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How Pepsi Became a Naval Power

What if I told you that Pepsi once became the sixth-largest naval power in the world? No, this isn’t the plot of a Tom Clancy novel. It’s a real story of international trade, diplomacy, and, of course, soda.

It all began in 1959, a year marked by tension between the U.S. and the Soviet Union. Vice President Richard Nixon was on a diplomatic mission to Moscow, setting up an American National Exhibition. Among the exhibition booths was Pepsi, looking to introduce its bubbly beverage to a brand-new market.

Soviet leader Nikita Khrushchev took a sip of Pepsi and seemed pleased. This simple act led to a groundbreaking deal that would let Pepsi enter the Soviet market, becoming the first Western product to be sold there.

The biggest hurdle was currency. The Soviet ruble wasn’t easily converted to other forms of money, complicating trade with the U.S. The ingenious solution? Bartering. Pepsi would send concentrate to the USSR, who, in turn, would send back Stolichnaya vodka for Pepsi to distribute in the United States.

As Pepsi’s popularity skyrocketed in the Soviet Union, the amount of vodka needed to keep the deal afloat exceeded what could be provided. A new, audacious deal was struck in the late 1980s and early 1990s: the Soviets would give Pepsi 17 submarines, a cruiser, a frigate, and a destroyer.

Before you start imagining Pepsi-branded warships patrolling international waters, let’s clarify: Pepsi had no intention of becoming a naval power. These military vessels were sold for scrap, providing the soda giant with the funds it needed to continue its Soviet operations. But for a brief moment, this unconventional trade deal technically made Pepsi the world’s sixth-largest naval power.

The Pepsi-Soviet saga is a testament to the fascinating and often bizarre turns that international trade can take, especially when the stakes are as high as Cold War diplomacy. Who knew that a single sip of soda could have geopolitical implications?

So, the next time you take a sip of Pepsi, remember: you’re not just enjoying a soda. You’re taking part in a legacy that once included submarines and international diplomacy.

Would you like to read more stories like this? Stay tuned for more compelling tales where business meets history. Cheers!

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