When work was warship: Pepsi’s navy was once the world’s 6th largest
The Pepsi-Coca-Cola war might have been largely fizz-ical. But if things ever came to a head, Pepsi would have been capable of blowing more than just bubbles, as it once had the world’s largest navies at its disposal.
End of the Cold War
After a long period of living behind the Iron Curtain, the Soviet Union emerged and shook hands with the United States under Nikita Khrushchev’s more liberal leadership. As a result of the shift in leadership, the relationship between the superpowers was smooth sailing, relieving the cold war scenario. The visit resulted in a permeation of liberal lifestyles in the USSR, via which Pepsi made inroads.
Pepsi’s arrival into the Soviet Union was a big deal, as it was the first time a firm from a capitalist country offered a popular consumer product there. Following talks, Pepsi began exporting its syrup to the Soviet Union in 1972, effectively shutting out Coca-Cola from the Soviet market. Nixon took Khrushchev to a soft drink vending machine the next day and offered him a Pepsi.
After the United States outlawed Soviet imports in 1980 as a result of the Soviet Union’s invasion of Afghanistan, Pepsi was compelled to offer Stolichnaya vodka payment, and made PepsiCo the exclusive distributor for it in the US. Pepsi’s Soviet sales rose for years as a result of the contract, but when Pepsi stopped accepting Russian vodka as payment, Russia had to find a new means to pay for its fix of Pepsi. The Soviet government and Pepsi negotiated an unusual agreement in 1989…
If it floats your boat…
In the years 1989 through 1990, PepsiCo secured expansion deals with the Soviet Union in 1989 and 1990 that involved the bartering of Soviet submarines, a destroyer, and other ships and tankers as payment, technically making Pepsi “the 6th largest military in the world” before selling its fleet.
Pepsi was taking the fizz out of the USSR’s military might rapidly, and disarming them faster than the US government.
USSR breaking down
From thereon, things changed quite dramatically. The USSR broke apart into separate countries in 1990, and Pepsico’s assets were confiscated. The shipyard had relocated to Belarus and Lithuania, which supplied mozzarella to Pizza Hut, just wanted US dollars in exchange. To make things worse, Coca-Cola entered the Russian market, breaking Pepsi’s monopoly.
And so ended the life of the world’s sixth-largest fleet, with Pepsi trading it all off to continue making its unique brand of bottled joy that is beloved by millions.