The Pepsi navy: how a beverage company once possessed the 6th largest military in the world

There’s a cola rivalry in the United States with the country’s two largest manufacturers of carbonated beverages: Pepsi and Coke. Odds are, if you’re a soda drinker, you’ve probably decided that one of these dark bubbly liquids is superior to the other. And, if confronted with someone who prefers the other sugary drink, you probably don’t understand how someone could possibly like that particular refreshment over your preferred choice.

(clears throat. Using my best Kuiil impression: “This is the way.”)

Well, what if I told you there was, in fact, a correct answer to the question: which is better, Pepsi or Coke? Some of you will not like my assessment and, that’s fine, you can try to argue your point in the comments. However, the answer is simple: Pepsi is better.

I could prove my point with numbers, and how Pepsi has continuously outsold Coke (figures current as of 2019), despite the latter’s bigger brand, but you didn’t come here for something boring like statistics and economics, right? Instead, I’m going to tell you about the time Pepsi acquired one of the largest naval forces in the world.

Let’s take a little stroll back through time to the year 1959. Tensions between the communist Soviet Union and the capitalist United States were on the rise. To help ease the tensions, brought on from the Soviet’s first successful test of an intercontonental ballistic missile two years prior, and to demonstate some of the benefits of capitalism, President Dwight D. Eisenhower and the American government organized the “American National Exhibition” in Moscow and sent Vice President Richard Nixon as their envoy.

While there, Nixon and Soviet Premier Nikita Khrushchev got into a heated exchange about the efficacy of capitalism versus communism. The debate became so intense, Pepsi Vice President Donald Kendall decided to stop in, handing both gentlemen a cup of his company’s fizzy namesake beverage, immediately easing tensions.

(Ironically, Pepsi would attempt to use this same tactic some fifty-eight years later with another Kendall (of Jenner/Kardashian fame) in an effort to cool social tensions building between the African-American population and police around the country. It failed miserably.)

Khrushchev loved the drink so much, he negotiated with Pepsi and, in 1972, the beverage giant struck a deal to start exporting the product to the USSR. This was a major win for Pepsi and capitalism as the terms of the deal not only marked the first time a capitalist-created product was allowed to be sold in the Soviet Union, but it also blocked its largest competitor – Coke – from entering the market.

Unfortunately, thanks to the Soviet’s tightly-governed economy, the Rubble was basically useless outside the country’s borders. This meant an alternative method of payment for the bubbly beverage needed to be found. And, being the creative capitalists they were, the leadership at Pepsi devised a brilliant solution: trade the Pepsi for bottles of vodka.

For nearly a decade, this deal made Pepsi a lot of money. As their popularity in the Soviet Union grew, they received more bottles of vodka, which they would resell in the United States. However, in response to the the USSR’s invasion of Afghanistan in 1980, Americans began boycotting Soviet products, including its vodka. With this source of revenue dried up, Pepsi needed a different form of payment if they were to continue exporting their syrup.

And because Soviets loved their Pepsi so much, they struck a new – and very unorthodox – deal: they USSR traded a fleet of ships, including 17 submarines, a cruiser, a frigate, and a destroyer, in return to keep the soda flowing.

We all know war is profitable and it would be an amazing story if Pepsi took these ships and started a private military of mercenaries or pirates to plunder back the cost of dealing carbonated beverages, but sadly, it does not. The ships were sold for scrap and paid to keep the trade agreement alive until 1990.

When the time for a new deal came, Pepsi and the USSR were close to reaching an exclusive agreement that would be worth $300 million, give the rights to open Pizza Hut restaurants within the country, and allow the Pepsi bottling plants in the Soviet Union to double their productivity. But the Soviets had run out of derelict warships, so they agreed to build Pepsi a fleet of oil tankers, which they could lease for profit.

Pepsi would be soaring once the deal was finalized. Then, thanks in part to the large number of radical reforms imposed by then-president Mikhail Gorbachev, the USSR fractured. And so did the deal.

The fall of the Soviet Union ended Pepsi’s monopoly in the region, but for a brief moment in time, the North Carolina-founded business was one of the most powerful entities in the world and controlled the sixth largest navy on the ocean, ready to strike out against any who stood in its way … had it not been sold for scrap, of course.

So, Coke can keep its imaginary polar bears and its cool summertime vibes. Pepsi had a navy and for that reason alone, I know it’s the greatest cola on the market.


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