Caleb Bradham and the Birth of Pepsi-Cola in New Bern

On August 28, 1898, Caleb Bradham decided his drink needed a better name. He was a pharmacist in New Bern, North Carolina, and the drink had been a popular item at the soda fountain in his drugstore at the corner of Middle and Pollock streets. Customers called it Brad's Drink.

Bradham replaced that name with Pepsi-Cola. The date is the one firmly recorded fact in a story that has also collected a good deal of legend. The rest of the story is a rise from a small-town fountain to a national franchise system, followed by a collapse that Bradham did not see coming.

A pharmacist by circumstance

Caleb Davis Bradham was born in 1866 in Chinquapin, in Duplin County, North Carolina. He studied at the University of North Carolina and then entered medical school at the University of Maryland. Family money problems forced him to leave before he finished, and he turned to pharmacy instead.

By the 1890s he owned a drugstore in New Bern, a port town on the Neuse River. In those years the pharmacy soda fountain was a social center as well as a business. Pharmacists mixed their own flavored syrups, and many sold them as mild remedies.

From Brad's Drink to Pepsi-Cola

Bradham's company says he began serving his own cola drink in the early 1890s, and 1893 is often given as the year. The surviving record is thin, so the exact date of the first batch is uncertain. The drink was a blend of carbonated water, sugar, vanilla, oils and extract from the kola nut.

The new name is generally traced to dyspepsia, the old word for indigestion, and to pepsin, a digestive enzyme. Bradham promoted the drink as a digestive aid, a claim that fit the medicinal reputation of fountain drinks at the time. Whether pepsin was ever a real ingredient is less clear, and historians treat the name as a piece of marketing as much as a recipe note.

A company and a bottling network

Demand soon outgrew the drugstore. Bradham formed the Pepsi-Cola Company in 1902, and the U.S. Patent Office registered the Pepsi-Cola trademark in 1903. He eventually gave up pharmacy to run the business full time.

The larger change came in 1905, when Bradham began selling bottled Pepsi-Cola and licensing independent bottlers. Under this system, which Coca-Cola had also adopted, local investors paid for equipment and sold the drink in their own territories. The company shipped syrup, and the franchisees did the rest. Pepsi-Cola is usually said to have had about 240 franchises in 24 states by 1910.

The company also turned to national advertising. It used the race driver Barney Oldfield in a 1909 campaign that called Pepsi-Cola a 'bully drink' for people who wanted to stay refreshed.

Sugar and the 1923 bankruptcy

Sugar was Pepsi's main raw material, and its price swung widely during and after the First World War. Wartime shortages and rationing pushed prices up. In 1920 they rose sharply again, and Bradham bought a large quantity of sugar on the assumption that they would continue to climb.

They fell instead, and the company was left holding sugar that had cost far more than it was now worth. It could not recover. Pepsi-Cola went bankrupt in 1923, and Bradham went back to running his drugstore in New Bern.

What came after

The trademark and remaining assets were sold, and Pepsi-Cola changed hands several times. A second company that took over the brand also failed, in 1931. It was then bought by Charles Guth, the head of the candy and fountain chain Loft, Inc. Under Guth the drink was repackaged in larger bottles at a low price, which helped it survive the Depression.

Bradham died in New Bern on February 19, 1934. He had lost his company, but not his reputation in the town where it began. The drugstore site on Middle Street still carries his name in local history, and the drink he renamed in 1898 is now sold around the world.