The Story of PepsiCo
PepsiCo is one of the best-known names in food and drinks. Its brands sit on store shelves and in coolers all over the world. Yet the story began in a small pharmacy in North Carolina.
Over more than a century, the business has been through failure, bold bets, and big changes. It has moved from a simple cola to a huge mix of snacks, drinks, and foods. This history shows how a company can fall, rebuild, and grow again and again.
This article walks through that journey in clear steps. You will see how PepsiCo started, how it changed, who shaped it, and what it is trying to become today.
How It All Started
The story begins with a pharmacist named Caleb Bradham in New Bern, North Carolina. In the 1890s, he mixed a cola-style drink at his drugstore soda fountain. At first, the drink was known as “Brad’s Drink.”
In 1898, Bradham renamed it “Pepsi-Cola.” He started to bottle the drink and sell it outside his store. Demand grew, and a small local favorite began turning into a regional brand.
Bradham formed the Pepsi-Cola Company in the early 1900s. He worked on building a network of bottlers in different states. At that time, soft drinks were becoming more popular as an everyday treat, so the timing helped his young company gain attention.
The First Big Ups and Downs
Success did not last long for the first Pepsi-Cola Company. World War I and its aftermath brought big swings in sugar prices. Sugar was a key cost for any soft drink company.
Bradham made a large bet on sugar prices. When that bet went wrong, the company ran into serious trouble. In the 1920s, Pepsi-Cola went bankrupt and its assets were sold.
Over the next years, different owners tried to rebuild the brand. The trademark and formula changed hands more than once. It was far from certain that Pepsi-Cola would survive, much less rival Coca-Cola.
Rebuilding the Brand
A turning point came in 1931. Businessman Charles G. Guth, who had ties to the candy and soda-fountain chain Loft, Inc., bought the assets of Pepsi-Cola. He wanted a cola he could serve in his own stores.
Guth had the formula adjusted and pushed for a new offer: a 12-ounce bottle of Pepsi for the same price as smaller rival servings. At the time, this meant a large bottle for five cents. It was a strong value message during the Great Depression.
This pricing move caught the public’s attention. Combined with new advertising, it helped Pepsi stand out. The brand’s image shifted from a struggling label to a smart choice for cost-conscious customers.
Pepsi Becomes a True Rival
In the 1940s and 1950s, leadership changes helped drive the company forward. The Pepsi-Cola Company, formed through mergers tied to Loft, gained more stable control of the brand. Strong managers focused on promotion and national reach.
Radio ads and catchy jingles helped Pepsi become part of popular culture. The famous “Pepsi-Cola hits the spot” campaign is one early example. These efforts made Pepsi feel modern and lively.
In the 1950s, Alfred N. Steele, a former Coca-Cola executive, became chief executive. He pushed large advertising campaigns and helped turn Pepsi into Coca-Cola’s main competitor. Pepsi was no longer a distant challenger. It became a major second player with its own personality.
From Pepsi-Cola to PepsiCo
The most important structural change came in the 1960s. By then, the soft drink side was strong, but the company wanted to grow beyond cola. At the same time, snack foods were gaining ground in American homes.
In 1965, Pepsi-Cola Company merged with Frito-Lay, Inc. Frito-Lay brought well-known snack brands like Lay’s, Fritos, and Doritos. The combined company took the name PepsiCo, Inc.
This merger joined salty snacks and soft drinks under one roof. It created a business that could sell both chips and soda to the same stores and customers. That mix of snacks and drinks has remained at the core of PepsiCo ever since.
Restaurants, Deals, and Global Reach
After the creation of PepsiCo, the company did not sit still. It began buying restaurant chains and expanding into new markets. Leaders wanted to capture more “meal moments” and not just snack or drink occasions.
In 1977, PepsiCo bought Pizza Hut. In 1978, it added Taco Bell. In 1986, it bought KFC. These moves brought fast-food brands into the same group as Pepsi and Frito-Lay. The company also acquired the international soft drink business of Seven-Up around this time.
This period turned PepsiCo into a wide food and drink group, with brands across restaurants, snacks, and beverages. It also pushed the company to expand outside the United States. Over time, PepsiCo built strong positions in many countries, especially in snacks and soft drinks.
Shaping the Modern Portfolio
In the 1990s and early 2000s, PepsiCo reshaped its portfolio again. It added new types of drinks and foods that were seen as fresher or more health-focused. At the same time, it refocused away from direct restaurant ownership.
PepsiCo launched Aquafina bottled water in the mid-1990s, giving it a strong brand in the growing water segment. Later, the company bought Tropicana from Seagram, adding major juice brands.
In 2001, the merger with Quaker Oats brought Quaker foods and Gatorade sports drinks into the group.
In 1997, PepsiCo spun off Pizza Hut, Taco Bell, and KFC into a separate company that later became known as Yum! Brands. This move let PepsiCo focus on packaged foods and drinks, while still keeping close ties with those restaurant chains through supply and marketing relationships.
Marketing, Youth, and New Products
Marketing remained central to the PepsiCo story. The company built a long tradition of using music, sports, and youth culture in its campaigns. This helped Pepsi, Mountain Dew, and other brands feel current to younger audiences.
Over time, the company launched many new flavors and product lines. Mountain Dew extensions, new Pepsi varieties, and later creations like Mountain Dew Kickstart showed how PepsiCo tested new tastes and formats. Cross-brand ideas, such as Doritos Locos Tacos with Taco Bell, blended snacks and restaurants in creative ways.
In more recent years, products like Bubly sparkling water and Gatorade Zero have aimed at customers looking for lighter or lower-sugar options. These launches reflect growing interest in health, hydration, and flavor without as many calories.
Leaders Who Shaped PepsiCo
Many people have guided PepsiCo’s direction. Some were founders, while others came in later and changed the company’s path. Their decisions often reflected bigger trends in business and society.
Caleb Bradham created the original drink and the Pepsi-Cola name. Charles G. Guth rescued the brand in the 1930s and pushed the value-sized bottle. Alfred N. Steele helped make Pepsi a strong rival to Coca-Cola through bold advertising.
Herman Lay, whose company merged into Frito-Lay, later became chairman and symbolized the union of snacks and soft drinks. Donald M. Kendall became the first president and CEO of PepsiCo and helped build its early global presence. More recently, leaders like Indra Nooyi and Ramon Laguarta have focused on long-term growth, global reach, and sustainability goals.
How PepsiCo Changed Over Time
PepsiCo’s main story is one of expansion and balance. It moved from a single cola to a mix of snacks, drinks, and foods. This helped reduce risk, since not all categories move in the same way at the same time.
The company also shifted its business structure. It moved into restaurants, then later spun them off. It bought water, juice, cereal, and sports drink brands to answer changing tastes and health concerns. At the same time, it kept investing in classic favorites like Pepsi, Mountain Dew, and Lay’s.
Another change has been the growing focus on health, environment, and social impact. Programs launched under “Performance with Purpose” and later “pep+” (PepsiCo Positive) show this shift. They aim to improve nutrition in parts of the portfolio, cut environmental impact, and support communities.
Scrutiny, Sustainability, and New Pressures
As PepsiCo grew, it also faced more public and regulatory attention. Concerns about sugar, obesity, and processed foods put pressure on all large food and drink companies. Plastic packaging and water use have raised environmental questions.
PepsiCo has been involved in public debates on these topics. Critics have raised issues around palm oil sourcing, plastic waste, and marketing. One notable example is legal action in New York State over plastic pollution tied to single-use packaging.
At the same time, investors and activists have pushed for changes in strategy and costs. In 2025, after engagement with an activist investment firm, PepsiCo announced steps to simplify its product range in the United States, close some plants, adjust prices on some items, and reinvest in “better-for-you” products and marketing.
PepsiCo Today
Today, PepsiCo is a large global food and beverage company based in Purchase, New York. Its brands are sold in more than 200 countries and territories. The company’s products are consumed more than one billion times a day.
The portfolio covers carbonated soft drinks like Pepsi and Mountain Dew, sports drinks like Gatorade, waters like Aquafina, juices like Tropicana, and many snack brands. Frito-Lay names such as Lay’s, Doritos, Cheetos, and Ruffles are key profit drivers. Quaker adds cereals and other foods.
In recent years, PepsiCo’s annual net revenue has reached around the low ninety-billion-dollar range. The company has also built a long record of raising its dividend year after year, which appeals to many investors looking for steady returns. Under current leadership, PepsiCo continues to push global growth while aiming to improve health and sustainability outcomes.
Interesting Facts About PepsiCo
Some parts of PepsiCo’s story stand out as fun, unusual, or simply surprising. These details help show how the brand has changed and how it competes. They also highlight clever moves at key moments.
All of these points come from well-documented events in the company’s history. They show how marketing, pricing, and structure can shape a brand’s place in the world. They also show that big companies can change paths more than once.
Here are a few notable facts drawn from the verified history.
- Pepsi-Cola once went bankrupt. The brand people know today rose from a failed original business that had been crushed by bad sugar bets in the 1920s.
- The 12-ounce bottle for five cents, launched in the 1930s, gave Pepsi more drink for the same price as some rivals. This value play was key during the Great Depression.
- PepsiCo was formed not by slow growth but by a landmark merger in 1965, when Pepsi-Cola joined with Frito-Lay to combine drinks and snacks.
- For a time, PepsiCo owned huge restaurant chains including Pizza Hut, Taco Bell, and KFC. These were later spun off into what became Yum! Brands.
- Gatorade joined PepsiCo through the Quaker Oats merger, making PepsiCo a major player in sports drinks as well as soda and snacks.
- PepsiCo’s brands reach across more than 200 countries and territories, and its products are consumed more than one billion times each day.
- The company has raised its dividend every year for more than half a century, placing it among long-running dividend growth companies.
Lessons from PepsiCo
PepsiCo’s history carries many lessons for business owners, managers, and students of corporate strategy. The company has dealt with failure, strong rivals, and changing public expectations. Its responses can guide others facing similar challenges.
These lessons come from both its successes and its problems. They involve product strategy, structure, branding, and public responsibility. No single move explains its long life. Instead, the story is about persistence and adaptation over time.
Below are some clear takeaways drawn from the company’s journey.
- Failure is not the end. The original Pepsi-Cola business went under, yet the brand returned under new owners. A strong idea, when paired with better management and timing, can recover.
- Value can win customers. The famous 12-ounce bottle at the same price as smaller servings showed how smart pricing and portion size can attract people in tough times.
- Diversification can reduce risk. By combining snacks, drinks, juices, water, and cereals, PepsiCo spread its bets across many categories instead of depending on a single product.
- Know when to narrow focus. The spin-off of restaurant chains into a separate company in the 1990s showed that it can be wise to step back from areas that distract from core strengths.
- Branding is a long-term game. Years of marketing tied to music, sports, and youth culture helped Pepsi and other brands stay current. This steady branding work built deep recognition.
- Respond to health and environmental concerns. Moves toward lower-sugar drinks, more nutritious snacks, and sustainability goals under programs like “pep+” show how large companies can adjust when the world’s expectations change.
- Engage with pressure, do not ignore it. Investor and public pressure over costs, packaging, and health pushed PepsiCo to reshape parts of its strategy. Facing these issues directly helped it set a clearer path forward.
PepsiCo Timeline
Sometimes the clearest way to see a company’s story is by looking at key dates. The timeline below highlights turning points and long-term shifts. It runs from the first drink in a pharmacy to the modern global group.
Each date marks a step in PepsiCo’s journey. Some are product launches or mergers. Others involve restructurings or public challenges. Together, they show how one brand turned into a broad food and drink company.
This overview focuses on well-supported events that have shaped PepsiCo’s place in the world today.
PepsiCo
1893
Caleb Bradham creates a cola-style fountain drink in his New Bern, North Carolina pharmacy.
1898
Bradham renames the drink Pepsi-Cola and begins bottling and marketing it under that name.
Early 1900s
Bradham forms the Pepsi-Cola Company and expands distribution across several U.S. states.
1920s
Sugar speculation and market changes lead to bankruptcy; the Pepsi-Cola brand passes through several owners.
1931
Charles G. Guth acquires Pepsi-Cola’s assets, commissions a revised formula, and promotes a 12-ounce bottle for five cents.
1940s
Pepsi’s national advertising grows, and the company gains a more stable corporate base through mergers linked to Loft.
1950s
Under CEO Alfred N. Steele, Pepsi intensifies its advertising and becomes Coca-Cola’s main rival.
1965
Pepsi-Cola Company merges with Frito-Lay, Inc. to form PepsiCo, Inc., joining snacks and soft drinks.
1977–1986
PepsiCo acquires Pizza Hut, Taco Bell, and KFC, and also buys Seven-Up’s international soft drink business.
1994
PepsiCo launches Aquafina bottled water, entering the growing bottled water category.
1997
PepsiCo spins off Pizza Hut, Taco Bell, and KFC into a separate restaurant company that later becomes Yum! Brands.
1998
PepsiCo acquires Tropicana and related juice brands from Seagram, strengthening its juice portfolio.
2001
The merger with Quaker Oats Company brings Quaker foods and Gatorade sports drinks into PepsiCo.
2008–2011
PepsiCo acquires major juice and dairy businesses in Russia, including Lebedyansky and Wimm-Bill-Dann, building its position in Eastern Europe.
2010s
New products such as Doritos Locos Tacos (with Taco Bell), Mountain Dew Kickstart, Bubly, and Gatorade Zero reflect ongoing innovation.
2023
A lawsuit in New York State over plastic waste highlights concerns about PepsiCo’s packaging and environmental impact.
2024
PepsiCo reports net revenue of nearly ninety-two billion dollars, with products consumed more than one billion times a day.
2025
PepsiCo unveils a new corporate brand identity and announces plans to reduce its U.S. product count, close some plants, adjust certain prices, and reinvest in “better-for-you” items and marketing, following engagement with an activist investment firm.
Sources: PepsiCo , Encyclopaedia Britannica , NCpedia , Frito-Lay , Associated Press , The Wall Street Journal , Forbes