How Pepsi Won the USSR … And Then Almost Lost Everything

How Pepsi Won the USSR … And Then Almost Lost Everything

Pepsi: almost the best selling cola in the
world. For well over a century Coca Cola and Pepsi
have been vying for dominance, but in one particular case, Pepsi outpaced Coca Cola
in a dramatic fashion. As you’ll see today, Pepsi achieved what
no other American company could do: it conquered the heart of America’s greatest rival, the
Soviet Union. This video is brought to you by Skillshare. The first 500 people to sign up with the link
in the description will get a 2 month free trial. Our story begins in the late 1950s. Stalin was dead and from the ensuing power
struggle, Nikita Khrushchev emerged as the victor. His vision for the future of the Soviet Union
was quite different from his predecessor’s: unlike Stalin, Nikita wanted to reform the
country and to actually improve the lives of the population. He decided to end the Gulag system of labor
camps and to open up the country’s borders so that citizens could travel and see the
world. The ultimate expression of his liberal policies
was the ambitious decision to host an American National Exhibition right back home in Moscow. The US government was happy to oblige, and
in the summer of 1959 the Americans brought in an impressive array of items: from art
& tv sets to automobiles and fashion. The US was keen on showing the merits of capitalism
to the USSR and it spared no effort in doing so. It even went so far as to build a model house
to showcase just how well off the average American was living. Over the course of six weeks, three million
Soviet citizens would visit the exhibition. And yet, despite the publicity, the true purpose
of the exhibition was to open up the Soviet Union to international trade. You see, the American government had supplied
the exhibition with the products of 450 American companies, who were very eager to do business
with the USSR. And you guessed it, Pepsi was among the first
in line to support this radical endeavor. In fact, the day before the exhibition opened,
Donald Kendall, the head of Pepsi’s international division, approached then-Vice President Nixon
with a simple request. Nixon had to get a Pepsi into the hands of
Nikita Khrushchev. The very next day at the exhibition’s opening,
Nixon welcomed Khrushchev at the site of the model house’s kitchen and there the two
men engaged in a fierce but friendly debate on the merits of communism and capitalism. This exchange came to be known as the “Kitchen
Debate”, and immediately after it Nixon led Khrushchev to a refreshment booth filled
with nothing but Pepsi. Khrushchev liked it very much and encouraged
everyone to partake: most people enjoyed it, although some described Pepsi as “smelling
like shoe wax”. In any case, this colossal PR victory catapulted
Donald Kendall through the ranks at Pepsi and within four years he had become the company’s
CEO. His prime focus was making Pepsi available
to the average Soviet citizen, but trade with the Soviet Union was much harder than you’d
imagine. You see, the Soviet ruble was essentially
worthless outside the USSR. The Kremlin determined its value and forbade
anyone from taking the currency abroad. It took Kendall almost a decade to finally
negotiate a solution: for every bottle of Pepsi sold, the Pepsi company would receive
an equivalent amount of Stolichnaya vodka to be sold in America. Pepsi became the first capitalist product
sold in the USSR and the deal turned out surprisingly well: by the late 1980s the Soviets drank
a billion servings of Pepsi per year. But Americans could only drink so much vodka,
so eventually Kendall had to figure out a different medium of exchange. In the spring of 1989 he announced incredible
news: Pepsi would become the proud owner of 17 diesel submarines, a cruiser, a frigate
and a destroyer, courtesy of the Soviet Union. For a brief moment, Pepsi had become the 7th
largest navy in the world, until it turned around sold everything for scrap. When confronted about the exchange by the
US national security advisor, Kendall said: “I’m disarming the Soviet Union faster
than you are”. Just a year later Kendall arranged an even
more ambitious plan: he’d hire the USSR to build 10 oil tankers for him in exchange
for about a billion dollars worth of Pepsi. The media called it the “Deal of the Century”
… but then, the Soviet Union collapsed. Pepsi’s massive trade arrangement turned
into a frantic scramble to salvage its Russian assets. In the midst of hyperinflation, redrawn national
borders and a very corrupt process of privatization, Pepsi would stand to lose everything. Suddenly, they had to negotiate with over
a dozen different states, and not all of them were willing to cooperate. The shipyard building Pepsi’s tankers, for
example, was in Ukraine, while their plastic bottling plant was in Belarus. Over the next year Pepsi would devote all
its energy to reclaim its assets, and in the midst of this chaos, one company would make
a very opportunistic move. In the wake of Pepsi’s struggle, Coca Cola
entered the Russian market aggressively. They bought out factories for cents on the
dollar during the privatization and went so far in their marketing that they sent specialized
Coca Cola cans to the Russian space station. Unsurprisingly, Coke’s massive campaign
paid off: by 1996 it had overtaken Pepsi as Russia’s most popular cola. Nevertheless, today, Russia remains Pepsi’s
largest market outside the US and despite the setback in the early 90s the Pepsi Company
is as profitable as ever. In the end, while Coca Cola might be more
popular than Pepsi today, it is Pepsi that truly conquered the Soviet Union. Now, if you enjoyed the smooth visuals of
this video and have been thinking “Hmm, I’d actually want to learn how to do that”,
I have very good news for you. Skillshare have a great course on this effect,
which is called parallax, and if you wanna check it out, I’ll give a two-month free
trial of Skillshare to the first 500 people to use the link in the description. Skillshare is a great platform for learning
really any skill, easily and affordably. For as little as $10 a month you gain access
to thousands of professional classes that are easy to follow even if you’re a complete
beginner. So go check Skillshare out, I’m sure you
can learn a lot on there. In any case, thanks a lot for watching and
huge thanks to all my patrons on Patreon for making these videos possible. We’ll see each other in two weeks, and until
then, stay smart.

Only registered users can comment.

  1. Nikita wanted to reform the country to improve the lives of the population. NICE
    Exchange water with sugar for the same amount of Vodka. WHAT!
    Exchange water with sugar for 17 diesel submarines, a cruiser, a frigate and a destroyer. WHAAT!!
    Exchange water with sugar for 10 oil tankers. WHAAAT!!!
    But then, the Soviet Union collapsed. OH, REALLY?

  2. Complete lie. Comrade Stalin raised the country from its knees. But Khrushchev killed Stalin, he did nothing good. Connecting with America is the stupidest decision

  3. You can not fool the Americans for a long time. It will take time, but they will become smarter. And then a lie will not save you. Capitalists don't care about people

  4. This video is only for stupid people who can't think with their heads.Well, as a starving and backward country could launch missiles into space. And why did the evil Communists have continuously improved the lives of ordinary people.

  5. The Pepsi soda Logo IS the Korean Flag. "Pepsi" IS a phonetic sound of what Soda sounds like in Korean. The founder of Brads Soda changed the Logo to the Korean Glag to commemorate the founding of the Republic of Korea in 1947. So that Americans would always remember that America is founded on Koreas culture and Ideals. America is a Exact Replica of Korea. ALL White, "American" culture IS Koreas.

  6. Another story of Pepsi without saying the Pepsi Logo IS the Korean Flag. Thats why Korea is a Blank in the Jew Owned Anglo World.

  7. Well that is bad for them, drink soda a bad thing when they could drink water, and not American but Yankees America is not a country

  8. 원래는 남아메리카 안데스 산맥이 원산인 작물. 기원전 3,000
    여년 전부터 재배되어 왔고, 이후에 이 일대에서 퀴노아, 옥수
    수 등과 함께 주식으로 먹어왔고 시간이 지나면서 수백여가지
    의 품종이 개량되어왔다. 다만 이[[H 개량된 감자도 맛이 밍밍
    하기 짝이 없었기 때문에,[9] 주로 국에다 넣거나 반찬을 곁들여
    먹는 식으로 먹었던 게 일반적이다. 그리고 감자를 말려서 비
    상식량이나 전투식량으로도 애용하였다. 한국을 비롯한 동아
    시아권에서 쌀뱝에다가 반찬이나 국을 곁들여 먹는 게 일반적
    인 것과 마찬가지이다.

    크리스토퍼 콜럼버스의 아메리카 신항로 개척 이후 다른 유명
    한 작물인 담배와 함께 유럽에 들어왔고 세계로 퍼져나갔다.
    유럽 상륙의 계기는 항해식량이었다. 국내에는 18세기 초반에
    중국을 통해 들어왔다.

  9. "Dude why the fuck do you have Soviet warships?"

    "Don't worry about it man. I'm disarming the Soviets. I don't see you doing that"


  11. Another bitching title of a butthurt american. Pepsi didnt won the USSR, in soviet russia pepsi is communist. Lol

  12. Thanks for watching! Enjoyed? Don't forget to like & share!
    ✪ Get 2 months of Skillshare (for free!) 👉

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