PepsiCo Global Corporation

In the 1930s, the Great Depression resulted in significant influences to the world economy, the highly increasing unemployment rate promoted the young to switch to trading. Among them, two founders of two companies that were later merged into Frito Lay were Elmer Doolin (left) and Herman Lay (right)

In 1932, Elmer Doolin invested in ice-cream business but encountered so many obstacles due to the price competition. Doolin started to look for a new business and in a lunch time occasion at a café, he bought a pack of fried corn for 5 cents. At this time, fried corn was a popular snack in American Southwest. Impressed by the 5-cent bag of fried corn, Doolin did a research and found out that the manufacturers intended to move to Mexico and sell the business for the price of 100 USD. Doolin borrowed his mom’s money and bought the fried corn recipe, 19 retail points and production equipment. Firstly, Doolin produced fried corn in his mom’s kitchen and then briskly expanded, and switched to produce his products in the garage then relocated his headquarters to Dallas where distribution was more dominant. The company developed rapidly and Doolin distributed his products all over the country through license sales contract.

H.W. company was founded by Herman Lay. When Herman Lay was 10 years old, he started to take jobs and ran various small businesses before becoming a salesman of Barrett Food Products, a company specialised in producing potato snacks. One year later, Lay borrowed 100 USD to buy a small warehouse of Barrett and became the distributor of that company. In 1933, Lay recruited the first salesperson and only one year later his company had 6 sales lines. Lay’s business grew very quickly but the most important milestone took place in 1938 when Barrett company encountered so many financial problems. After receiving the investment of 60.000 USD from business associates, Lay acquired Barrett and changed the company’s name into H.W & Company, Inc.

In 1945, Frito company signed the affiliated contract with H.W. company

In 1961, the two companies were merged into Frito-Lay corporation with the turnover of 132 million USD and four main brands: Frito, Lay’s, Ruffles and Cheetos with the nationwide distribution system.

In 1965, Frito-Lay merged with Pepsi-Cola beverage corporation, established PepsiCo – national food and beverage company.

These days…
Frito-Lay is one of the largest junk food producing companies in the world, available in 120 nations. Large brands are Lay’s, Ruffles, Doritos, Cheetos. The total annual sales is over 14 billion USD, 63% of PepsiCo’s net sales is from Frito Lay. Frito Lay sells over 2.5 million tons of snacks every year.

1901 – Quaker Oats was established by some Americans working at an oatmeal-producing factory

1983 – Quaker Oats Company acquired Stokely (Gatorade)

2001 – Pepsico completed the acquisition of Quaker Oats

In the summer haze of 1898 in North Carolina, a young pharmacist named Caleb Braham conducted an experiment to create a drink to serve his customers. This drink was a combination of sugar, vanilla, carbonated water, pepsin and cola seeds. This drink, which was named Brad’s drink, became popular so quickly and then it was called PepsiCola later on. Caleb Braham patented for the Pepsi-Cola brand and registered this brand in 1902.

The breakout of World War I affected the economic landscape of the United States, causing a sharp rising of production cost, including sugar price. When sugar price rose, Braham predicted that price would still rise further, so he bought a large amount of sugar for reserves. Unfortunately for him, the sudden drop in sugar price affected production cost. In 1923, the company declared bankruptcy and was acquired for $ 35,000.

The new owners restored the company. But till 1931, the company went bankrupt again due to the severe economic recession. At the same time, Charles Guth, president of Loft Industries – a system of confectionery and soda shops, purchased Pepsi Cola for $ 10,500 and sold its products in his stores. Especially, Charles Guth was Coke’s business partner at that time. However, due to the failure to reach an agreement in a sales contract, Guth decided to buy PepsiCola.

In 1934, under the leadership of Guth, PepsiCola achieved previous prosperity and increased dramatically in sales in the US ($ 1 million).

In 1941, it penetrated through Europe.

In 1947, it expanded to the Philippines and the Middle East.

In 1964, Diet Pepsi – the first diet freshwater drink on the market – was launched.

Founder of Tropicana brand was an Italian, Anthony T. Rossi. he immigrated to the United States in 1921 with his four friends with the intention of making enough money to go to Africa to produce films. However, Anthony recognized the opportunity to make money in America, which made his journey to Africa was immediately forgotten. He took up a lot of jobs before founding Manatee River, a packaging company, in 1947. As his business developed day by day, Anthony expanded his business by selling canned fruit (sliced fruit, packed in can and sold). However, only large and evenly slices were selected, small ones were discarded. To avoid such waste, Anthony squeezed all small slices for juice and sold it with fruit slice can.

Orange juice would get bitter when fermented for a long time. Anthony did not want to use preservatives like the others, so he became a pioneer who implemented the “pasteurization method”: heated up the temperature of orange juice for a very short time to kill bacteria, then lowered the temperature. This method helped him extend the orange juice expiry date up to 3 months while the flavor was totally kept. Anthony had a completely different product from competitors.

In 1957, he renamed his business to Tropicana Products, s specializing in trading fresh fruits and juices, especially oranges.

Business was developed day by day, so in addition to delivery by truck, Anthony bought a 8000-tonne ship to transport orange juice from Florida to New York.

In 1965, he received the first international order from Europe (France).

In 1969, the innitial public offering was issued in NYSE (to expand business and attract investment capital).

In 1970, the Tropicana ship (orange paint) came into operation.

In 1998, PepsiCo acquired Tropicana for $ 3.3 billion.

If you drink water after playing sports, you will experience cramp and vomiting. At that time, there were no many facilities to support sports practice and competition. Only when a player of the team Florida University had died on the field in 1960, that issue was researched to find out the cause. It was discovered that when we sweated, not only dehydration but also the lacking of mineral salts would happened and lowered the sugar level in our blood. That caused an imbalance in blood sugar of the body.

Dr. Dana created a drinking water recipe for the University of Florida team called Gatorade, a drink against body dehydration, as well as supplementing the loss of salt when sweating and balance blood sugar. This formula was later acquired by Stockely Company.

In 1970s, Gatorate developed into baseball, basketball, tennis … and signed a contract with basketball star Michael Jordan.

In 1983, Quaker Oats Company acquired Stokely.

In 2001, PepsiCo acquired Quaker Oats, including the Gatorate brand.