investors in Charlotte and Durham, North
Carolina. In 1906, the number of franchises grew to 15, and leapt to 40 by 1907. By the
end of 1910, there were Pepsi-Cola franchises in 24 states, and the company was selling
more than 100,000 gallons of syrup per year.
Building a strong franchise system was one of Caleb's greatest
achievements. Local Pepsi-Cola bottlers, entrepreneurial in spirit
and dedicated to the product's success, provided a sturdy
foundation for a growing company. They were then, and continue
to be today, the cornerstone of the Pepsi-Cola enterprise.
Caleb's business expertise and advertising savvy captured
widespread attention for his company. He erected a Pepsi-Cola
headquarters so spectacular that the town of New Bern featured it
on a postcard. The company was one of the first in the United
States to switch from horse-drawn transport to motor vehicles,
and a 1913 editorial in the Greensboro Patriot praised Caleb for his
"keen and energetic business sense." He was even mentioned as a
possible candidate for governor.
Pepsi-Cola's advertisements changed, too. Famous racing car
driver Barney Oldfield endorsed Pepsi in newspaper ads as "a bully
drink ... refreshing, invigorating, a fine bracer before a race."
Caleb promoted Pepsi sales with the slogan, "Drink Pepsi-Cola. It
Will Satisfy You."
The outbreak of World War I changed the U.S. financial landscape,
and the cost of doing business increased drastically.
Sugar prices fluctuated wildly between record highs and disastrous
lows, and so did the cost of producing Pepsi-Cola. In 1923, Pepsi-
Cola was bankrupt. Caleb returned to his pharmacy and sold the valuable Pepsi-Cola
trademark to Craven Holdings Corporation, the first of what would be several owners.
PEPSI-COLA HITS THE SPOT
The nation sank deeper and deeper into the Great Depression. Times were tough and five
cents was a lot to pay for a six-ounce soft drink. So, Guth decided to make Pepsi-Cola a
great value for hard-pressed consumers. In Baltimore, he offered twice as much Pepsi for
the same price as other soft drinks—a 12-ounce bottle of cola for just a nickel—and it was
a big hit. Consumers responded immediately, business boomed and Guth expanded the
idea throughout the Pepsi-Cola system.
During the 1930s, international expansion began. The
Pepsi-Cola trademark was registered in Latin America
and the Soviet Union, and franchises were awarded to
bottlers in Canada. In 1934, the company moved to a
new headquarters in Long Island City, New York, and
four years later Walter S. Mack was selected to be the
new president of Pepsi-Cola. Mack believed that
advertising could be a cornerstone of soft drink
marketing and introduced a comic strip, "Pepsi & Pete,"
to promote Pepsi's pricing advantage with the line
"Twice as Much for a Nickel." Other cola companies had
no choice but to lower their prices to compete. But
Pepsi retained its leadership with a catchy song about
its low price, with "twice as much for a nickel" as its lyrics. The tune, "Nickel, Nickel," was
the first advertising jingle to be played and heard coast-to-coast on network radio,
making broadcast and advertising history. In time, it became so popular that it was
recorded in 55 languages. More than one million copies were released to jukeboxes, and
the tune, renamed "Pepsi-Cola Hits the Spot," was even played in Carnegie Hall. In 1940,
LIFE magazine declared the jingle "immortal." In 2005, Advertising Age named it one of
the top ten of the past century, commenting, "This (spot) came at a time when no one
was using jingles." Eventually, Pepsi-Cola grew larger than the candy company that
owned it, and it was decided to change the name of Loft Incorporated to the Pepsi-Cola
World War II resurrected an old nemesis, sugar rationing, and the action that had
contributed to the company's downfall during World War I. But Mack, learning from past
mistakes, bought a sugar plantation in Cuba, and Pepsi continued to prosper. It was an
era of men and women in uniform serving their country overseas, answering great
challenges in distant lands. In keeping with the patriotic feelings of the era, Pepsi-Cola
adopted a new red, white and blue color scheme for its bottles, and opened a USO
Canteen in New York City's Times Square, where more than a million families recorded
messages to send to their young men and women serving all over the world.
PEPSI EXPANDS AROUND THE WORLD
After the war ended in 1945, Pepsi-Cola turned its attention to ideas that would capture
the spirit of a victorious America. The company moved its world headquarters to
Manhattan, and continued to expand overseas into Latin America, the Philippines and the
Middle East. At home, the company began experimenting with new bottle sizes, and for
the first time began to package Pepsi-Cola in cans.
But the post-war marketplace was changing rapidly. A new retail phenomenon called
supermarkets was beginning to appear, and in combination with equally dramatic changes
in the economics of producing soft drinks, Pepsi was forced to abandon its strategy of
selling the soft drink for half the price of its chief competitor. Soon, the long-running
"Nickel, Nickel" advertising was replaced with a claim more in keeping with energetic post
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war America, "More Bounce to the Ounce." Throughout this period, Pepsi's company
president Al Steele's constant traveling companion was his wife, known to America's film
fans as the glamorous movie star, Joan Crawford.
Many believe that it was stylish and sophisticated Miss Crawford who moved the company
away from its "value" theme of the '40s into the more sophisticated campaigns of the
'50s. A new logo incorporating the "bottle cap" was adopted, and Pepsi was no longer
advertised based on price, but as a lifestyle accompaniment. After Mr. Steele's death in
1959, Miss Crawford was elected a member of the board of directors.
During that era, Americans had become more weight conscious, and
Pepsi advertising reflected this cultural shift. Campaigns touted Pepsi's
low caloric content with slogans, "The Light Refreshment" and
"Refreshing without Filling. Innovation continued, and a distinctive new
"swirl" bottle was introduced in 1958. That same year, a new
advertising campaign, "Be Sociable, Have a Pepsi," was also launched.
Internationally, Pepsi continued to expand, and was now available in
At the 1959 American Exposition in Moscow, Pepsi-Cola International
president Donald M. Kendall arranged for Vice President Richard M. Nixon and Soviet
Premier Khrushchev to visit the Pepsi-Cola kiosk. The press snapped pictures of the two
world leaders sipping Pepsi, inspiring "Sociable" themed headlines in newspapers around
the world. "Sociable's" was the first Pepsi-Cola campaign to focus on young people as the
brand's major consumer target, and was soon followed by another youth-oriented
campaign that was to become Pepsi's persona, "Now It's Pepsi, for Those Who Think
THE PEPSI GENERATION
The stage was set for another advertising breakthrough. In the late 1950s, a demographic
phenomenon called the post-war "baby boom" would change forever the way Americans
would think, act and live. They were a new generation, embracing a new lifestyle and
heading into the future with a conviction that what lay ahead was
better than what lay behind.
Pepsi-Cola sensed that attitude and captured their spirit with a name
that has transcended time and continues to identify with Americans
today. They were the first "Pepsi Generation." This vanguard of active,
fun-loving, contemporary America would claim Pepsi as its own, under
the banner "Come Alive! You're in the Pepsi Generation." That daring
campaign, launched in the early '60s, set a new standard for
advertising. It captured, like no other, a portrait of America living life
to the fullest.
Ever since then, the spirit of that first Pepsi
Generation campaign has been an integral
part of America's best-loved and most
recognized advertising— "Join the Pepsi
People, Feelin' Free"..."You've Got a Lot to
Live. Pepsi's Got a Lot to Give"... "Have a
Pepsi Day!"... "Catch that Pepsi
Spirit!"..."Pepsi Now!"... "The Joy of
Pepsi"—campaigns that hold a mirror to the
face of America and reflect the best of it.
This is really what the Pepsi Generation set out to do in the first place. During its first 65
years, Pepsi-Cola Company sold only one product—Pepsi. But with the baby boom, not
only did the nation's population change, so did their dietary habits. So, in 1964, the
company developed a new low-calorie drink with a taste worthy of carrying the Pepsi-Cola
name: Diet Pepsi.
Initially advertised alongside Pepsi, Diet Pepsi later took on an identity of its own. One of
its earliest campaigns, "Girlwatchers," was built around a catchy jingle that became so
popular it was released as a commercial record and hit the Top 40 list.
In 1964, Mountain Dew, a regional soft drink favorite, became an
important new addition to the growing family of Pepsi-Cola brands, and its
advertising theme, "Ya-Hoo, Mountain Dew!" became the brand's instantly
recognizable signature. Serving Pepsi in cans had, by now, proved so
popular that full-scale commercial distribution began in 1965. That same
year, the Pepsi-Cola Company merged with a successful Dallas, Texas,
marketer of salty snacks, Frito-Lay, Inc., to form PepsiCo, Inc.—one of the
great consumer products companies on the U.S. business scene. Donald M.
Kendall was founder, and soon after the merger, the company opened its
first soft drink operations in Eastern Europe and Japan.
THE PEPSI CHALLENGE
A remarkable business phenomenon occurred as the 1960s gave way to the '70s. Business
people, the media and consumers began to observe that Pepsi, an upstart, aggressive
company, was challenging the dominant soft drink company, Coca-Cola, with increasing
success. The media named the competition "the cola wars," and as events were to prove,
it was to have far-reaching effects on the soft drink industry.
Throughout the fast-paced '70s, Pepsi continued to evolve. Larger serving-size bottles
were introduced, like 32-ounce and 64-ounce packages. Soon after, family-size bottles
became easier to use, thanks to lightweight, recyclable plastic bottles that, with
improvements in technology, eventually became lighter and stronger than glass. In 1970,
the company moved its headquarters from New York City to Purchase, New York. As
consumers changed, so did Pepsi, and the Pepsi Generation stayed in perfect harmony
with the temper of the times. Diet Pepsi continued its remarkable growth, and Mountain
Dew advertising appeared on national television for the first time. Overseas, some 15
years after U.S. Vice President Nixon and Soviet Premier Khrushchev visited the Pepsi-
Cola kiosk at the American Exposition, Pepsi became the first American consumer product
to be manufactured in the Soviet Union. Midway through the decade, The Pepsi Challenge,
a landmark international marketing strategy, was born when consumer test after
consumer test confirmed that more people preferred the taste of Pepsi over Coke.
The Pepsi Challenge campaign simply made that reality into advertising, with filmed taste
tests between Pepsi and Coke. The campaign made marketing history, and helped Pepsi
gain market share as well. By 1976, in an unprecedented development, Pepsi-Cola
became the single largest-selling soft drink brand in American supermarkets. By the time
the 1980s dawned, Pepsi was clearly the number one brand in take-home (grocery and
convenience store) sales. The diet market continued its growth, and Diet Pepsi grew with
it. Mountain Dew was also continuing to soar with help from a new advertising campaign,
"Give Me a Dew."
It's 1984. Almost no one noticed that the Pepsi Generation
celebrated its twentieth anniversary. But there was more
advertising history to be made centered on this theme this
time with pop music in a starring role. "Pepsi. The Choice of
a New Generation" was launched in 1984 and once again put
Pepsi on the leading edge of contemporary culture. In its
early stages, the New Generation campaign featured the
biggest entertainer of the time, Michael Jackson. He and his
famous "Billie Jean" starred in a series of Pepsi cola
commercial, merging the worlds of business and
entertainment in a way that no one had ever seen before.
The string of promotion successes, from the Pepsi
Generation up through The Pepsi Challenge and on into the
New Generation advertising, was having an effect in places
other than Pepsi headquarters. The company's biggest rival, Coca-Cola, stung by the
growth and prominence of Pepsi, abandoned its century-old Coke recipe in favor of
a new product formulated to taste more like Pepsi. However, consumers quickly
rejected the new Coke, and in short order, Coca-Cola was forced to reinstate the
original product under a new name, Coca-Cola Classic. Pepsi President Roger Enrico
declared victory in the cola wars, and awarded Pepsi employees with an unexpected
holiday to celebrate.
Throughout the '80s, a long list of stars and superstars lent their magic to Pepsi, including
pop music icons Lionel Richie, Tina Turner, David Bowie, Glen Frey and Gloria Estefan and
sports greats Joe Montana and Dan Marino. Geraldine Ferraro, the first woman vicepresidential
candidate in the U.S., starred in a Diet Pepsi spot. The irrepressible Michael J.
Fox brought a special talent, style and spirit to a series of Pepsi and Diet Pepsi
commercials. Michael Jackson returned to star in the first-ever episodic commercial, and
Pepsi made its first trip on the Space Shuttle, carried in a specially designed "space can."
As Pepsi extended its consumer reach through advertising, international expansion
continued. Pepsi crossed yet another new frontier by beginning distribution in China.
SOME ADVERTISING SLOGANS OF PEPSICO
* 1939–1950: "Twice as Much for a Nickel"
* 1950: "More Bounce to the Ounce"
* 1950–1957: "Any Weather is Pepsi Weather"
* 1957–1958: "Say Pepsi, Please"
* 1958–1961: "Be Sociable, Have a Pepsi"
* 1961-1963: "Now It's Pepsi for Those Who Think Young"
* 1963–1967: "Come Alive, You're in the Pepsi Generation"
* 1967–1969: "(Taste that beats the others cold) Pepsi Pours It
* 1969–1975: "You've Got a Lot to Live, and Pepsi's Got a Lot to
* 1975–1977: "Have a Pepsi Day"
* 1977–1980: "Join the Pepsi People (Feeling Free)"
* 1980–1981: "Catch That Pepsi Spirit" [David Lucas, composer]
* 1981–1983: "Pepsi's got your taste for life"
* 1983: "It's cheaper than Coke!"
* 1983–1984: "Pepsi Now! Take the Challenge!"
* 1984–1991: "Pepsi. The Choice of a New Generation"
* 1986–1987: "We've Got The Taste" (commercial with Tina Turner)
* 1987–1990: "Pepsi's Cool"
* 1990–1991: "You got the right one Baby UH HUH"
* 1990–1991: "Yehi hai right choice Baby UH HUH"
* 1991–1992: "Gotta Have It"/"Chill Out"
* 1992–1993: "Be Young, Have Fun, Drink Pepsi"
* 1993–1994: "Right Now" Van Halen song for the Crystal Pepsi advertisement.
* 1994–1995: "Double Dutch Bus" (Pepsi song sung by Brad Bentz)
* 1995: "Nothing Else is a Pepsi"
* 1995–1996: "Drink Pepsi. Get Stuff." Pepsi Stuff campaign
* 1996–1997: "Pepsi:There's nothing official about it"
* 1997–1998: "Generation Next" - with the Spice Girls.
* 1998–1999: "It's the cola" (100th anniversary commercial)
* 1999–2000: "For Those Who Think Young"/"The Joy of Pepsi-Cola"
* 1999-2006: "Yeh dil maange more" (Hindi - meaning "This heart asks for more")
* 2003: "It's the Cola"/"Dare for More" (Pepsi Commercial)
* 2005–2006: "An ice cold Pepsi. It's better than sex!" (Larry Sypolt)
* 2006–2007: "Why You Doggin' Me"/"Taste the one that's forever young"
* 2007–2008: "More Happy"/"Taste the once that's forever young" (Michael Alexander)
* 2008: "Pepsi Stuff" Super Bowl Commercial (Justin Timberlake)
* 2008: "Рepsi is #1" Тv commercial (Luke Rosin)
* 2008–present: "Something for Everyone."
* 2009–present: "Refresh Everything"/"Every Generation Refreshes The World"
* 2009-present: "Yeh hai youngistaan meri jaan" (Hindi - meaning "This is our young
country my baby")
* 2009-present: "My Pepsi My Way"(India)
As the 1990s began, so did a new era in Pepsi-Cola operations worldwide. The company
signed the largest trade agreement in history with the Soviet Union. Seeking long-term
growth, Pepsi invested in such high-potential markets as Southeast Asia, Eastern Europe,
Mexico and Argentina.
Back in the United States, the '90s ushered in a new generation of award-winning
advertising. The music legend Ray Charles joined the Pepsi family when—backed up by
the "Uh-Huh Girls"—he crooned, "You Got the Right One Baby, Uh-Huh!" for Diet Pepsi.
Supermodel Cindy Crawford helped introduce a new package design, and Pepsi, with the
help of basketball's superstar, Shaquille O'Neal, reminded America to "Be Young, Have
Fun, and Drink Pepsi."
Mountain Dew, including Diet Mountain Dew—by now the sixthlargest
soft drink trademark in the U.S.—carried its appeal to
Generation X on the shoulders of a group of Dew Crew. Pepsi and
Mountain Dew helped these brands to expand their appeal, and Slice,
a unique line of flavors, was added to the Pepsi soft drink portfolio.
Consumers continued to broaden their tastes in refreshment
beverages, and Pepsi broadened its product line and became a new
kind of company—a total beverage company. Now, in addition to
being one of the leading soft-drink marketers in the world, Pepsi-
Cola's products include water, tea, coffee drinks, juices, juice drinks
and soft drinks.
Through a partnership established with the Thomas J. Lipton
Company in 1991, Pepsi became the market leader in ready-to-drink
teas, with Lipton Brisk the number one brand in the marketplace.
Another partnership, with premier coffee retailer Starbucks, produced
Frappuccino, new, coffee-based, ice-cold refreshment that rapidly
became the nation's most popular ready-to-drink cold coffee. Pepsi
also made history when it introduced Aquafina purified bottled water.
Pepsi pioneered the concept of freshness dating, providing consumers with an easy-toread
product freshness code. The consumer-friendly "best if used by" date stamp initially
appeared on Diet Pepsi packaging and quickly became standard throughout the entire
range of Pepsi product offerings. Freshness dating has since become an industry-wide
practice. "GeneratioNext" was introduced in 1997, signaling a return to the long-running
Pepsi Generation theme, and updating it for a new era of Pepsi consumers. In 1998, when
Pepsi celebrated its centennial year, the Pepsi cans sported a fresh new look for the new
millennium. The new look, called "Globe," prominently features a stylized, threedimensional
Pepsi Globe set against a blue ice backdrop.
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THE NEW MILLANIUM
Entering the new millennium, Pepsi's world-class research and development team came up
with a series of popular new products. Mountain Dew was joined by new flavors: Mountain
Dew Code Red (a cherry-flavored Mountain Dew) and Mountain Dew LiveWire (an orangeflavored
Mountain Dew). Sierra Mist gave Pepsi its first national lemon-lime brand. Pepsi's
flagship brand now had company with one-calorie Pepsi ONE; Pepsi Twist, featuring a
twist of lemon; Pepsi Vanilla; and Pepsi Edge, a cola with half the calories and sugar of
Consumer demand for non-carbonated drinks skyrocketed and Pepsi delivered. By
acquiring the popular SoBe line of healthy refreshment beverages and by bringing aboard
new offerings such as Dole and Tropicana juices, Pepsi provided
consumers refreshment for every taste and for every time of day. On
the airwaves, over the Internet and around the water cooler, Pepsi's
first-class advertising and marketing turned heads and dominated
First, there was pint-sized actress Hallie Eisenberg, who won America's
heart as "The Pepsi Girl," introducing Pepsi's new "Joy of Cola"
campaign supported by the voices of Marlon Brando, Isaac Hayes and
Aretha Franklin. Later spots would feature "The Pepsi Girl" rocking with
Faith Hill and KISS. "The Joy of Pepsi" featured some of the most
popular music & sports icons singing Pepsi's praises— including Britney Spears, Shakira
and Beyoncé Knowles. Oscar winner Halle Berry added her star power to promote her
favorite lemon-flavored cola, Pepsi Twist.
PEPSI ENTERS THE DIGITAL AGE
Mountain Dew took full advantage of the Dew Dudes' love of the extreme. From headbutting
a mountain ram to tackling a cheetah, there was nothing this crew wouldn't do to
get their Dew. Alliances with other well-known companies kept Pepsi and its brands fresh
in consumers' minds and at the forefront of popular culture. A marketing relationship with
Yahoo!® led to a successful PepsiStuff.com promotion during which people could redeem
Pepsi points online for prizes. Pepsi's TV debut was its own music show, "Pepsi Smash," on
WBB and a weekly series, "Pepsi Musica" launched by Pepsi on the Telefutura network.
Pepsi also partnered with Apple Computer, Inc. and its red-hot iTunes site and iPod
portable music player to create a sweepstakes giving away free downloads and other
prizes. On the field, Pepsi partnered with the best—Major League Baseball, Major League
Today, the company continues to innovate, creating new products, new flavors and new
packages in varying shapes and sizes to meet the growing demand for convenience and
healthier choices. Pepsi is constantly on the lookout for ways to ensure that our
consumers can get the products they want, when they want them and where they want
From its humble beginnings over a century ago, Pepsi-Cola has grown to
become one of the best-known, most-loved products throughout the
world. And the company behind it—PepsiCo—has grown as well,
standing today as the premier marketer of refreshment beverages, juices and snack
PepsiCo got its start in 1965, when Pepsi-Cola and Frito-Lay merged to create a new
company. Since then, PepsiCo, Inc. has continued to grow, adding new brands and
product lines. Tropicana Products, Inc. joined the PepsiCo portfolio in 1998 and gives
PepsiCo the strongest brand name in juice.
The company hit a grand slam with its merger with The Quaker Oats Company in 2001,
bringing together two incredibly strong and successful food and beverage companies. The
PepsiCo-Quaker union added the powerful Gatorade thirst quencher and its Quaker brand,
a symbol of healthy eating that extends PepsiCo's reach into breakfast, on-the-go foods,
and snacks for kids.
Today, PepsiCo is a $43 billion company, employing more than 198,000 people speaking
more than 40 languages around the globe. The company is consistently recognized for its
corporate citizenship, philanthropic efforts and diversity programs.