PepsiCo, Inc.

Caleb Bradham, a pharmacist in New Bern, North Carolina, created a carbonated drink in 1893 that he sold from his pharmacy under the name "Brad's Drink." The formula contained pepsin — a digestive enzyme — and kola nuts, which provided caffeine. In 1898, he renamed it Pepsi-Cola, combining pepsin and kola. Bradham built a bottling network and sold the syrup to pharmacies across the Southeast. He had inadvertently created one of the most successful consumer products in history.

Bradham bet heavily on sugar prices remaining high after World War I — stockpiling sugar inventory in anticipation of continued price rises. Sugar prices collapsed in 1921. Bradham lost everything. Pepsi-Cola Company filed for bankruptcy in 1923. The brand was sold to a candy company called Craven Holdings. It went bankrupt again in 1931 during the Great Depression. The twice-bankrupt cola brand was acquired by Charles Guth, the president of the Loft candy chain, for $10,500 — and offered for sale to Coca-Cola, which declined to buy it.

During the Depression, Pepsi introduced 12-ounce bottles for five cents — the same price as Coca-Cola's 6.5-ounce bottles. The radio jingle "Pepsi-Cola hits the spot, twelve full ounces, that's a lot" became one of the first advertising jingles in radio history. The value proposition was simple and irresistible: twice as much for the same price. Pepsi grew dramatically, establishing it as a genuine competitor to Coca-Cola for the first time.

Pepsi launched the "Pepsi Challenge" in 1975 — blind taste tests conducted in shopping malls that consistently showed consumers preferred Pepsi's sweeter formula over Coca-Cola. The campaign was devastating: Coca-Cola's own internal tests confirmed the results. The panic at Coca-Cola led directly to the 1985 decision to change Coca-Cola's formula — "New Coke" — which triggered one of the most catastrophic consumer responses in corporate history and forced Coca-Cola to reintroduce the original formula as "Coca-Cola Classic" within 79 days.

PepsiCo was formed in 1965 through the merger of Pepsi-Cola and Frito-Lay, the snack food company. The combination created a consumer goods company far more diversified than Coca-Cola. PepsiCo subsequently acquired Quaker Oats (and Gatorade), Tropicana, and dozens of other food and beverage brands. By 2023, PepsiCo's revenues exceeded $90 billion — nearly double Coca-Cola's — despite Coca-Cola's dominance in the global cola market. The twice-bankrupt pharmacy drink had been rejected by Coca-Cola and grown larger than its rejector.