Sometimes, the truth is stranger than fiction. And that’s what I am trying to explore in the ‘Stranger Things’ series. Here, you will come across true stories that are bizarre, interesting, and worth knowing. Happy reading!
Picture this
It’s 1959. You are a senior Pepsi executive at the American National Exhibition in Moscow. The exhibition is set up to showcase American culture to the Soviet Union.
You are standing near a Pepsi stall waiting for USA’s then-Vice President, Richard Nixon and Soviet leader, Nikita Khrushchev. They walk towards your stall engrossed in a debate between Capitalism and Communism.
They reach your stall and their debate heats up. To cool down the situation, you pour Pepsi into a paper cup and hand it over to Nikita Khrushchev. He drinks it. You make another drink and an agile photographer captures the moment. It’s a great photo op. The Soviets remember the fizzy drink long after the exhibition and want more of it. Six years later you become the company’s CEO!
In reality
That Pepsi executive was Donald M. Kendall. In 1972, he went on to negotiate a Pepsi monopoly in the Soviet Union. The demand for flavoured soda rose immensely. And that’s how the communist Soviet Union was introduced to their first capitalist product — Pepsi.
Back to barter
The Soviet market wanted to buy Pepsi; the Americans wanted to sell Pepsi. The problem was, how to trade? International trade in the Soviet Ruble was prohibited, it was also not worth a lot. Thus, the traders resorted to the good old barter system.
So, what did the Soviets have that the Americans loved? The answer is the same as what does modern-day Russia have that people across the world love? Vodka! Yes, the American company traded Pepsi for vodka.
This arrangement worked well till the expiry of the initial contract in the late 1980s. The Afghan-Soviet war also played a part. Going ahead, only vodka wasn’t going to be enough to keep the trade going.
A big deal
In 1989, Pepsi and USSR struck a deal. In exchange for soda, Pepsi received 20 ships, including 17 submarines and three warships. And of course, vodka. At that time, this deal made Pepsi the sixth-largest navy in the world. Well, at least on paper.
The Soviets weren’t obviously going to hand over their naval fleet to a capitalist country’s organisation. Yes, the deal was for 20 ships but they were old ships. Pepsi acted as a middleman, sold the old ships as scrap, and received American dollars.
In 1990, Pepsi and the Soviet Union signed a massive three-billion-dollar deal. It was the biggest deal between the capitalist and communist countries at that time. Pepsi even launched Pizza Hut in the country. However, in 1991, the deal fizzled out due to the fall of the Soviet Union!
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Disclaimer: There are several versions of this story doing the rounds. However, the events narrated above are based on the following sources and some creative liberty has been taken to weave the narrative.
Sources:
https://historyofyesterday.com/pepsi-once-traded-tons-of-soda-for-soviet-submarines-3696e0e9e946
https://www.bbc.com/news/business-48343589
https://www.atlasobscura.com/articles/soviet-union-pepsi-ships
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