Like most pharmacists in the late 1800s, Caleb Bradham experimented with a variety of drink mixtures at his New Bern, North Carolina, soda fountain. One customer favorite was known simply as “Brad’s Drink,” made from a combination of carbonated water, caffeine-rich kola nuts, vanilla, and other essential oils. In 1898, Bradham decided to rename the recipe “Pepsi-Cola,” incorporating a reference to the digestive enzyme pepsin, which gave the sugary drink a healthful connotation. The first Pepsi logo featured the soft drink’s name written in whimsically scripted red text, similar to the label of a company that even then was a rival, Coca-Cola.
Four years later, Bradham formally established the Pepsi-Cola Company in his pharmacy’s back room, and by 1903 Pepsi had received its first patent. The earliest Pepsi syrups were mixed in individual batches by Bradham and sold exclusively to soda fountains, using the tagline “exhilarating, invigorating, aids digestion.” Pepsi-Cola was served from countertop dispensers, often straight into Pepsi-Cola branded paper cups. These rare early ceramic dispensers were elaborately decorated, and are difficult to find today.
In 1905, two independent bottlers in Charlotte and Durham, North Carolina, purchased the first Pepsi franchises. Pepsi’s subsequent expansion was exponential: the following year ...
During World War I, sugar prices fluctuated dramatically, wreaking havoc on the business; in 1923, the young company declared bankruptcy. Returning to the pharmacy business, Bradham sold his Pepsi-Cola trademark to the Craven Holdings Corporation. Stockbroker Roy C. Megargel was the next entrepreneur to try to make a go of it, purchasing the company and relocating its headquarters to Richmond, Virginia, but by 1931, Pepsi was bankrupt again.
Finally, Charles G. Guth acquired Pepsi and merged the business with his successful chain of candy stores along the east coast. Guth’s dissatisfaction with a Coca-Cola partnership led him to seek a new soda brand that would boost business in his shops. During the tough years following the Great Depression, Guth cut Pepsi’s shelf price by doubling the five cent serving size from 6 to 12 ounces. In response, the soda’s popularity surged.
In 1934, company president Walter S. Mack pushed the adoption of creative marketing techniques, like the “Pepsi & Pete” comic strip that continued to emphasize the drink’s low price via the antics of a pair of bumbling, overweight policemen. A new radio jingle called “Nickel, Nickel” also helped remind customers of their savings with Pepsi. The song was an instant hit, and became the first nationally-played advertising tune in the U.S., selling more than a million copies to soda-fountain jukeboxes.
As America entered World War II, Mack successfully avoided sugar rationing by purchasing the company’s first sugarcane plantation in Cuba. Pepsi’s packaging also changed to a new red, white, and blue color scheme to reflect the country’s wartime patriotism.
Meanwhile, Mack recognized an untapped African-American market, and pushed the company to develop advertising specifically tailored to this population. A 12-person team led by Edward F. Boyd began developing advertisements like the “Leaders in their Fields” series, profiling 20 prominent African-Americans, as well as ads using imagery of black middle-class families enjoying Pepsi at home. This marketing team also traveled to black communities around the U.S. where they promoted Pepsi, often focusing on the Coca-Cola company’s perceived opposition to integration.
After the war, newfound economic prosperity in the U.S. motivated Pepsi’s move from thrift-oriented marketing to ads emphasizing the fun Pepsi lifestyle, with taglines like the famous “More Bounce to the Ounce” and a switch to a new bottle-cap shaped logo. Finally, in 1955, the marriage of company president Al Steele to actress Joan Crawford brought a new level of glamour and sophistication to Pepsi-Cola. The postwar baby boom of the '50s introduced the company’s first campaigns aimed at teenage consumers, with advertisements referring to the “Pepsi Generation” and featuring phrases like, “Now It’s Pepsi, For Those Who Think Young.”
Though Pepsi vending machines were manufactured as early as 1937 by Vendorlator of Fresno, California, the convenience of total self-service was cemented during the 1950s. Bright blue Pepsi machines, like the VMC 27, which was small enough to sit on a countertop, popped up in corner stores and supermarkets across the country. In 1956, Vendorlator merged with its primary rival, Vendo, which had previously made most of the Coca-Cola company’s machines.
Simultaneously, Pepsi created popular transistor radios shaped like its distinctive cans or soda-fountain dispensers. In addition to churning out a plethora of print ads, calendars, tin signs, bottle openers, coolers, and advertising thermometers, Pepsi-Cola also branded teddy bears, drinking glasses, clocks, mechanical banks, model cars, and coffee mugs, too.
The company’s marketing during the '60s capitalized on weight-loss and nutrition trends, referring to Pepsi-Cola as a light, low-calorie soft-drink. In 1964, it introduced the new Diet Pepsi. Mountain Dew was acquired the same year, and shortly after the company merged with Frito-Lay, Inc. to form PepsiCo, Inc.
The so-called Cola Wars of the '70s, in which Pepsi and Coke vied for consumer loyalty and top sales, helped spur the groundbreaking Pepsi Challenge campaign. These ads used ‘live’ footage of blind taste-tests to prove that customers preferred Pepsi to Coca-Cola. Pepsi catered to a younger crowd by releasing several limited-edition lines of drinking glasses featuring cartoon characters and superheroes.
In 1984, a promotional partnership with Michael Jackson for a series of “Pepsi Generation” commercials turned thousands of adoring “Thriller” fans into Pepsi drinkers. Pepsi continued to join forces with iconic celebrities during the 1980s, including Tina Turner, Lionel Ritchie, Michael J. Fox, Gloria Estefan, Joe Montana, and even vice-presidential candidate Geraldine Ferraro.
Beginning in 1985, Pepsi sponsored various NASCAR events, including a 40-mile stock car race in Daytona Beach, Florida, creating an additional flurry of collectible merchandise, like baseball caps, t-shirts, and ticket stubs.
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