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THESUMMER OF 1898, 1898, THE SUMMER OF

AS USUAL, WAS HOT AND HUMID IN NEW BERN, NORTH CAROLINA. SO A YOUNG PHARMACIST NAMED CALEB BRADHAM BEGAN EXPERIMENTING WITH COMBINATIONS OF SPICES, JUICES AND SYRUPS, TRYING TO CREATE A REFRESHING NEW DRINK TO SERVE TO HIS CUSTOMERS. HE SUCCEEDED BEYOND ALL EXPECTATIONS, INVENTING THE BEVERAGE NOW KNOWN AROUND THE WORLD AS ... PEPSI-COLA.

3PEPSI’S BEGINNINGS PEPSI’S BEGINNINGS
Caleb Bradham knew that to keep people returning to his pharmacy, he would have to turn it into a gathering place. 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 creation was a unique mixture of carbonated water, kola nuts, vanilla andrare oils, named “Brad’s Drink” by his customers. Caleb decided to rename it “Pepsi-Cola,” and advertised his new soft drink to enthusiastic customers. Sales of

Caleb Bradham (circled) was too focused on serving his customers Pepsi-Cola to pose for this picture.

Pepsi-Cola started to grow, convincing him to form a company and market the new beverage. In 1902, he launched the Pepsi-ColaCompany in the back room of his pharmacy, and applied to the U.S. Patent Office for a trademark. An official patent was awarded on June 16, 1903. At first, he mixed the syrup himself and sold it exclusively through soda fountains. But soon Caleb recognized that a greater opportunity existed—to bottle Pepsi-Cola so that people everywhere could enjoy it.

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BUILDING THE BUSINESS BUILDING THEBUSINESS
Advertising Pepsi-Cola as “Exhilarating, Invigorating, Aids Digestion,” the business began to grow. Caleb sold 7,968 gallons of syrup in 1903. Two years later, he awarded two franchises to bottle PepsiCola to independent investors in Charlotte and Durham, North Carolina. In 1906, the number of franchises grew to 15, and leapt to 40 by 1907. By the end of 1910, there were Pepsi-Cola franchisesin 24 states, and the company was selling more than 100,000 gallons of syrup per year. Building a strong franchise system was one of Caleb’s greatest achievements. Local Pepsi-Cola bottlers, entrepreneurial in spirit and dedicated to the product’s success, provided a sturdy foundation for a growing company. They were then, and continue to be today, the cornerstone of the Pepsi-Cola enterprise.Caleb’s business expertise and advertising savvy captured widespread attention for his company. He erected a Pepsi-Cola headquarters so spectacular that the town of New Bern featured it on a postcard. The company was one of the first in the United

States to switch from horse-drawn transport to motor vehicles, and a 1913 editorial in the Greensboro Patriot praised

Caleb for his “keen andenergetic business sense.” He was even mentioned as a possible candidate for governor. Pepsi-Cola’s advertisements changed, too. Famous racing car driver Barney Oldfield endorsed Pepsi in newspaper ads as “a bully drink ... refreshing, invigorating, a fine bracer before a race.” Caleb promoted Pepsi sales with the slogan, “Drink PepsiCola. It Will Satisfy You.” The outbreak of World War I changed theU.S. financial landscape, and the cost of doing business increased drastically. Sugar prices fluctuated wildly between record highs and disastrous lows, and so did the cost of producing Pepsi-Cola. In 1923, Pepsi-Cola was bankrupt. Caleb returned to his pharmacy and sold the valuable Pepsi-Cola trademark to Craven Holdings Corporation, the first of what would be several owners.

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Caleb soldthe right to bottle Pepsi-Cola to entrepreneurs in other cities, creating a network of bottlers who, over time, would grow in numbers and bring Pepsi to every corner of America.

Soon, New York stockbroker Roy C. Megargel bought the Pepsi-Cola trademark and struggled to save the business. He moved the company’s operations from New Bern, North Carolina, to Richmond, Virginia, in 1923, and with...