Pepsi's History - It was the summer of 1898.
 

                              The summer of 1898, as usual, was hot and humid in 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 his
                             customers. He succeeded beyond all expectations because
                             he invented the beverage 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. He
                             did so by concocting his own special beverage, a soft drink.

                             His creation, a unique mixture of kola nut extract, vanilla and
                             rare oils, became so popular his customers named it "Brad's
                             Drink." Caleb decided to rename it "Pepsi-Cola," and
                             advertised his new soft drink. People responded, and sales
                             of Pepsi-Cola started to grow, convincing him that he should
                             form a company to 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. 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
                             so that people could drink it anywhere.
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                             The business began to grow, and on June 16, 1903,
                             "Pepsi-Cola" was officially registered with the U.S. Patent
                             Office. That year, Caleb sold 7,968 gallons of syrup, using
                             the theme line "Exhilarating, Invigorating, Aids Digestion." He
                             also began awarding franchises to bottle Pepsi to
                             independent investors, whose number grew from just two in
                             1905, in the cities of Charlotte and Durham, North Carolina,
                             to 15 the following year, and 40 by 1907. By the end of
                             1910, there were Pepsi-Cola franchises in 24 states.
 
 

                             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. They were the
                             cornerstone of the Pepsi-Cola enterprise. By 1907, the new
                             company was selling more than 100,000 gallons of syrup per
                             year.

                             Growth was phenomenal, and in 1909 Caleb erected a
                             headquarters so spectacular that the town of New Bern
                             pictured it on a postcard. Famous racing car driver Barney
                             Oldfield endorsed Pepsi in newspaper ads as "A bully
                             drink...refreshing, invigorating, a fine bracer before a race."
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                             The previous year, Pepsi had been one of the first companies
                             in the United States to switch from horse-drawn transport to
                             motor vehicles, and Caleb's business expertise captured
                             widespread attention. He was even mentioned as a possible
                             candidate for Governor. A 1913 editorial in the Greensboro
                             Patriot praised him for his "keen and energetic business
                             sense."

                             Pepsi-Cola enjoyed 17 unbroken years of success. Caleb
                             now promoted Pepsi sales with the slogan, "Drink
                             Pepsi-Cola. It will satisfy you." Then cameWorld War I, and
                             the cost of doing business increased drastically. Sugar prices
                             see sawed between record highs and disastrous lows, and so
                             did the price of producing Pepsi-Cola. Caleb was forced
                             into a series of business gambles just to survive, until finally,
                             after three exhausting years, his luck ran out and he was
                             bankrupted. By 1921, only two plants remained open.

                             It wasn't until a successful candy manufacturer, Charles G.
                             Guth, appeared on the scene that the future of Pepsi-Cola
                             was assured. Guth was president of Loft Incorporated, a
                             large chain of candy stores and soda fountains along the
                             eastern seaboard. He saw Pepsi-Cola as an opportunity to
                             discontinue an unsatisfactory business relationship with the
                             Coca-Cola Company, and at the same time to add an
                             attractive drawing card to Loft's soda fountains. He was
                             right. After five owners and 15 unprofitable years,
                             Pepsi-Cola was once again a thriving national brand.
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                             One oddity of the time, for a number of years, all of
                             Pepsi-Cola's sales were actually administered from a
                             Baltimore building apparently owned by Coca-Cola, and
                             named for its president.

                             Within two years, Pepsi would earn $1 million for its new
                             owner. With the resurgence came new confidence, a rarity in
                             those days because the nation was in the early stages of a
                             severe economic decline that came to be known as the Great
                             Depression.

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Last updated:  November 4, 1999
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