Pepsi-Cola

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Pepsi-Cola

In the early 1890s the beverage that evolved into Pepsi-Cola originated in the North Carolina drugstore of Caleb Bradham. Patterned after other soft drinks and patent medicines of the time, the concoction was initially known as "Brad's Drink." In 1893 the name of the drink was changed to Pepsi-Cola, and a few years later the Pepsi-Cola company was formed. Like industry leader Coca-Cola, the drink was largely made of sugar and water. Combining the sugar and water with other oils and extracts unique to Pepsi gave it a "citrus" flavor and aroma. Unlike Coca-Cola, however, Pepsi did not find success quickly. Instead Pepsi struggled to challenge Coca-Cola for dominance in the nearly century-long Cola War. Through much of its history Pepsi often found itself playing the role of David to Coca-Cola's Goliath. In the early years of the twentieth century, however, it did not appear as if the beverage would be around long enough to challenge anyone.

Through a combination of poor business decisions, limited distribution, and less than insightful marketing Pepsi spent many of its early years on the fringes of the soft drink industry. By the early 1930s the company manufacturing the beverage had gone bankrupt twice, and rights to manufacture the drink were held by a man who was employed in the candy industry. Charles Guth of Loft Incorporated, attracted to Pepsi only after Coca-Cola refused to grant price concessions on the sale of Coke in his drugstores, resurrected the beverage in 1932. Guth's early fortunes with Pepsi were no better than those of his predecessors, and he was nearly forced into bankruptcy. At one point Guth sent ambassadors to Atlanta to attempt to sell the rights of Pepsi to Coca-Cola. Assuming that the drink would soon disappear of its own accord Coke officials refused to purchase the company. In the decision not to purchase Pepsi, Coke officials, to their lasting regret, allowed Guth to continue to manufacture the drink. A desperate man, Guth soon hit upon a marketing scheme that forever changed the face of the soft drink industry.

Anxious for any means to sell Pepsi, Guth was persuaded to sell the drink in used beer bottles that were 12 ounces in size. Twice the size of the normal six ounce soft drink, he marketed Pepsi at ten cents per bottle, twice the price of the six ounce beverage. Sales of the new larger Pepsi continued to lag, and the drink's future appeared dim. Then, in a move that spoke more of desperation than marketing savvy, Guth decided to sell the 12-ounce Pepsi for five cents per bottle. In Depression era America the "Twice as Much for a Nickel Too" campaign was a success. Within six months of the start of the marketing campaign, sales of Pepsi had grown tremendously and it was soon on its way to prosperity. However, due to the extralegal measures he had used to acquire Pepsi-Cola Charles Guth was forced out of the company and its future.

Despite its growing success, Pepsi manufacturers did not have the advertising capital of industry leader Coca-Cola. Therefore, they were forced to invest in nontraditional sources of advertising. Seizing the new medium of radio, the attributes of Pepsi were soon being hailed in the nation's first musical jingle. The Pepsi jingle not only spurred interest in the drink, but it also revolutionized radio advertisements. Pepsi was also sold through art shows, skywriting, and comic strips. Sales of Pepsi continued to grow until the limitations placed on the drink's ingredients were imposed during World War II.

During World War II, sales of Pepsi, while substantial, paled in comparison to those of Coca-Cola. After the conflict ended Pepsi's identification with youth, labor, and minorities as well as being seen as the "poor man's drink" limited the drink's acceptance. The identification with value that had served Pepsi well during the Depression and war years was less suited for the growing middle class who was looking for prosperity and material comforts. Accordingly Pepsi advertising began to target new American suburban markets and stress its connection to modernity and glamour. Whereas Coke was marketed as a product of nostalgia, Pepsi highlighted its appropriateness for the future. In doing so Pepsi advertising largely identified itself as a youth product.

Slogans such as "Now it's Pepsi for those who think young," and "Come Alive, You're in the Pepsi Generation," made Pepsi appealing among the youth market. Beginning in the 1960s Pepsi began to cement its reputation as the drink for the younger market. Pepsi consistently targeted young people, labeling them the "Pepsi Generation," a slogan that would go beyond advertising into popular jargon. In the 1980s social critics labeled the 18-30 generation as "Generation X" as well as the "Pepsi Generation."

Since the 1960s Pepsi has emphasized itself as the drink of the present and the future. Even though many industry observers argued that it was the taste of Pepsi that caused Coke to change its formula, Pepsi does not challenge the status of Coke. Though Pepsi has had the role of the underdog to Coca-Cola throughout the century, its existence as an alternative to Coke has helped fuel the Cola Wars to the delight of consumers.

—Jason Chambers