Home » Business News • Spotlight • US business news » How Pepsi Briefly Had Its Own Massive Navy
How Pepsi Briefly Had Its Own Massive Navy
https://www.whatjobs.com/news/usa/us-business-news/how-pepsi-briefly-had-one-of-the-biggest-navies-in-the-world
By Hugh Fort in Business News, posted May 2, 2024
When you think of Pepsi, the iconic logo, its endless battle with Coca-Cola and its famous commercials with Michael Jackson.
What you probably don't think of is the company as a naval power.
Believe it or not, it was, albeit briefly.
It all unfolded after a shrewd marketing move from Donald Kendall, the head of Pepsi's International Division back in 1959.
A heated debate was raging over the merits of capitalism and communism was raging between then-American President Richard Nixon, and Nikita Khrushchev, the leader of the Soviet Union.
Kendall managed to persuade Nixon to get Khrushchev to taste the Pepsi product as an example of the fruits of a capitalist system.
The Soviet leader loved the fizzy drink, and bottles were handed round to his entourage.
The move led, eventually, to a deal to distribute Pepsi in the Soviet Union.
The issue was that the Soviet unit of currency, the ruble, was worthless outside of Russia, so the two parties had to resort to another payment method.
In the end, it was agreed Russia would provide Pepsi with an equal amount of Stolichnaya vodka, which could be sold in the U.S.
The deal meant Pepsi was the first capitalist product to be sold behind the Iron Curtain.
Need Career Advice? Get employment skills advice at all levels of your career
The Pepsi Navy - the sixth largest in the world
The deal was successful for nearly 30 years before Pepsi realised Russia's consumption of its drink greatly exceed America's desire for vodka.
In the late 1980s, Russia had a lot of vodka and very little cash.
In a great example of out-of-the-box thinking, Russia sold Pepsi a frigate, a cruiser, a destroyer and 17 submarines.
This briefly gave Pepsi the sixth largest naval fleet in the world.
However, it was short-lived as the soft drink giant sold the entire fleet as scrap metal.
The Soviet Union fell in 1991, which caused a major headache for Pepsi in terms of the ongoing sales of its product.
But the company will have the history of being the first company to sell into the Soviet Union, and, probably, the only corporation to be a leading naval power.
Something its rival Coca-Cola will never be able to say.
Follow us on YouTube, Twitter,LinkedIn, and Facebook.
