Pepsi

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.

Bradham bet heavily on sugar prices remaining high after World War I. Sugar prices collapsed in 1921. Bradham lost everything. Pepsi-Cola Company filed for bankruptcy in 1923. The brand was sold, then 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. It remains one of the most expensive rejections in corporate history.

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 itself 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. Pepsi had won a battle. Coca-Cola won the war.

PepsiCo reported revenues of approximately $91.5 billion for 2024 — nearly double Coca-Cola's revenue of approximately $46 billion. The disparity reflected PepsiCo's transformation from a cola company into a diversified food and beverage conglomerate: Frito-Lay (merged in 1965) generated more revenue than the entire Pepsi beverage portfolio. Quaker Oats, Tropicana, Gatorade, Doritos, Cheetos, and Lay's all sat under the PepsiCo umbrella. The twice-bankrupt pharmacy drink that Coca-Cola had been offered for $10,500 had grown into a company larger by revenue than its rejector — without ever beating Coca-Cola in the cola market it had tried to take.