That Time a Russian General Invented Clear Coca-Cola, and Pepsi had One of the World’s Largest Navies
1945 was a good year to be Georgy Zhukov. In May of that year the Soviet General lead the 1st Byelorussian Front to victory in the climactic Battle of Berlin, bringing the Second World War in Europe to a close. In recognition of his service, Zhukov was promoted to Field Marshall, personally accepted the Nazi Government’s instruments of surrender, and was made commander of the Soviet Zone of Occupation in Germany. Yet despite being the most decorated and celebrated officer in the Soviet Union, Zhukov had reason to be nervous, for he had an embarrassing secret he dared not reveal to his superiors. Zhukov, you see, had a Coke problem. But not cocaine; Coca-Cola. The moment Zhukov first tried the drink with a group of American officers, he was hooked. But there was a small problem: in the Soviet Union Coca Cola was seen as symbol of the capitalist West and banned from importation. So in order to keep feeding his fizzy drink habit, Zhukov had to get creative.
Zhukov approached American General Mark Clark and asked whether it was possible to make Coca-Cola transparent so it looked more like vodka. Clark passed along the message to President Harry Truman, who in turn contacted James Farley, Chairman of the Coca-Cola Export Corporation, who confirmed that Zhukov’s request was indeed feasible. The classic reddish-brown tint of Coca-Cola comes from caramel colouring, and removing this from the recipe, said Farley, would have a negligible impact on the flavour. So it was that in 1946 a Coca Cola bottling plant in Austria delivered the first 50-case consignment of colorless Bestsvetnaya koka-kola or “White Coke” directly to Marshall Zhukov. The drink even came packaged in special straight-walled bottles with the Soviet red star printed on the cap to make it look even more like vodka. Under this guise, Zhukov was able to enjoy his beloved American sugar water under his superiors’ noses until his death in 1974.
But by that time Western soda had finally penetrated the Soviet market – though not in the form of Coca-Cola, but rather Pepsi. The story of how Pepsi came to the USSR begins at the 1959 US National Exhibition, a display of American arts, culture, and industry held in Moscow’s Sokolniki Park. On July 24, US vice-president Richard Nixon and Soviet Premier Nikita Khrushchev toured the exhibition together. Among the most memorable events of that day occurred when Nixon and Khrushchev stopped by a display of a modern American kitchen and began debating the relative merits of American versus Soviet industrial production. The so-called “Kitchen Debate” became a seminal cultural event in the Cold War and significantly boosted Nixon’s political career. The second memorable event occurred when Nixon and Khrushchev passed the Pepsi display and the Premier was handed a glass of the soda to try. Though Khrushchev initially noted that the drink smelled like shoe polish, he was apparently so taken by the flavour that he drank six full glasses. Photos of Khrushchev drinking Pepsi appeared in US newspapers the next day, and were soon featured in a number of Pepsi advertisements along with the slogan “Khrushchev wants to be sociable. Be sociable, have a Pepsi.”
But far from being a spontaneous event, Khrushchev’s encounter with Pepsi had been planned from the start. After Coca-Cola chose not to attend the Moscow Exhibition, the head of Pepsi’s International Division, Donald Kendall, spotted an opportunity to gain a foothold in Russia. His superiors were skeptical, however, so on July 23 Kendall approached Vice-President Nixon and asked him to bring Khrushchev by the Pepsi display when they toured the Exhibition the next day. Indeed, it was Kendall himself who put the first glass of Pepsi in the Soviet Premier’s hand. Amazingly, the stunt worked, and negotiations began almost immediately to set up Pepsi bottling plants in the Soviet Union. And for scoring this unprecedented coup, in 1965 Kendall was made CEO of Pepsi.
The negotiations took more than a decade, but finally in 1974 the first Soviet Pepsi bottling plant opened at Novorossiysk in 1974. One of the main difficulties in hammering out the deal was that the Russian Ruble was a closed currency and could not be exchanged for American dollars. Instead, Pepsi and the Soviet Union resorted to barter, with Pepsi providing bottling equipment and drink syrup in exchange for the exclusive US distribution rights to Stolichnaya vodka. As a result of this arrangement, Pepsi became the first Western product to be marketed and sold in the Soviet Union, and by 1978 Soviet bottling plants were producing 216 million bottles – and Russian citizens consuming over a billion servings – per year. In 1988 Pepsi also became the first western company to advertise on Soviet TV, running a series of ads featuring Michael Jackson. This arrangement, however, began to fall apart when in 1979 the Soviet Union invaded Afghanistan and the US Government imposed a boycott on Stolichnaya. In desperation, in 1989 the Soviets agreed to pay Pepsi in warships, providing a motley collection of 17 old submarines, frigates, cruisers, and battleships to be sold for scrap. This deal temporarily gave Pepsi the 6th largest navy in the world, and lead Donald Kendall to quip to Brent Scowcraft, President George H.W. Bush’s National Security Adviser:
“We’re disarming the Soviet Union faster than you are!”
Pepsi’s unexpected breakthrough into the Soviet Union took their longtime rival Coca Cola by surprise, and it wasn’t long before Coke began vying for a share of that market. In 1979 Coca-Cola CEO J. Paul Austin leveraged his friendship with then-US President Jimmy Carter to gain an audience with Soviet leaders and negotiate the importation of Coke into the Soviet Union. Negotiations hit a snag when the US Government officially boycotted the 1980 Moscow Olympic Games, an event Coca-Cola had sponsored for decades. However, Austin argued that as a multinational corporation Coca-Cola was above politics and continued to sponsor the games regardless, in the process introducing the Soviet people to his own brand of fizzy freedom water. But due to its head start Pepsi continued to be the most popular soda in Russia until the collapse of the Soviet Union in 1991.
The late 80s and early 90s also saw the return of Marshall Zhukov’s clear soda, though this incarnation would be far more short-lived than the original. Riding the contemporary “clear craze” that associated clear products with purity and health, in 1992 Pepsi introduced Crystal Pepsi, which like Bestsvetnaya koka-kola was simply regular Pepsi with the caramel colouring removed. The product proved popular, earning Pepsi around $474 Million in its first year of sales. But once again, Coca Cola was watching…and scheming. Sergio Zyman, Coca-Cola’s chief marketing officer, hatched a scheme to kill Crystal Pepsi before it could gain a permanent foothold.
How’d they do it?
Thanks to the successful launch of Diet Coke, Coca-Cola had a diet drink on their hands that had more or less faded into obscurity- Tab.
Significant to Coca-Cola’s plans here was the fact that diet drinks in general at this time were not terribly popular and were otherwise generally considered something only women drank. In fact, this association was so strong that Tab cans themselves were made pink and advertisements eventually solely targeted women, with such statements as “Be a shape he won’t forget… Tab can help you stay on his mind.”
This negative association with diet drinks among half the population and a brand that Coca-Cola didn’t really care about got the wheels turning among executives at Coca-Cola, with the result being a rather ingenious idea to hurt sales of the upstart, Crystal Pepsi.
Launched as a direct competitor to Crystal Pepsi in December of 1993, Tab Clear was later described by former Pepsi executive and, at the time, head of marketing for Coca-Cola Sergio Zyman as a product the company intentionally sent to die, almost purely to spite Pepsi.
In a nutshell, this was just the exact same drink as Tab, sans caramel coloring. The company also removed the caffeine from the product- another move that isn’t terribly popular with consumers.
They then very prominently featured the fact that the product was caffeine and sugar free right on the can. Naturally, both being clear colas, most stores stocked Crystal Pepsi and Tab Clear very close to one another.
This all combined had Coca-Cola’s executives hoping consumers would similarly assume that Crystal Pepsi was a diet drink and caffeine free. If accepted by the public, these two factors would virtually guarantee that Crystal Pepsi would never be a mainstream drink, no matter how hard Pepsi tried to make it a thing.
In the end, Zyman called the launch of Tab Clear, “a suicidal mission from day one” and in an interview for the book, Killing Giants: 10 Strategies To Topple The Goliath In Your Industry gleefully noted,
“Within three or five months, Tab Clear was dead. And so was Crystal Pepsi.”
While Crystal Pepsi was temporarily re-released a handful of times in the late 2010s, it seems that the only person to ever enjoy the refreshing taste of clear cola long-term was Marshall Georgy Zhukov.
- That Time Coca-Cola Spent $100 Million Intentionally Filling Coke Cans With Water That Smelled Like Farts
- That Time Coca-Cola Tried to Sell Bottled Tap Water in the U.K. and the Hilarity That Ensued
- That Time Coca-Cola Released a New Soda Just to Spite Pepsi
- That Time Coca-Cola Tried to Introduce Vending Machines that Charged More on Hot Days
- That Time Pepsi Accidentally Promised Hundreds of Thousands of People $40,000 Each
Sandage, Tom, A History of the World in Six Glasses, Bloomsbury USA, 2009
Zyman, Sergio, The End of Marketing as We Know It, HarperCollins, NY, 1999
Denny, Stephen, Killing Giants: 10 Strategies to Topple the Goliath in Your Industry, Folio/Penguin 2011
How Pepsi won the Cold War, defeating Coke in the Soviet Union, Big News Network, March 30, 2019 https://www.bignewsnetwork.com/news/260189920/how-pepsi-won-the-cold-war-defeating-coke-in-the-soviet-union
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