The History of Pepsi Cola

A six-pack of Pepsi, 1960s. Tom Kelley Archive / Getty Images

"Brad's Drink": Pepsi's Humble Origins

Caleb Bradham of New Bern, North Carolina was a pharmacist. Like many pharmacists at the turn of the century, he had a soda fountain in his drugstore, where he served his customers refreshing drinks that he created himself. His most popular beverage was something he called "Brad's drink," a mix of sugar, water, caramel, lemon oil, kola nuts, nutmeg, and other additives.

It became an overnight sensation.

(Although some reports claim the original drink contained pepsin—which would go a long way to explaining the drinks’ subsequent name change — the use of the digestive enzyme is now regarded as the stuff of pure legend.) 

"Brad's drink", created in the summer of 1893, was later renamed in 1898 after he bought the trade name "Pep Cola" for $100 from a competitor from Newark, New Jersey that had gone broke. The new name was trademarked on June 16th, 1903. Bradham's neighbor, an artist, designed the first Pepsi logo, and ninety-seven shares of stock for Bradham's new company were issued.

Bankruptcy and Revival

After seventeen years of success, Caleb Bradham lost Pepsi Cola. He had gambled on the fluctuations of sugar prices during World War I, believing that sugar prices would continue to rise -- but they fell instead, leaving Caleb Bradham with an overpriced sugar inventory.

Pepsi Cola went bankrupt in 1923.

In 1931, Pepsi Cola was bought by the Loft Candy Company Loft president, Charles G. Guth, who reformulated the popular soft drink, tinkering with the recipe. Guth struggled to make a success of Pepsi and even offered to sell Pepsi to the Coca-Cola company, who refused to offer a bid.

The company soldiered on, increasing sales steadily by selling its 12-ounce bottles for nickel—a penny less than most of its competitors. Expansion continued in the 30’s with the company setting up bottling franchises across the country. 

In 1964 the company unveiled “Diet Pepsi” and acquired Mountain Dew, a citrus-flavored soft drink. One year later, the company merged with Frito-Lay company, becoming PepsiCo.

Throughout the next few decades, the drink continued to flourish, expanding its presence around the globe and battling soda industry leader Coca-Cola for market share with aggressive marketing campaigns and promotion, including its famous “Pepsi Generation” and "Pepsi Challenge" ad campaigns.

In 2015, the company announced it would discontinue using aspartame as the sweetener in Diet Pepsi, and replaced it with sucralose, another artificial sweetener. The move was pitched as addressing customer concerns about the health risks of aspartame. 

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Bellis, Mary. "The History of Pepsi Cola." ThoughtCo, Apr. 16, 2017, Bellis, Mary. (2017, April 16). The History of Pepsi Cola. Retrieved from Bellis, Mary. "The History of Pepsi Cola." ThoughtCo. (accessed January 23, 2018).