Coca-Cola had three chances to buy Pepsi and turned down every one
Between 1922 and 1933, while Pepsi lurched through bankruptcy and changes of owner, Coca-Cola was offered the company three separate times. It said no each time. Within a few decades the struggling brand it passed over had become its fiercest rival, narrowing Coke's lead in America from five to one down to one and a half.
The drink began in 1893 as Brad's Drink, mixed by Caleb Bradham at his drugstore in New Bern, North Carolina, meant to taste good while settling the stomach and lifting energy. In 1898 he renamed it Pepsi-Cola after pepsin, a digestive enzyme preparation, and early advertisements promised relief from indigestion, headaches and drowsiness. The company was incorporated on Christmas Eve 1902, and syrup sales jumped from 7,968 gallons in 1903 to 19,848 the following year once six-ounce bottles arrived.
Then came collapse. Speculating on sugar prices, which swung wildly after World War I, drove the firm bankrupt in 1923. Charles Guth, head of the candy chain Loft, bought its assets because Coca-Cola had refused him bigger syrup discounts for his soda fountains, and he had Loft's chemists rework the formula. His later triumph with Pepsi led the struggling Loft to sue him for the company, a fight Guth eventually lost in the Delaware Supreme Court.
The turnaround rested on a simple offer. In 1934, while rivals sold 6.5-ounce bottles for a nickel, Pepsi began selling twelve ounces for the same coin. A looping radio jingle drove the point home during the Depression, and profits doubled between 1936 and 1938.
After the war, Alfred Steele pushed the drink away from its image as a cheap substitute, even trimming the sugar slightly, and by the mid 1950s it was bottled in more than 700 plants across seventy countries. Youth-focused campaigns such as the Pepsi Challenge sharpened the rivalry, and in 1974 Pepsi became the first American consumer product made and sold in the Soviet Union. By 2023 it ranked as the second most valuable soft drink brand in the world, behind only Coca-Cola.
Source: Pepsi
