The fascinating tale of Pepsi’s unexpected naval acquisition dates back to the late 1950’s.
In 1959, during the Cold War, the United States and the Soviet Union were engaged in an ideological battle – communism vs capitalism.
In that time, the U.S.S.R. held an exhibition in New York to demonstrate its cultural and technological progress. In response, the United States established the American National Exhibition in Moscow, which featured various American products, including the famous carbonated beverage, Pepsi-Cola
The kitchen exhibition
In July 1959, then-Vice President Nixon and Soviet Premier Khrushchev engaged in a lively debate at the American National Exhibition. Set against the backdrop of a model American kitchen, they argued over the merits of capitalism versus communism. The exhibition also showcased a Pepsi-Cola booth, symbolizing the beverage’s American and Russian variants.
Pepsi for Khrushchev
Donald M. Kendall, an executive at Pepsi, embarked on a mission to have Khrushchev hold a Pepsi. On the exhibition’s eve, Kendall made a bold promise to Nixon. He aimed to showcase the trip’s significance, culminating in the staged moment where Khrushchev tentatively sipped Pepsi. This pivotal event was captured in a photograph, acquainting numerous Russians with the fizzy beverage for the first time.
The deal
The Soviet Union had a long-established tradition of exchanging vodka for Pepsi concentrate. However, the arrangement took an extraordinary turn when Pepsi served as an intermediary in a remarkable swap: the Soviets offered a fleet of 17 submarines, a cruiser, a frigate, and a destroyer – estimated to be worth around $3 billion – as compensation for their pending Pepsi delivery. This deal briefly made Pepsi the possessor of the world’s sixth-largest naval force.
Pepsi’s fleet
The company eventually sold the warships for scrap, but for a brief period, they boasted an impressive naval fleet.
This event marks a unique chapter in the history of both the beverage industry and naval affairs, where the worlds of carbonated drinks and military warships intersected.