In 1931, the Pepsi-Cola Company was purchased by Charles G. Guth (June 3, 1877 – May 24, 1948) in a complex financial transaction worked out in association with, and at the instigation of, Roy Megargel. Guth was born in the mid-1870s and apparently had spent most of his life prior to the Depression as a fairly successful entrepreneur in the soft drink and confectionary industries. He joined Loft, Inc., a chain of confectionary stores, in 1929;and the following year he became president.
Although Pepsi was primarily a fountain product when Guth bought it, soon thereafter he began bottling operations, both company-owned and franchised. He established a new Pepsi-Cola Company, had a chemist formulate a better drink, set up new bottling operations, and began merchandising a hugely successful 12-ounce bottle for five cents.
Guth had many challenges to overcome in order to save the struggling brand. Through the Great Depression, Pepsi carefully positioned itself as a low cost leader and made advertising history when it released the nation’s first jingle “nickel, nickel,” which was heard across the nation.
Under Guth’s leadership, Pepsi grew to be a national brand once again. The Pepsi-Cola Company started to expand into international markets like the Soviet Union, Latin America, and Canada. After the end of World War II, Pepsi-Cola Company’s international headquarters were moved to Manhattan and it continued to expand further into international markets.
In 1936, Pepsi posted net after-tax profits of nearly $2.1 million. In 1937, profits reached $3.2million, and the company had a network of 313 domestic franchised bottlers, five company-owned bottling plants, and the beginnings of a foreign business.
Guth was also president of Loft, Incorporated, a candy manufacturer and soda-fountain chain (founded 1919), and in legal battles in 1936–39 he lost a controlling interest in the Pepsi-Cola Company to the new management of Loft. When in 1941 the Pepsi-Cola Company was merged into Loft, the name Loft, Inc., was changed to Pepsi-Cola Company.
Pepsi-Cola businessman: Charles George Guth
