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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Ageless Wonder Concocted To Settle Upset Stomachs, Pepsi Remains A Hit After A Century

Randall Chase Associated Press

From its humble beginning 100 years ago, a fizzy concoction created by a pharmacist as an elixir for aiding digestion has been the choice of generations.

Having been passed from the Pepsi Generation to the New Generation and now to GeneratioNext, Pepsi-Cola is the country’s second-most popular soft drink.

The Pepsi story began in the late 1890s at a drug store fountain in New Bern, N.C., when Caleb Bradham began offering a new beverage touted as a digestive aid and energy booster.

“He made a lot of different remedies for a lot of different ailments,” said Bob Stoddard of Upland, Calif., who recently finished the book “Pepsi, 100 Years.”

Brad’s drink, as it was known, consisted of one ounce of syrup and five ounces of soda water mixed with a spoon. It became an immediate hit.

In 1898, Bradham changed the name to Pepsi-Cola. In 1902, he launched the Pepsi-Cola Co. from the back room of his pharmacy, and he was awarded the Pepsi-Cola trademark in 1903.

Bradham had visions of greater things. At first, he mixed, packaged and sold his syrup, then started bottling his drink in 1905. He then began awarding franchises - the first two in Charlotte and Durham - and by 1910 the business had expanded to 24 states and 280 bottlers.

Shortly after World War I, Bradham fell victim to volatile sugar prices. He stockpiled sugar at 22-1/2 cents a pound, then watched it plummet to 3-1/2 cents a pound. The loss, combined with poor marketing, forced him into bankruptcy. He sold the trademark and business in 1923 for $35,000.

The company changed hands four times by 1928 and went bankrupt again in 1931. The trademark was resurrected, however, by Charles Guth, owner of Loft Inc., a chain of candy stores and soda fountains along the East Coast, who tinkered with the soft-drink recipe, its only alteration.

With the nation in the throes of the Depression, Guth in 1934 began selling 12-ounce bottles of Pepsi for a nickel, the same price as the typical 6-ounce bottles of other soft drinks.

“It was kind of belly wash for poor folks; of course there were a lot of poor folks in the ‘30s and ‘40s,” said John Shelton Reed, a sociology professor at the University of North Carolina at Chapel Hill, N.C., and an expert on the South.

Consumers responded enthusiastically to an advertising tune touting “Twice as much for a nickel,” and Pepsi became so popular that Loft Inc. merged with the subsidiary to become the Pepsi-Cola Co.

In the late 1950s, the company stopped advertising Pepsi as a bargain brand and began focusing its advertising on young people. Over the years it has been touted by such celebrities as Joan Crawford, Michael Jackson, Tina Turner, Michael J. Fox and cosmonauts on the Russian space station Mir.

Pepsi’s marketing campaigns were so successful that Coca-Cola, which has 44 percent of the U.S. market to Pepsi’s 31 percent, nonetheless decided to offer a sweeter New Coke. Coke drinkers stayed true to the original, first made in 1886 at a pharmacy in Atlanta, and the New Coke flopped.

“The sincerest form of flattery was that New Coke tried to taste like Pepsi, but it didn’t really work,” Reed said.

Part of Pepsi’s modern success has been selling the image of youth.

“That’s always been their bag,” said Emanuel Goldman, an analyst for PaineWebber in San Francisco. “They’ve really been good at that.”

Pepsi is trying to maintain its hip image with a new packaging scheme that features a stylized, 3-D globe logo against a blue ice backdrop.

The company, which in 1965 changed its name to PepsiCo, has expanded into other beverages, such as Mountain Dew and Lipton’s Ice Tea, as well as snack foods like Doritos and Lay’s. The company’s venture into the restaurant business with Taco Bell, Pizza Hut and KFC ended last year when they were spun off.

Goldman says PepsiCo is in good shape. The company’s profits for 1997 were $2.14 billion on revenues of $20.92 billion, and Pepsi is now bottled in nearly 150 countries.

Meanwhile, at the town where it all began on the southeastern coast of North Carolina, residents of New Bern plan to honor their famous son with a parade, flotilla, and fireworks display on April 3-5. An exhibit of Pepsi memorabilia will be on display and a Pepsi store and museum are being built on the site of Bradham’s corner drug store.

Stoddard, 47, is bringing his entire collection of some 3,000 Pepsi items to add to an exhibit that will go on display March 12.

Stoddard, who gave up his job selling industrial packaging about six years ago, now makes a living selling Pepsi collectibles and serving as a consultant to Pepsi. And, he says, he’s always been loyal to the brand.

“I switched over to Diet Pepsi, but I still drink at least a six-pack a day,” he said. “I love it.”

MEMO: This sidebar appeared with the story: PEPSI’S PRODUCT LINE Some PepsiCo products: BEVERAGES Pepsi-Cola Mountain Dew Slice Mug root beer Lipton’s Iced Tea drinks Frappuccino Josta All Sport Aquafina bottled water.

SNACKS Cheet-os Doritos Fritos Lay’s potato chips Ruffles potato chips Tostitos Cracker Jack

This sidebar appeared with the story: PEPSI’S PRODUCT LINE Some PepsiCo products: BEVERAGES Pepsi-Cola Mountain Dew Slice Mug root beer Lipton’s Iced Tea drinks Frappuccino Josta All Sport Aquafina bottled water.

SNACKS Cheet-os Doritos Fritos Lay’s potato chips Ruffles potato chips Tostitos Cracker Jack